Employee screening: a comprehensive how-to guide

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Digging a little deeper into who you have hired should be a given. Knowing how to do it thoroughly is a whole other matter. That’s especially true since the Financial Intelligence Centre’s (FIC) recent Directive 8 has made this a mandate for accountable institutions, legislating employee screening (both current and prospective) for competence and integrity, scrutinised against targeted financial sanctions lists. 

The directive serves to formalise compliance for employment purposes.  This may bring up qualms about the practical implications compliance officers must follow. But understanding when, what, and how to screen is the first step, and automated tools can help streamline manual processes with ease, too.

When to screen employees

Frankly, it’s a necessity to screen every employee for AML and CTF. But, as recommended by FIC, risk-based approaches should be considered, whereby senior company figures may need to be scrutinised more than administrative personnel. The greater the implicated risk, the more frequent and intense the screening.

In keeping with transparency initiatives, the FIC requires thoroughly recording screening measures, an element now critical to a company’s overarching risk management and compliance programme (RMCP). As these records may be requested at any time, it is best to comply with immediate effect, as avoidance could result in a fine or, worse, a ban.

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Employee Screening – what to screen

The FIC is clear that every accountable institution, including banks, payment providers, fintechs, currency traders, wealth managers, lawyers, estate agents, and car dealers, to name but a few, are obligated to screen employees as follows:

      • Competence: Screening can ascertain if an employee has the correct skills for a particular role (qualifications, accreditations, etc.), but enhanced due diligence into employment history and character references is a critical stage to check for competency. 

        • Integrity:  Understanding an employee’s ethical grounds and honesty is essential alongside criminal checks. For those in higher-risk roles, such as compliance officers, further scrutiny of past positions may be necessary, as well as mapping connections to politically exposed persons (PEP) and possible terrorist and proliferation financing.

          • Targeted Financial Sanctions: Screening employees against sanctions lists as provided by the FIC can safeguard against engaging in relations with individuals under financial prohibition due to illicit activity.

        Notably, these compliance measures necessitate striking a delicate balance between employee screening and labour law. For example, anti-discrimination legislation and the Protection of Personal Information (POPI) Act must be considered, where sensitive and adverse information concerning an employee must be handled carefully.  

        How to screen employees

        The weight of compliance legislation is only getting heavier, but it can be handled. Leveraging next-generation advanced artificial intelligence (AI) algorithms is the way forward to lighten the load of AML regulation. This is where RelyComply steps in. Here’s how to screen employees:

            • Using the best in machine learning, our end-to-end solution will automatically verify your employees for a comprehensive and intelligent authentication process as part of a thorough competence check.

            • Integrating AI-driven technology will dramatically alter your compliance screening framework, where real-time matching will be instantaneous and ongoing, allowing up-to-date PEP, watchlist and targeted financial sanctions screening.

          We can assist in harnessing the power of AI to meet your employee screening needs. It’s just one way we’re improving compliance through cutting-edge technology

          Get in touch with us or request a demo to take the next steps.

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