The stakes are high in the compliance game. Compliance enforcement has grown far more stringent in recent years, while sanctions and penalties for noncompliance have grown far steeper. In fact, the number of AML fines assessed against financial institutions alone was the highest in six years in 2021, totaling some $1.6 billion globally.
Adverse media screening is a powerful compliance asset, and a key element of any organization’s Customer Due Diligence (CDD), Enhanced Due Diligence (EDD), Know Your Customer (KYC), Anti-Money Laundering (AML), Countering the Financing of Terror (CFT), and other crucial regulatory compliance regimes.
Effective adverse media screening helps firms spot problems before they become associated with them, before reputational damage is done, and before they violate increasingly strict regulations.
Valuable at every stage of a business relationship, adverse media screening enables organizations to anticipate and identify risk – making more informed decisions about effective compliance responses. Like any part of risk management, adverse media screening is not a one-off process. Adverse media screening needs to be conducted during onboarding to accurately establish a customer’s risk profile. But it also needs to be done on an ongoing basis throughout the relationship, with the goal of detecting changes in risk or uncovering new data relevant to compliance.
High compliance stakes
Recently, the compliance value of adverse media screening was brought to the forefront when Switzerland’s second-largest bank, Credit Suisse, faced accusations of systemic due diligence failures.
An anonymous leak to a German newspaper led to the opening of an investigation into some 18,000 Credit Suisse accounts with combined holdings of over €100 billion. Among the account holders were well-known criminals and drug traffickers – including a Serbian securities fraudster and a German client convicted of bribery. The first fines in the investigation have already been levied against the bank, and run into the millions of Swiss Francs.
Although guidance on screening against adverse media is less structured than other regulatory requirements like ongoing monitoring for sanctions and politically exposed people (PEPs), adverse media screening is clearly a crucial aspect of any well-rounded regulatory regime.
Adverse media screening use cases
- For AML/KYC – Adverse media screening enables financial institutions to discover suspicious customers and entities with a criminal profile. Adverse media screening is specifically mandated by a long list of international regulatory bodies for AML regimes – notably the Financial Action Task Force (FATF), the EU Parliament, the UK’s Financial Conduct Authority, and many others.
- For CDD/EDD – Adverse media screening is required by regulatory bodies to seek potential evidence of a customer’s involvement in suspicious activity – including associations with third parties connected to drug syndicates, human trafficking, or other illegal endeavors.
- For CFT – Combating the Financing of Terrorism (CFT) regulations aim to restrict access to funding and financial services for those whom the government designates as terrorists. Unraveling the web of associations that comprise a terrorist network can often begin in the public media sphere.
Adverse media screening challenges
A major challenge in adverse media screening involves reaching beyond just mainstream media sources. Adverse media screening solutions are challenged to keep track of the ever-growing mass of data generated on customers and companies – which increases the chances of missing out on key risk signals.
New content from sources of all types is literally posted every minute. This means that adverse media screening solutions need to scan millions of stories from media companies, social media platforms, blogs, podcasts, influencers, and more. Additionally, given the mass of information out there, it’s crucial for adverse media screening to loop in accurate readership, audience, sentiment, engagement, and other metadata for each data source.
This is why adverse media screening rises and falls on one overriding criterium: the data behind it. With that in mind, here are three main pillars for evaluating the data that powers your adverse media screening:
- Coverage – To maximize reach and ensure that no mentions are missed, data coverage needs to include news sources from multiple counties, in multiple languages, and historical data going back at least a decade.
- Latency – Adverse media screening data streams need to contain up-to-date data that’s noise-free and constantly gathered and updated by smart, adaptive web crawlers.
- Quality – High-quality, enriched data is key to deriving insights at scale from adverse media screening – including full text and clean metadata that includes entities, source, categories, author name, publication date, and more.
Meeting adverse media screening challenges: News API
The best way to ensure your adverse media screening solution is up to date and ahead of the rest is by expanding your coverage with the world’s leading news web data expert.
Webz.io’s News Data API constantly consumes news data from millions of sources, in over 170 languages from across the web. It uses NLP to distill the meaning and sentiment behind every article, story, and image – in near real-time. This data is structured and enriched to make it quickly and easily readable by adverse media screening platforms. The end result: better adverse media insights based on better data.
Webz.io also covers the massive and buzzing global blogosphere – which generates hundreds of thousands of articles every day. We help your adverse media screening regime tap into this rich data source smartly using an enriched data feed with a smart layer of entities, sentiments, and categories. Similarly, our Gov Data API gives access to the latest data from government and regulatory agency sites. Our customized, ready-made third-party risk intelligence feeds sifts through tens of thousands of sites in real-time with filters, classifying them into over 200 categories and recognizing different types of sentiment at the document and entity level.
To see how Webz.io can help power your adverse media screening solution with high-quality, low-latency data from a huge variety of relevant sources, talk to one of our experts today!
