Background Verification Basics

Industry- Based Background Verification Needs and Essentials

Would you like to build the perfect team of employees in your organization? Businesses often strive to create optimistic, productive and driven teams of employees, which impacts profitability. Positive workforces in organizations are not only productive but are also loyal. A simple way to build a loyal workforce is by nurturing a culture of trust and maintaining it with risk management programs within the company. 

But why is there a need to discuss trust and employees?

Businesses – whether large conglomerates, corporate companies or SMEs – are exposed to a variety of risks. Apart from market-related, strategy and external risks, the employees of a company, too, could pose a sizeable threat. Let’s face it, employees as a collective are seldom a threat to companies, but even one employee can hurt a company.

An article in the Harvard Business Review categorizes risks arising from employees as ‘preventable risks’: These are internal risks, arising from within the organization, that are controllable and ought to be eliminated or avoided. Examples are the risks from employees’ and managers’ unauthorized, illegal, unethical, incorrect, or inappropriate actions and the risks from breakdowns in routine operational processes. 

Industry-specific risks

However, each business and industry would be prone to different kinds of risks that are related to employees. For example, a candidate applying for a driver’s role in a corporate company may not require education verification, but definitely requires a license, criminal, sexual offence, or medical screenings. Some risks can be completely avoided at the recruitment stage by following strict and unbiased processes: a thorough examination of CV and candidate portfolio could be followed by a series of background verification checks related to the nature of the industry.

Here, we focus on a few key industries and sectors and its employee background verification needs.

IT sector

As suggested in an EY report, the growth in the Indian IT sector has increased the number of cases of fraud, raising questions about the readiness of companies in the prevention, detection, and handling of frauds. The nature of frauds in the IT sector encompasses a wide range: from the most predictable, theft of data, to stealing passwords, hacking client accounts, selling data to competitor companies and unlawful data breach, among other possible scams.

When it comes to prevention, employee background verification specific to IT sectors would be the first step. The following verifications are a must for the IT sector:

  • Education verification
  • Civil records
  • Criminal records
  • Drug test
  • Employment verification
  • Professional license verification
  • Documents verification
  • Character and conduct check
  • Global database check

Banking and Insurance

Name any Indian bank and think about banking frauds. Chances are that there is at least one case of banking fraud related to that bank. In the last few decades, India has seen numerous examples of banking frauds that have involved employees of the banks. An IIM research  backs this by revealing that the public banking sector (PBS) in India has seen serious cases of frauds that have resulted in losses of crores. Investigations often reveal not only the involvement of mid-level but senior management employees as well. The nature of banking-related frauds connected to employees could be diverse:

  • Accounting fraud
  • Forgery of checks
  • Fraudulent loans
  • Identity theft
  • Phishing and Internet fraud
  • Wire transfer frauds

Financial services

According to a Global Economic Crime Survey (2014) by PwC, cybercrime was one of the top economic crimes reported by financial services organizations across the world, including India. Among the frauds in the financial services sector, a number of frauds involve cooperation from employees of financial institutions.  Another research urges companies to ask pertinent questions to fight fraud within their organizations:

  • Is the personal integrity and ethical behavior of employees emphasized enough in the organization?
  • Does the organization encourage employees to question the suspicious behaviour of other employees?
  • Do companies have policies and procedures to be deployed in different operations including recruitment?

The study also suggests that a large number of junior level employees of financial services companies are able to carry out fraud, quite easily. The reason could be that financial products are more complex in design and function and hence, more difficult to police. In such a scenario, avoiding employees that could lead to fraud is critical. A safe bet: verification at the time of the recruitment process.

Employee background verification – a critical need

With the Indian employment market comprising formal and informal employment, highly regulated, moderately regulated to unregulated nature of employment, the situation calls for an urgent requirement for thorough formal background verifications by companies.

Conducting background screenings internally is complicated. Every organization might not have the skills and talent required for such activities as it involves manual research, data scrutiny, institutional partnerships with government and private agencies and access to a whole lot of data. That is where we come into the picture. FactSuite is a background verification agency in Bangalore, India that offers its competent services in employee background screenings and due diligence. To know more about the services, visit

Here’s a quick checklist for Industry based background verification.

Industry wise Background Checks