Background check discrepancies surge in BFSI sector amid digital growth: Report
Oct 24, 2024
New Delhi [India], October 24 : As the Banking, Financial Services, and Insurance (BFSI) sector undergoes rapid digital transformation, driven by innovations like Unified Payments Interface (UPI) and Buy Now, Pay Later (BNPL) schemes, the demand for financial services and skilled professionals has reached unprecedented levels, according to AuthBridge report.
However, along with these growth opportunities, there is a rising challenge of verifying candidate credentials accurately.
Discrepancies in background checks within the BFSI sector reached 10.4 per cent for the financial year 2023-24, marking an 18.1 per cent increase compared to the previous year.
Employment verification discrepancies are the most common, making up 14.6 per cent of all inconsistencies. This presents a significant risk to financial institutions, as inaccurate employment histories can complicate workforce management and compromise operational efficiency.
Education verification discrepancies followed at 9.1 per cent, highlighting the need for rigorous checks on academic qualifications. Moreover, 6.4 per cent of address verifications also showed inaccuracies, emphasizing the importance of reliable verification processes to reduce the risk of identity fraud.
The report also shows a growing trend in discrepancies related to criminal record checks (CRC) and identity verification.
According to the National Crime Records Bureau (NCRB) as quoted in the report, India's crime rate has risen from 422.2 crimes per million in 2022 to 445.9 per million in 2024, contributing to the increase in CRC discrepancies.
Notably, 73.4 per cent of reported inconsistencies are linked to identity verification, highlighting the need for comprehensive background screening frameworks to combat fraudulent activities.
Ajay Trehan, CEO & Founder, AuthBridge, said, "The rapid expansion of the BFSI sector is a double-edged sword. While it brings growth opportunities, it also introduces vulnerabilities."
He added, "Financial institutions must prioritize the use of cutting-edge tech for end-to-end verification to not only safeguard against credential fraud but to build a foundation of trust and integrity that ensures long-term success."
To address these challenges, experts suggest that the BFSI sector adopt AI-driven verification solutions to ensure accurate checks across employment, education, address, and identity credentials. As the industry continues to grow, building trust through transparent hiring practices will be essential for long-term success.
