The Ultimate Safeguard: How Online Screening Protects Financial Institutions from Employee Risk

How Online Screening of Employees Benefits Financial Institutions

From thorough vetting of candidates to fostering a workplace culture rooted in transparency, there are several benefits tied to online screening. Concerning employees in the financial industry, online screening for employees is proving to be a powerful tool not only for hiring processes, but also for ensuring a positive work environment and supporting risk mitigation.

Without procedures in place to screen online activity for instances of misconduct, banks, insurance companies, CPA firms, wealth management agencies, and other financial institutions risk violating regulations set by the SEC and FINRA. Such regulations include the SEC’s Regulation Fair Disclosure (Reg FD), which enforces proper distribution of information, and FINRA Rule 2210, which provides content standards for public communications, including those conducted via social media. As a result, businesses and employees that fail to comply with these regulations can put themselves in a position that damages their reputation or leads to legal action. 

Businesses in the financial industry are under strict scrutiny from regulatory bodies, their customers, as well as their stakeholders. That, understandably, is a lot of pressure to work under when it comes to mitigating risks and maintaining trust. However, employee misconduct, particularly when it or signs of it surface online, can significantly undermine this trust and have severe implications, exposing firms to reputational damage, regulatory penalties, financial losses, and introducing workplace safety concerns.

Fortunately, compliant online screening technology can help businesses in the financial sector take proactive measures against workplace misconduct. In fact, online content and behavior is a strong indicator of a person’s potential to engage in workplace misconduct. Social media profiles, blogs, forums, and other online content often reflect a person’s attitudes, values, and patterns of behavior, including how they might act out of line in professional settings. This valuable behavior intelligence  is exactly why online screening is crucial for businesses of all kinds in keeping them out of harm’s way. 

In the wake of the murder of the UnitedHealth CEO, investment firms, banks, insurance agencies, cryptocurrency businesses, and other organizations in this sector are on high alert for signs of threats toward their leadership teams and employees. Not only is employee online screening a valuable tool to protect institutions from reputational or regulatory risks, but it also has the potential to keep employees out of critical danger. 

Why Online Employee Screening Matters for Financial Service Providers

The reality is online behaviors can extend beyond reputational harm and directly impact workplace safety. Employees who show signs of aggression, harassment, violence, or other harmful behaviors online may bring those same behaviors to work, putting the wellbeing of their colleagues in jeopardy. This creates an environment where productivity suffers, employee morale declines, and turnover increases. Businesses in the financial sector especially can’t afford these kinds of repercussions.  

Additionally, misconduct has a social multiplier effect. Research shows that misconduct is often contagious–one employee's inappropriate behavior can influence others, amplifying its impact on the workplace.

Within the financial sector, financial advisors are 37% more likely to engage in misconduct if their colleagues have a known history of wrongful activity. This leaves room for unchecked financial misconduct, harassment, and other costly misconduct behaviors to create a ripple effect, eroding morale and increasing turnover. By identifying and addressing misconduct indicators early, organizations can stop this cycle before it begins, fostering a workplace culture where ethical behavior is the norm.

“Financial advisors are 37% more likely to engage in misconduct if their colleagues have a known history of wrongful activity.”

In order to promote such a culture and prevent misconduct from occurring, organizations need to be proactive in their tactics. And, with social media and other online platforms taking center stage in our day to day activities, online employee screening is vital. 

Conducting thorough online screenings during the hiring process allows financial service providers to evaluate a candidate's behavior and ensure alignment with the firm's values, employee code of conduct, and compliance standards. Screening social media and other online activity can uncover misconduct risks, such as violent tendencies, threatening others, discriminatory language, drug use, or instances of online harassment, all of which conflict with the organization’s reputation and regulatory obligations.

Continuous background screenings of online behavior are equally important. Employees' behavior can change over time, and ongoing screening helps organizations identify emerging risks. For example, by rescreening employees, Fama has uncovered hitlists and helped employers avoid workplace shootings. Beyond that, proactive measures demonstrate a commitment to ethical standards, reassuring clients and stakeholders that the firm prioritizes safety and integrity at every level.

“Fama has uncovered hitlists and helped employers avoid workplace shootings.”

By integrating online employee screening into their hiring and retention strategies, financial service providers can foster a culture of safety, accountability, and trust. Overall, these measures aren’t just a safeguard–they’re a strategic advantage.

Types of Risks Posed by Social Media Behavior Among Financial Service Employees

Though social media and internet usage is a norm for many–in the United States, there are about 308 million active social media users–even a single incident of online misconduct can have far-reaching consequences, especially in an environment where trust is a critical asset. With this in mind, and when it comes to protecting banks and financial institutions, the power of online employee screening is invaluable. 

To better understand the role of online screening as a safeguard for businesses, here are a few of the risks posed by online misconduct among financial employees.  

Regulatory Risks

The financial services industry is bound by stringent compliance standards designed to uphold ethical conduct and safeguard against instances of discrimination, fraud, or bias. Employees engaging in online behavior that suggests online misconduct can trigger a violation of the laws and regulations set in place for banks and financial institutions. 

For instance, an employee who shares too much online about their job or their clients can violate the Gramm-Leach-Bliley Act (GLBA), which protects the privacy of customers’ personal information. It’s worth noting that a violation of the GLBA may result in $100,000 in fines for each violation.

Security Risks

Detecting potential insider threats is another critical benefit of online employee screening. Employees who post about confidential information may inadvertently create vulnerabilities for cyberattacks. Hackers and cybercriminals often target these weaknesses, exploiting personal or organizational information to gain access to critical systems. Such breaches can lead to financial fraud, data theft, or operational disruptions, with far-reaching consequences for both the firm and its clients.

