Employee Screening Explained: What Financial Firms Need to Know
If you work in HR at a Malaysian bank, insurer or financial institution, you have likely heard of BNM employee screening. This guide explains Bank Negara Malaysia's Employee Screening policy in plain language and how background checks can support it.
Note: This article is a general summary, not legal or compliance advice. Always refer to the official policy document published by Bank Negara Malaysia.
What is the Financial Institution Employee Screening policy?
Bank Negara Malaysia issued its Employee Screening policy document on 9 March 2018, and it took effect on 1 July 2018. Its aim is to promote an ethical workforce in the financial sector by giving institutions better visibility into candidates' past conduct before hiring.
Who does it apply to?
The policy applies to:
Financial holding companies
Licensed institutions
Prescribed development financial institutions
Key requirements
Employment references
Institutions must request employment references from a prospective employee's current and past employers. Institutions that receive these requests must respond with the specified information.
Statutory declaration
Prospective employees must submit a statutory declaration covering past criminal convictions and any ongoing criminal investigations or proceedings.
Financial market roles
Before hiring someone as a financial market dealer, or hiring a former dealer or broker into any position, institutions must make an inquiry with the Financial Markets Association of Malaysia.
BNM employee screening FAQ
Does the policy apply to fintechs and SMEs? It applies to the institution types listed above. Fintechs, insurance agencies and other financial service businesses should check whether they fall within scope. Even if they do not, many choose to follow similar practices because their partners and clients expect it.
Is a statutory declaration enough? A declaration is the candidate's own statement. Many institutions also run independent background checks to verify identity, qualifications and public records.
What about existing staff? Good practice in the financial sector often includes ongoing screening for staff in sensitive roles. Read about continuous monitoring.
How independent background checks support compliance
Alongside references and declarations, independent checks can help institutions confirm:
Identity and education history
Criminal prosecution and civil litigation records
Regulatory watchlist matches
Adverse news and fraud/scam records
These give hiring teams an independent view to compare against what the candidate has declared.
Screening for financial services
CheckDulu helps financial service businesses run consent-based checks across 10+ public sources, with results within 24 hours. Note that CheckDulu does not provide credit reports. See background check vs credit check for the difference.