A mandatory background check scheme will expand to cover more than half of local banking practitioners in September to root out “rolling bad apples,” the Hong Kong Monetary Authority said.
Phase 2 of the Mandatory Reference Checking Scheme will cover a total of approximately 50,000 staff members, including those who are licensed or registered to carry out securities, insurance, or Mandatory Provident Fund regulated activities, deputy chief executive Arthur Yuen Kwok-hang wrote in an article published on the regulator’s website.
Under the scheme, all banks can obtain and share relevant conduct-related reference information of prospective employees in the past seven years through a common protocol, so that the recruiting institutions can make more informed employment decisions.
“'One bad apple spoils the barrel'” as the saying goes, Yuen said, stressing that if those who have engaged in misconduct are able to “roll” from one bank to another without disclosing their disciplinary records to their new employers and repeat their infractions, not only will they inflict harm on the individual bank, but it also leads to the risk of misconduct permeating throughout the industry.
Yuen noted that lenders are currently carrying out preparation work for the implementation of phase 2, including communicating with their staff, updating their internal recruitment processes, and providing staff training.
The first phase was launched in May 2023, covering approximately 3,500 of banks' senior staff, Yuen said, adding that around 700 reference checks have been conducted under the scheme, of which only nine – about 1 percent of the total – involved negative information.
He pointed out that the figure is small but very meaningful, demonstrating that potential “bad apples” can be identified under the scheme, thereby preventing bank staff from concealing their misconduct records when changing jobs.
The scheme will enable banks to conduct reference checking more effectively, which will in turn help them make hiring decisions with greater confidence as well as enhance the confidence of both customers and the society as a whole in the banking industry, he said.
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