Adverse media screening is a key component of any due diligence process and one that you may have encountered if your business is subject to anti-money laundering (AML) or know your customer (KYC) rules. But what is it, why is it important, and what purpose does it serve?
What is Adverse Media Screening?
As the name suggests, adverse media screening relates to the “screening” of adverse news, also known as negative news. This news can come from a variety of sources and concerns anything that relates to money laundering, fraud, corruption, exposure to sanctions, and any kind of financial crime.
For instance, if you run a business that is subject to AML and KYC rules, you may be required to check new clients, customers, or partners against adverse media lists to see if there are any issues that need to be addressed.
By its very nature, guidance relating to AML and KYC is strict and specific, but that’s not true for adverse media screening. It’s still an important piece of the puzzle, but the framework surrounding the screening process and methods are not as structured as other regulatory requirements.
Is Adverse Media Screening Easy?
How do you differentiate fake news from the real thing? How do you know if what you’re reading is a hit piece created to slander the individual or genuine content addressing real concerns?
We’re living in an era of disinformation, an era where anyone can say anything they want without fear of recrimination. If you so wished, you could create content that calls your neighbour a money-laundering drug lord. If they have a substantial online presence, enough to clip audio and video clips, you could even create fake videos of them admitting to their non-existent crimes.
It’s scary, it’s concerning, and it’s why adverse media screening can present many challenges.
But that’s not all.
The sheer quantity of available content adds an extra degree of difficulty. It can be hard to separate useful content from the noise. It can also be difficult to know what is genuine and original and what is just a regurgitated lie.
Why is Adverse Media Screening Important?
As with any part of the due diligence process, adverse media screening is all about zeroing in on high-risk individuals and ensuring they stay well clear of your business. That could mean avoiding clients who have been previously charged with fraud or refusing customers who are on sanctions lists or connected with sanctioned individuals.
As noted in our guide to the penalties for breaking sanctions, companies can get into serious trouble for failing to meet these terms.
But it’s not just about avoiding compliance issues and ensuring all boxes are ticked. It’s also important to stay clear of entities that may harm your business or cause legal complications further down the line.
What is the Adverse Media Screening Process?
Adverse media screening begins with a structured set of best practices that all companies should adhere to:
· Perform a risk assessment
· Screen at the most suitable time
· Perform checks using credible and reputable news sources
· Use efficient technology to reduce the burden and ensure a fast and smooth process
· Create an audit trail
It’s also imperative to create a strong anti-crime and pro-regulation culture within your organisation. Don’t see these regulations as boxes that need to be ticked and hoops that you need to jump through. Sure, it’s red tape, and it can complicate daily operations, but these rules are ultimately there to protect your business, your customers, and the wider economy.
As for the actual steps involved with adverse media screening, it usually looks something like this:
Define Which Types of Media Will Be Used
Create a list of media sources. These can include online newspapers, blogs, and other sources of news.
Ensure that they are all reputable and can be verified. So, a tabloid known for publishing bizarre stories about celebrities and aliens would have decidedly less value than an independent newspaper like The Guardian, for instance.
If the source itself can’t be verified, then focus on the writers, being sure to avoid those who have a habit of publishing misleading or outright false information.
Plan Your Screen
Create a plan of action for adverse media screening, determining when the screening should take place, how often, and which types of media will be checked. You should also create a time limit for the information gathered, deciding when it will no longer be relevant.
Information has a way of sticking around on the internet, so decide how much weight you will give to information that is old and potentially outdated.
Create Manual or Automatic Checks
Will the checks be manual or automatic? Manual is obviously the most time-consuming, but it’s doable if you run a small company and have very few clients/customers. However, if you typically process a large number of entities, automated processes are best.
Whatever option you choose, perform regular quality control to make sure the end product is always as good as it can be.
Regulations and requirements are in a constant state of flux, and if you run your own business, you must stay up to date with these changes or hire someone to do it for you.
Summary: Getting Help with Adverse Media Screening
We mentioned the complications of adverse media screening, noting how it can be difficult to separate fact from fiction and ensure you make the right decision.
That’s why it’s important to work with trusted providers who can source the right data and help you to make the best decisions for your data. It’s one of the services that we provide at A Data Pro—check out our adverse media screening for more information.