BFSI sector sees 10.4% increase in background check discrepancies for FY 23-24

As the BFSI sector navigates rapid digital transformation, fueled by innovations like UPI and BNPL schemes, the demand for financial services and talent is at an all-time high. According to AuthBridge, the digital-first background verification and authentication solutions provider, the BFSI sector recorded 10.4% discrepancies in background checks for FY 2023-24, marking an 18.1% increase from the previous financial year. This uptick reflects the growing challenge of verifying candidate credentials in a highly competitive market, where individuals may resort to falsifying academic, professional, or personal information to secure positions.

The report highlights that employment verification discrepancies are the most prevalent, accounting for 14.6% of inconsistencies. This presents a significant risk to organizations, as inaccurate employment histories can hinder effective workforce management. Education verification discrepancies followed at 9.1%, pointing to the importance of validating academic qualifications. Additionally, 6.4% of address verifications showed inaccuracies, further emphasizing the need for reliable verification protocols to mitigate risks associated with identity misrepresentation.

Beyond employment and education checks, discrepancies in criminal record checks (CRC) and identity verification are also steadily rising. This increase in CRC discrepancies can be attributed to the overall crime rate in India, which has climbed from 422.2 crimes per million in 2022 to 445.9 per million in 2024, according to the latest report from the National Crime Records Bureau (NCRB). Additionally, AuthBridge's Annual Trends Report 2024 (ATR'24) highlights that 73.4% of the overall reported discrepancies are in identity verification checks. These concerning trends underscore the critical need for comprehensive background screening frameworks, which are essential to protect fraudulent activities and compliance risks in any organization, especially for a sophisticated industry like financial institutions.

Commenting on the findings, 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. As a trusted expert in the BFSI space, AuthBridge has observed that employment-related discrepancies are emerging as a significant concern. 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 stay ahead of evolving risks, financial institutions need to implement AI-driven verification solutions that ensure accurate background checks across employment, education, address, and identity credentials. As the BFSI sector continues to expand, building trust through transparent hiring and onboarding processes will become a critical differentiator.