Despite increasing regulatory scrutiny and a volatile global climate, optimism in the financial services industry remains high, according to the latest EMEA Financial Services Employment Screening Benchmark Report from HireRight, a leading global provider of employment background screening services.

In fact, 63% of EMEA financial services business expect to grow their workforce and a quarter (24%) aim for growth of 6% or above.

This year’s survey of financial services HR and risk professionals in Europe, the Middle East & Africa (EMEA) reports that regulatory changes are the biggest concern for EMEA financial services businesses (58%), with risk management (37%) and information security (34%) also making it into the top 5 business challenges for 2018.

For each of these issues, financial services professionals are significantly more concerned than those in other sectors, underscoring that the industry continues to be highly risk-focused in its approach and has been significantly impacted by the changing legal and regulatory landscape.

When it comes to Brexit, confidence in the UK business landscape appears to be returning, with only 5% of financial services HR professionals reporting they might halt UK recruitment due to Brexit. However, a third (34%) of financial services business believe the UK is now a less attractive place to do business with, a similar number (33%) thinking that regulatory uncertainty will make it harder to recruit and screen UK nationals.

SMR and Screening Challenges

Surprisingly, only 15% of HR and risk professionals are completely confident that people joining their organisation understand the implications of the Senior Managers Regime (SMR), despite the rules being introduced by the Financial Conduct Authority in March 2016. An overwhelming majority (78%) are unsure if their organisation has successfully built the SMR into its culture.

Screening is clearly a necessity beyond just meeting the SMR regulation, with 85% of financial services HR and risk professionals reporting that they have experienced candidates misrepresenting information on their CVs or job applications. Indeed, three quarters (75%) of business uncovered issues whilst screening that would have not otherwise been found, with 31% finding issues during senior-level screening.

Steve Girdler, Managing Director EMEA at HireRight, commented:

“2018 is a pivotal year for the financial services industry, with the sector facing a year of unprecedented change and challenges including tightening data regulation, international political uncertainty, technological disruption and increasing scrutiny. Despite these changes, the sector continues to thrive and as a result many are set for impressive growth in 2018 and hiring rates are expected to rise.”

“Whilst screening is a regulatory necessity in many cases, financial services businesses are increasingly seeing its intrinsic value with discrepancies continuing to be identified at all candidate levels of seniority – from entry to board room level. Screening is not a nice-to-have addition, but an essential last port of call in the recruitment process enabling employers to hire with confidence and mitigate business risk.”