Adverse Media Check (also known as media monitoring or negative news checking) refers to any unfavorable information found about individuals and entities in traditional news articles and unstructured sources and is an important part of due diligence (SDD, CDD and EDD).

In its simplest form, Adverse Media Check is the process of comparing a client, or potential client, to negative news and data sources. Adverse Media Check allows you to spot a potential problem before an institution becomes associated with it or allows its reputation to suffer as a result.

Although the due diligence guidelines are less structured than other regulatory requirements for customer due diligence and ongoing monitoring (such as sanctions and politically exposed persons (PEPs), due diligence is increasingly seen as an important aspect of a well-rounded anti-financial crime program.

What are the challenges of Adverce Media Check?

There are many challenges with due diligence – and most business managers and financial crime professionals at supervised institutions are familiar with them. Their “frontline” teams are often inundated with an unsustainable volume of alerts and information, and their time is often consumed by lengthy discussions about the relevance of those alerts.

In an era of fake news and targeted disinformation, researching and finding reliable information about a counterparty remains a constant challenge, and while missing important updates could result in regulatory breaches, constantly monitoring unstructured news and data sources is very complex, time-consuming and expensive.

Solutions for Adverse Media Check

Compliance professionals following the risk-based approach promoted by the Financial Action Task Force (FATF) formulate their own risk-based models, using a variety of tools and techniques, without clear guidance on best practices. However, even effective large-scale programs face unsustainable volumes of publicly available information, varying credibility of news sources, and inaccurate matching and identity verification.

While searches/checks are run automatically, Adverse Media Check teams can reduce manual effort with configurable search precision, ad-hoc screening, batch processing, and real-time screening—all of which are enhanced by client attributes, contextual information, and observed relationships.

Guidelines for the use of personal integrity checks are less structured and often open to interpretation. But in order to effectively counter illicit financial flows and combat money laundering and terrorist financing, the volume of negative media guidelines is consequently increasing.

Where does personal integrity screening appear?

Here are some examples of where negative media appears:

• traditional news sources and media outlets;
• databases of international organizations;
• blogs and web articles – including websites that publish issues involving corruption, racketeering and financial fraud;
• social media and online forums – examples include Reddit forums of fake organizations and news searches on Facebook and Twitter.

Why conduct a Adverse Media Check?

Adverse Media Check about a client does not always have to be a conviction or proven financial crime. A poor reputation for non-compliance with the law or payment history can be enough to expose a company to risks.

Some of the benefits of adverse media check include:

• in a fast-growing business, manually screening clients for Adverse Media Check coverage is not always possible or practical. However, automated Adverse Media Check services can batch-screen clients across multiple databases and news sources for the most relevant results;
• Adverse Media Check for high-risk clients supports a strong risk management strategy. Risks that are not identified during KYC and CDD are often discovered during the screening of a customer or entity for negative news coverage;
• Adverse Media Check impacts a customer’s risk assessment, leading to the filing of a Suspicious Activity Report (SAR) and further in-depth analysis of the customer or their beneficial ownership;
• the benefits of automation are realized by delivering highly accurate results, in real time, with corroborating sources;
• automated Adverse Media Check services overcome language and regional barriers, providing a global result that might otherwise go unnoticed;
• the addition of the Adverse Media Service to the KYC Registry connects global Adverse Media Check reports for a more comprehensive review of customers;
• since Adverse Media Check originates from information in the public domain, no permissions are required to view the reports.