Financial Services firms risk rescreening blind spot ahead of new FCA misconduct rules

Financial services firms could face increased regulatory scrutiny and workforce risk if they fail to review their employee rescreening program ahead of incoming non-financial misconduct rules. Effective from 1 September 2026, the Financial Conduct Authority (FCA) new rules on non-financial misconduct will require Financial Services firms to strengthen how they assess employee conduct and risk, both at the point of hire and throughout the employment lifecycle.



However, input from a recent webinar organised by First Advantage, a global background screening services provider, suggests that many organisations may still face significant barriers to implementing effective rescreening programmes. Employee experience and privacy concerns were identified as the leading challenge, cited by 38% of recent survey respondents, followed closely by operational complexity and resource constraints at 35%. Cost and budget pressures were identified by a further 27%.



These barriers could leave businesses exposed at a time of heightened regulatory scrutiny. The FCA’s updated rules broaden the scope of non-financial misconduct, including behaviours such as bullying, harassment, and violence, and reinforce the need for organisations to review workplace policies, strengthen reporting processes, and fit and proper assessments.



The input from the webinar highlights that while background screening has traditionally been focused on pre-employment checks, evolving regulations are accelerating a shift towards continuous workforce risk management. As organisations may manage increasingly distributed and global workforces, the need to monitor employee behaviour beyond the point of hire may increase. This includes mitigating risks around insider threats, inappropriate online activity, and undisclosed second employment, all of which could present operational, reputational and compliance risks.



Against this backdrop, organisations should consider rescreening their workforces. A proportionate, compliant rescreening programme should clearly define which checks are necessary, how often they are undertaken, and how this program and expectations are communicated to employees, helping to strengthen workforce risk management while maintaining trust and transparency.



Charlie Cove, Customer Success Director at First Advantage, shared:



“While Financial Services firms are not suddenly being asked to evaluate entirely new types of risk, the regulatory lens they are scrutinised under is changing. Non-financial misconduct, employee behaviour, online conduct, and potential conflicts of interest can all affect workforce integrity, regulatory compliance, and trust.



“The challenge for businesses is that rescreening can feel sensitive when introduced without context. Employees need to understand why checks are being carried out, what they involve, and how the information will be used. Businesses that approach rescreening as a transparent, trust-building exercise and an ongoing part of governance will be better placed to protect their people, customers, and reputation.



“With the FCA’s new rules coming into force in September, now is the time for Financial Services businesses to move beyond a tick-box approach to screening and build rescreening programmes that are clear, fair, defensible, and aligned to the risk profile of the role.”



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