Beyond the Know Your Customer (KYC) verification, conducting thorough checks at multiple points in a transaction can make a difference. This is where adverse media screening can fit into the Anti-Money Laundering (AML) process.

What is adverse media?

Adverse media refers to negative news or information on a person or group from verified news outlets. This type of media can damage not just their image but also have a domino effect on a business's reputation, which can lead to financial loss, and ultimately legal and regulatory issues.

Considering information can spread even faster online in today's age, getting a head start on adverse media screening helps protect your business from potential risks or threats.

What is adverse media screening? 

Adverse media screening also referred to as negative news screening, investigates persons or businesses for any suspicious activities that may pose a risk to operations. These adverse media checks play a significant role in AML compliance obligations.

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Identifying potential risks in this way also supports the Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD) processes, which are recommended by regulators like the Financial Action Task Force (FATF) to aid in monitoring transactions.

The adverse media screening process

To effectively carry out adverse media screening, following a meticulous step-by-step process is necessary. These actions enable businesses to make sound decisions with the right sources.

1. Define search filters
   The first step involves refining the search. Sifting through data is made more efficient with set criteria in place. This should be based on regulatory requirements and your business's risk appetite.
   
   To yield better results, getting specific with keywords is necessary. Add information that includes details such as an individual or organization's name, alias, gender, address, country of operation or residence, and AML keywords like "bankruptcy", "terrorism", or "money laundering".
   
   
2. Data collection
   Adverse media can come from many sources. Automating the data collection stage can be done with Application Programming Interfaces (APIs) and web crawlers.
   
   
3. Data screening
   Manual screening for data is possible but can be time-consuming. With all the resources on hand, an adverse media screening tool can process and flag potential risks quickly and efficiently, provided that the relevant filters are in place.
   
   
4. Analysis and assessment
   Verifying the credibility of identified resources improves decision-making. This acts as an extra layer of data review for context and relevance to flagged adverse media content. Aside from this, cultural and language differences may need to be screened.
   
   
5. Data reporting
   When results are ready, filing completes the process. As part of the adverse media screening process in AML compliance, documentation and reporting are valuable for businesses.
   Findings should be shared with stakeholders, legal teams, and compliance officers for proper risk management. If there are no issues, keeping records in stock prepares the business for audits.

The screening process is designed to be thorough, however, it is possible to conduct a simple Google search for negative news checks. It can be helpful as a general risk check for your brand reputation on top of adverse media screening. The challenge lies in checking the source's legitimacy.

Sources of adverse media 

There are many sources of adverse media. Knowing which platforms to check can help you identify the kind of technology you need to monitor negative news.

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News content

Credibility and legitimacy are vital to adverse media screening. News outlets have articles that cover a plethora of topics. It's worth considering sources who specialize in financial crime topics. Some reliable news outlets for relevant content include The Financial Times, Thomson Reuters, CNBC, and Bloomberg News.

Regulatory bodies

Keeping an eye on alerts on regulatory reports can enable faster identification of individuals or organizations with non-compliance issues. Fines and lawsuits on unethical or illegal practices fall under this resource as well and are worth looking into.

Databases and public records

Government databases and public and court records provide a more diverse range of information that may not be readily available on news outlets.

Given the volume that comes with screening this data, using adverse media screening technology can standardize risk management and analysis.

Watchlists

Local and global watchlists for high-risk clients or entities can also serve as another reliable source to include during negative news checks.

The benefits of automated adverse media screening

Adverse media can be checked in two ways: manually or with automated screening.

With manual checks, you can be as thorough as you need, but this method can prove to be time-consuming and taxing. The amount of effort it takes to screen clients against countless sources may result in unwanted errors.

Adverse media screening is focused on minimizing risks that can negatively impact a business and its clients. This makes automating adverse media screening a viable option, especially for financial institutions or businesses with large client bases. Employing the right automation tools enables you to cycle through the process more efficiently and thoroughly.

Let's take a look at the benefits of automated screening.

1. Identify fraud and risks fast

Time is gold, even more so when risks are high. With the right search filters and sources in place, adverse media screening tools can check clients in bulk. Combing through numerous databases at once becomes easy, and so does finding relevant information. This means early detection of risks that safeguard the business and its clients.

2. Ensure regulatory requirement compliance

High-risk clients are not always detected upon KYC and CDD. Effective adverse media screening digs deeper into a client or entity's background. Machine learning algorithms in automation tools can find PEPs, links to organized crime, and other associated risks.

3. Minimize error rate in the screening process

Automation tools give you real-time results with precision. With the right screening process in place, businesses can pull relevant and legitimate sources to back any flagged risks. This means well-documented reports for audits or instances where investigation is necessary.

Additionally, good tools can cross-check global data with language and regional differences for relevance.

4. Cultivate client trust

Implementing adverse media screening in AML compliance protects your customers. Risk assessment and monitoring ensure client safety with every transaction.

5. Preserve brand integrity and reputation

Brand integrity and reputation go hand-in-hand with client trust. Maintaining a consistent screening process effectively protects your business as well.

How to curb the challenges of adverse media screening

Screening negative news also has its challenges. Many online sources can spread news fast on multiple platforms, sometimes too fast that initial checks may not catch them in the first stage of reviews. There are language and cultural barriers for global clients and entities, as well as the chance of running into false positives and negatives.

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Fortunately, there are ways to overcome these challenges. These best practices can be integrated seamlessly into the screening process.

Start with a risk-based approach

Not all clients are equal. Categorizing the level of risk for each individual or entity can either allow you to streamline the screening process or conduct a more thorough review. In the long run, this can save on resources by allocating efforts accordingly.

Collect comprehensive data 

Collecting comprehensive data keeps screening results relevant and precise, effectively minimizing the chances of false positives or negatives. Building a thorough KYC process that identifies the most important details of a client or entity will go far in identifying data that accurately matches each individual or organization.

Select relevant screening sources

When conducting adverse media screening, sources are valuable. Consider legitimacy, relevance, and context. Having a wide variety of databases and news outlets specializing in financial crime makes routine checks more thorough and reliable.

Refine risk assessment criteria

Make well-informed decisions on your client's impact on the business. Establishing risk assessment criteria builds consistency in your process and determines the significance of adverse media screening results. Looking into fine details like publishing dates or relevance to an issue can make all the difference.

Automate negative news screening 

Automation has the power to analyze multiple forms of data with speed, ultimately supercharging the AML compliance process. This can prove effective for businesses and financial institutions, especially those operating on a larger scale. All streams of critical information is thus accounted for upon negative news checks.

Investing in adverse media screening

Filtering high-risk individuals and entities is a must for financial institutions. Aside from ensuring AML compliance, negative news checks can protect both clients and businesses from fraudulent or illegal activities, organized crime, and unethical practices.

By investing in an automated service for screening and monitoring adverse media, you can cover all the bases for quality and efficiency. Vespia's adverse media screening tool works with sophisticated technology to keep you alert and informed.

Vespia's Adverse Media Screening Solution

• Comprehensive risk assessment
  Analyze thousands of adverse media from global news sources with AML keywords and Google search
• Tailored search filtering
  Work with rule-based or AI-driven filters to enhance screening accuracy
• Real-time monitoring
  Stay informed with ongoing monitoring
• Real-time KYB check monitoring
  Be aware of any changes in businesses you monitor with KYB check updates
• Intelligent alerts
  Customize alerts based on your risk assessment criteria

With the right screening process in place, you can improve your financial surveillance drastically. Sign up and get a free 14-day trial, plus a demo from the team. Discover how you can automate adverse media screening with Vespia.

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