And, in light of the recent killing of the UnitedHealth CEO, it’s clear how important it is to be mindful of online behaviors and the risks they may pose to those in leadership positions in particular. Employees, for example, who engage in hostile online interactions might see those interactions escalate into real-world confrontations. Similarly, executives or high-profile leaders within the organization could be targeted by individuals seeking to exploit their public presence, especially if security measures have been compromised by leaked information online.

Employee and Workplace Safety Risks

As mentioned, what individuals do online can reflect in their actions offline. Though their posts might be created behind the perceived shield of a keyboard, those actions can have drastic consequences. 

For instance, posts or comments that showcase aggressive, threatening, or violent behavior can point to a person who might engage in those same behaviors at work. From manifestos to targeted attacks on other colleagues, content shared online should never be taken lightly as it may harm the safety of employees. 

In addition to safety risks, online harassment or other forms of misconduct by employees can directly harm the wellbeing of colleagues, creating a toxic work environment. Inappropriate posts or messages that target others at work can lead to workplace conflicts and lower employee morale, as we saw in the Okonowsky v. Garland case in 2024. Ultimately, it’s up to employers to create harassment-free work environments, which now includes the social media landscape.

Reputation Risks

Reputation is one of the most valuable assets for financial service providers, but it’s also highly vulnerable to the actions of employees. Inappropriate online behavior or misconduct, such as discriminatory remarks, offensive posts, or participation in unlawful activities, can quickly become public knowledge and damage a firm’s brand trust. 

As a result, when these instances are shared publicly, firms may lose customers or have difficulty gaining new ones, hurting their profitability in the long run. In fact, many attribute the speed at which Silicon Valley Bank fell to a slew of social media posts that discussed–and potentially fueled– intentions to withdraw deposits. 

Additionally, 2023 data finds that, among financial service employees, the top misconduct found in online conduct were harassment (40%), intolerance (21%), and sexual misconduct (21%). As a male-dominated field, the financial sector may be particularly vulnerable to incidents of gross social misconduct like violence or sexual harassment, which can have serious implications for workplace culture, public perception, and the wellbeing of employees. 

Unchecked sexual misconduct on social media not only damages a company’s reputation but also undermines efforts to foster an inclusive and respectful workplace. Not only that, but sexual misconduct online, such as sexually charged or violent language or coercion, can quickly put others in physical or psychological risk making it a critical area for rescreening and intervention.

By identifying these risks early through online screenings, organizations can strengthen their security posture and protect sensitive information. Proactive online employee screening for misconduct behaviors that could breach financial compliance standards can help avoid such risks.

Benefits of Proactive Online Employee Screening

In order to remain successful and competitive, financial institutions need to prioritize the health of their companies, and we’re not just referring to profitability. Taking action to ensure a positive workplace culture not only safeguards reputation but builds an environment founded on trust and accountability, creating a stronger foundation for long-term success.

Enhanced Risk Management

As mentioned, the online behavior of employees in the financial sector has the potential to lead to both reputational and regulatory risks. However, online employee screening allows these businesses to identify online behaviors and take action before they escalate into unwanted scenarios. 

In compliance with SEC regulations, online screening allows public companies to ensure information that hasn’t been made publicly available remains confidential. In fact, last year a CEO of a publicly traded company was found in violation of Regulation Fair Disclosure after posting to social media about the company’s growth, which had not yet been made public. With online screening, financial institutions are equipped to avoid such violations. 

Improved Workplace Culture

Online and social media screening also supports the development of a more ethical and accountable workplace culture. Emphasizing transparency and integrity in both hiring and ongoing employment helps financial service providers send a clear message that misconduct will not be tolerated. This approach encourages employees to align with organizational values and promotes a culture of mutual respect and professionalism.

Proactive online employee screening not only protects financial firms from immediate risks but also builds a foundation for long-term success. It enhances risk management, ensures compliance, and cultivates a positive workplace culture, ultimately supporting the organization's growth and reputation in a competitive industry.

Key Features of Online Screening Tools for Financial Institutions

It’s clear that taking action to prevent online misconduct is essential, especially among the high-pressure nature of wealth management groups, banks, insurance companies, and other businesses within the financial industry. The good news is screening online content isn’t time consuming or even a violation of privacy. In fact, it’s just the opposite.

Not only is modern online screening technology compliant, it also gives businesses a detailed report about instances of misconduct or misconduct risks found online, providing financial institutions the opportunity to make data driven decisions to protect their businesses and safeguard their reputations. 

These tools analyze publicly available information from more than 10,000 sources including content from social media platforms, blogs, forums, and other online sources to uncover potential indicators of misconduct, such as sexual harassment, violence, and threats. By using data-driven insights, financial institutions can identify risks that might otherwise go unnoticed.

And, compliance is a critical consideration when using online screening tools. The best solutions are designed to adhere to data privacy laws and employment regulations, ensuring that screenings are conducted ethically and legally. With these tools, businesses are equipped to safeguard themselves against legal liabilities while maintaining transparency and fairness with their employees.

Every financial institution has unique priorities when it comes to online screening, which is exactly why online screening tools should have the option to customize views and utilize keywords for misconduct reports. This flexibility ensures that institutions can efficiently review relevant information, saving time and enhancing the decision-making process.

That level of transparency, flexibility, and detailed data-insights is exactly what makes Fama’s online screening technology essential for financial institutions. From custom report views to video screening, our screening software ensures detailed insights into online behaviors that indicate misconduct risks for both candidates and employees. Our goal is to help businesses build positive workplace cultures and work with the best people in their field, and that starts with  thorough online screening and leveraging behavior intelligence to mitigate risk.

To get started with online employee screening using Fama’s solutions, reach out to our team today!