BFSI Sector Faces Challenges with Credential Verification Amidst Digital Growth
The Banking, Financial Services, and Insurance (BFSI) sector is rapidly transforming with digital innovations like Unified Payments Interface (UPI) and Buy Now, Pay Later (BNPL) schemes. This growth has increased the demand for financial services and skilled professionals, as highlighted in a report by AuthBridge.
However, this growth also brings challenges, particularly in verifying candidate credentials accurately. The report notes that discrepancies in background checks within the BFSI sector reached 10.4% for the financial year 2023-24, an 18.1% increase from the previous year. Employment verification discrepancies are the most common, accounting for 14.6% of all inconsistencies, posing risks to financial institutions by complicating workforce management and operational efficiency.
Education verification discrepancies are at 9.1%, emphasizing the need for thorough checks on academic qualifications. Additionally, 6.4% of address verifications showed inaccuracies, highlighting the importance of reliable verification processes to mitigate identity fraud risks.
The report also indicates a rise in discrepancies related to criminal record checks (CRC) and identity verification. According to the National Crime Records Bureau (NCRB), India’s crime rate increased from 422.2 crimes per million in 2022 to 445.9 per million in 2024, contributing to the rise in CRC discrepancies. Notably, 73.4% of reported inconsistencies are linked to identity verification, underscoring the need for comprehensive background screening frameworks to combat fraud.
Ajay Trehan, CEO & Founder of AuthBridge, stated, “The rapid expansion of the BFSI sector is a double-edged sword. While it brings growth opportunities, it also introduces vulnerabilities.” He emphasized the importance of using advanced technology for end-to-end verification to safeguard against credential fraud and build trust and integrity for long-term success.
Experts suggest that the BFSI sector adopt AI-driven verification solutions to ensure accurate checks across employment, education, address, and identity credentials. As the industry continues to grow, building trust through transparent hiring practices will be essential for long-term success.
Doubts Revealed
BFSI Sector -: BFSI stands for Banking, Financial Services, and Insurance. It is a sector that includes companies providing financial products and services like banks, insurance companies, and investment firms.
Credential Verification -: Credential verification is the process of checking if someone’s qualifications, like their education and work experience, are true and accurate. It is important to ensure that people have the skills and knowledge they claim to have.
Digital Growth -: Digital growth refers to the increase in the use of digital technology, like the internet and mobile apps, to provide services. In the BFSI sector, this means more people are using online banking and financial services.
Discrepancies -: Discrepancies are differences or inconsistencies found when checking information. In this context, it means finding errors or false information in someone’s background details.
Background Screening -: Background screening is the process of checking someone’s history, like their past jobs and education, to make sure they are who they say they are. It helps prevent fraud and ensures trustworthiness.
AI-driven Solutions -: AI-driven solutions use artificial intelligence, which is smart computer technology, to help solve problems. In this case, AI can help make the process of checking credentials faster and more accurate.
