Hiring in the financial sector in Japan comes with a different set of expectations. There’s regulation to consider, yes — but also internal accountability, risk management, and reputation. Roles that deal with client money, compliance, or sensitive systems can’t afford guesswork.
Background checks help fill in the gaps between a résumé and reality. They’re not about digging into people’s lives. They’re about verifying what’s relevant, so teams can make informed, low-risk decisions — especially when those decisions affect clients, auditors, or regulators.
Why Background Checks Are Becoming Standard
In Japan, background checks aren’t legally required for financial roles — but they’re being used more frequently. It’s not because companies are trying to be extra cautious; it’s because the cost of missing something has gone up.
Compliance teams are under pressure to show that they’re managing risk before problems happen. HR teams are expected to screen candidates more thoroughly. Auditors are asking more questions. Everyone is aware that one hire in the wrong role can create problems that take months to fix.
This doesn’t mean every role needs full screening. But if someone will handle regulatory filings, manage client accounts, or access internal systems, most firms want to be confident they know who they’re bringing in.
What Financial Firms Usually Check
Here’s what most companies in Japan’s financial sector include in a background check — and why.
Employment Verification
Was the candidate actually in the role they claimed? Did they leave on good terms? Were there unexplained gaps? This check helps confirm their timeline and experience, especially if they’ve worked at other regulated firms.
Education & Certifications
Finance roles often require degrees in economics, accounting, or law. If someone is presenting credentials like CPA, CFA, or a Japanese regulatory license, those need to be verified with the issuing bodies.
Reference Checks
Good reference checks don’t ask vague questions like “Were they a good employee?” They ask specific things about how the candidate handled responsibility, pressure, or client relationships — especially if the role is sensitive.
Sanctions and Watchlists
Candidates are screened against global watchlists — including sanctions and PEP lists — to avoid bringing in individuals flagged for financial crime, corruption, or political risk.
ID and Work Eligibility
Especially when hiring international candidates, confirming ID, visa status, and residency is a standard part of the process.
Credit History (Sometimes)
Some companies request credit checks for roles involving personal advisory or asset management. It’s not universal, and it’s always done with consent. But it can be relevant in positions where financial behavior is tied to the work.
Privacy and Legal Considerations
In Japan, personal data is protected by law. Any background check requires clear written consent under the Act on the Protection of Personal Information (APPI). That’s not just paperwork — it means candidates must know exactly what information is being collected and why.
Japan also places a strong cultural value on professionalism and discretion. So background checks need to be focused, not invasive. Companies aren’t looking for personal judgments — just confirmation that what’s on the CV is accurate and relevant to the role.
It’s Not Just for Executives Anymore
A few years ago, background checks were mostly done for C-level hires. That’s changing. Today, we see checks being run for mid-level roles in compliance, operations, tech, and even client service — not because of rank, but because of access.
A junior developer might not handle trades, but they might have access to internal systems. A mid-level compliance hire might be submitting reports to the FSA. In both cases, a bad hire can create outsized risk.
What Happens When There’s No Screening
Here’s what we see when checks are skipped:
- A candidate claims a certification they never completed. It’s not discovered until after onboarding.
- An employee is let go after multiple missed regulatory filings. Reference checks would’ve revealed performance concerns in a similar past role.
- A foreign hire’s academic background is unverifiable, but they’ve already started client work.
None of these are dramatic scandals — but they’re avoidable problems. And in finance, small problems tend to grow if left alone.
For Startups and Smaller Firms
Fast-growing fintech companies sometimes delay background checks until later — often after they’ve raised funding or hit regulatory thresholds. That’s understandable, but it creates risk.
It’s much easier to build a screening process early — even a lightweight one — than to backfill documentation later under pressure from investors or partners. It also creates a stronger internal standard as teams scale.
Final Thoughts
Background checks aren’t a solution to every hiring risk. But they are a simple, useful tool for reducing the unknowns in roles where trust, access, and regulation are part of the job.
For financial institutions in Japan — whether you’re a bank, brokerage, or fintech startup — screening isn’t about formality. It’s about making smarter, more informed decisions, before small risks become big ones.
