Late in 2017 Bank Negara Malaysia (BNM) issued the Employee Screening Exposure Draft to enhance accountability and transparency in the financial industry.
The draft, which comes into effect as policy from 1st January 2018, aims to promote an ethical workforce for the financial industry by strengthening employee screening practices and disclosures.
“The highest standard of integrity and professionalism by employees of financial institutions is critical to sustain public confidence in the financial sector. The behaviour of each individual employed by financial institutions may be perceived to be a reflection of the broader state of conduct and culture within the financial sector. Financial institutions are collectively responsible to uphold the integrity of the industry and it is in each institution’s interest to conduct a thorough due diligence on the individuals it seeks to employ. The recruitment process presents a critical opportunity for financial institutions to screen appropriate candidates and mitigate the risk of ‘rolling bad apples’ within the industry. In doing so, financial institutions play an important role in perpetuating a culture of ethical conduct.
“To this end, the policy seeks to improve the transparency of employees’ past conduct for informed hiring decisions, by strengthening the screening practices of financial institutions and the conditions for meaningful disclosures within employment references.
“BNM’s aim, with the issuance of this policy document, is to promote an ethical workforce for the financial industry.”
As a financial institution’s integrity are only as sound as those within the organisation, there has been great emphasis within BNM policies for companies to identify, hire and manage competent employees before and during the employment stage.
These existing and incoming policies for banking institutions, Islamic banking institutions, insurers, Takaful operators and holding companies, can be categorised as follows:
- The Fit & Proper Criteria
- The Anti-Money Laundering and Counter-Terrorism Financing Framework; and
- Employee Screening Exposure Draft (comes into effect 2018)
For the month of January, we will be exploring these three areas that financial institutions need to comply with BNM’s policies. Stay tuned to our articles here or visit verityintel.com for other insights.