The American Bankers Association said Wednesday that, as of June 1, it had begun letting banks submit fingerprint images of new employees electronically instead of on paper cards, so that background checks could be conducted more quickly.
Banks are required to conduct background checks on new hires, and in 1982 the Federal Bureau of Investigation designated the ABA as the "channeling agent" through which banks must submit employee fingerprints. About 10% of the fingerprints submitted reveal a criminal record.
The trade group says that the electronic submission service lets banks get results in four to six days, versus up to two months under the paper-based system, and helps banks weed out people with criminal records more quickly. By doing so earlier in the employee's tenure, the bank can reduce the risk that the person will commit internal fraud, and can also minimize the costs invested in training the employee, the ABA said.
Three banks - People's Bank of Bridgeport, Conn., Barclays Global Bank in San Francisco, and UMB Bank in Kansas City, Mo. - are currently using the service, and 6 to 10 others are testing it, the ABA said.
"I absolutely love it," said Terra Null, a vice president and fraud investigator at the UMB Financial Corp. subsidiary. Fingerprint cards could take up to eight weeks to get a response, and UMB may waste training dollars while waiting for the results, she said.
The bank, which started using the electronic system as soon as it went live, soon discovered that two applicants had arrests on their records that they did not disclose in their applications, Ms. Null said. The entire capital expense for installing the system was $14,000, she said.
Diane Poole, the ABA's group director of member and technical services, said the main issue for banks "is to get the results back quickly, and electronic submission allows them to reduce the turnaround time it takes for the FBI to get the results back to them."
The system will also "help reduce the rejection rate for those financial institutions that have problems getting good, prints and that's because software has quality control embedded in it," she said.
Under the fingerprint card system, the ABA receives, reconciles, screens, batches, and sends cards to the FBI to be screened through its national database. Under the electronic system, the time spent sending and receiving fingerprints is minimized, the group says.
Ms. Poole said that the electronic system is best suited for large banks with high turnover rates and lots of job applicants. Those banks are also in the best position to afford the system, which requires an up-front investment of up to $100,000.
Federal regulations require financial institutions to take steps to avoid hiring or working with anyone who has been convicted of "breaches of trust or dishonest acts." Failure to do so can result in fines of up to $1 million per day.
Consequently, bank employees should to be fingerprinted when they are hired, and personnel in high-risk areas - such as those with access to cash, wire transfers, or sensitive information - should be fingerprinted every three to five years, according to the ABA.
