Adverse media screening is an essential part of KYC/AML (Know Your Customer/Anti-Money Laundering) procedures. If you operate in a regulated industry, such as finance, it may be legally required for your business. However, the Financial Action Task Force recommends adverse media screening for all businesses.
Adverse media checks can protect your company against the various risks of working with a person or entity that has been involved in criminal activity such as money laundering. However, these checks can be costly and time-consuming. Keep reading to discover how to effectively implement this important process through automation.
What is adverse media screening?
Adverse media screening, also called negative news screening, is the process of searching for negative information about a person or business you intend to work with.
Adverse media sources include traditional news outlets (both in print and online), TV, and radio. News may also come from non-traditional information sources such as websites, blogs, and social media.
The primary purpose of adverse media screening is to reveal a person’s historic or ongoing involvement in criminal activities. Common adverse media examples include reports of money laundering, fraud, or the financing of terrorism. The screening process can also reveal if someone is included on a sanctions list.
Why is adverse media screening important?
Regularly completing thorough adverse media checks is an effective way to reduce your company’s reputational risk. Simply put, working with a person or business that’s known (or suspected) to be involved in some kind of illegal activity can be dangerous.
Financial institutions and other regulated organizations are required to follow AML procedures and conduct ongoing customer due diligence (CDD). According to the CDD Rule, created by the Financial Crimes Enforcement Network (FINCEN) in 2018, these businesses must monitor and verify each customer throughout their relationship, especially during onboarding. This means they must always be on the lookout for news that contains adverse information about their existing or potential customers — and when it arises, they must be prepared to make a decision on whether it presents enough risk to end the relationship.
Common adverse media screening approaches and challenges
The traditional method of adverse media screening requires manually searching for a customer’s name online and reviewing potential results to see if they contain any negative news.
However, the sheer number of news and information sources makes it impossible to accurately review the data in the millions of articles published daily.
The manual process is also difficult and time-consuming for a number of other reasons, including:
- It takes time to determine if a piece of news is truly about the person you’re investigating. False positives can be high, especially when screening customers with common names.
- It can be difficult to determine if information or its source is relevant, reputable, or trustworthy, as many outlets and platforms allow anyone to publish information without verifying its accuracy.
- Not all information is publicly available. Your business may miss negative news if it’s hidden behind a paywall, not accessible in all languages, or only visible to those in a certain region.
- Beyond searching for information, your business must also keep robust records on each matching “hit” and whether the adverse news presents a risk to your business.
These challenges would be significant even if adverse media screening was only recommended at the start of a new relationship. However, continuous screening is crucial to reducing risk. You should screen for any new negative information about all customers on a regular basis, giving extra attention to any accounts with suspicious activity.
So how can your business overcome these issues and successfully screen for adverse media without overloading your team? An automated solution is the key.
How to automate adverse media screening
Adverse media checks no longer have to be a drawn-out, costly process that involves individual searches. In fact, there’s no need to manually review sources for negative or unfavorable information ever again.
With reports that pull from a wide range of information sources, adverse media screening can be part of a completely automated KYC system. It fits in seamlessly with other CDD and EDD procedures and allows your team to quickly make decisions that reduce risk and don’t burden your customers.
Guard against adverse media with Persona
Adverse media screening is crucial for any company that wishes to avoid the risks of working with those involved in illegal or suspicious activities. It’s particularly essential for businesses in regulated industries that may be required to implement adverse media checks and other KYC/AML procedures.
To protect your business and prevent unnecessary manual tasks that cost significant time and money, you need to invest in an automated KYC solution that includes adverse media screening.
Are you ready to supercharge your EDD process and automate media screening?
Persona’s automated adverse media solution screens 400+ million traditional news outlets and unstructured sources. After running a report to gather the data and reviewing any false positives for relevance, you can take action on any customers who carry an adverse media profile, thereby protecting your business from potentially dangerous relationships.
The data and information provided by Persona under the Adverse Media report does not constitute a “consumer report” as such term is defined under the Fair Credit Report Act (“FCRA”), and the information provided by Persona is not intended to be used in whole or in part as a factor in determining eligibility for credit, insurance, employment or another eligibility purpose that would qualify it as a consumer report under the FCRA.