Customer due diligence includes adverse media screening (AMS), sometimes known as media monitoring or unfavorable news screening (CDD). At its most ba
Customer due diligence includes adverse media screening (AMS), sometimes known as media monitoring or unfavorable news screening (CDD). At its most basic level, AMS is the practice of comparing (or “screening”) a client or prospective consumer against unfavorable information and data sources. Anti Money Laundering Software For Financial Services helps enterprises avoid reputational harm by allowing them to anticipate and mitigate possible problems before they occur.
Adverse Information’s Consequences
Prior criminal conduct is one of the most prevalent forms of negative information. For example, suppose authorities suspect a person involved in a financial crime and learn that person has already been arrested for another crime. In that case, they have even more grounds to accuse that person of being involved.
In contrast, if a person has no criminal background and is not known for associating with others who do, they are considerably less likely to become engaged in a money-laundering operation.
Another sort of pertinent unfavorable information that people frequently look at is whether or not someone is on a sanctions watch list. If they are, likely, it is not for a legitimate purpose, and authorities should be on the watch for any financial crimes they may be involved in. Anti Money Laundering Software For Financial Services can help them avoid getting into legal trouble for any adverse media-related issue.
What Is Adverse Media Screening, and How Does It Work?
The practice of examining numerous news and information sources for unfavorable knowledge or activity linked to your clients is known as adverse media screening. Adverse Media Screening Software Solution can disclose a variety of things that could indicate an increased risk of money laundering, including the following:
Press stories or social media posts that throw doubt on a customer’s trustworthiness, authenticity, or reputation.
Information about a customer’s life or business that emphasizes its complexity, such as ties to other high-risk or reputationally dubious persons or enterprises
News of a customer’s financial difficulties may drive them to desperation, making them vulnerable to corruption or fraud.
Indications of corruption in the past or present that might be replicated.
Money laundering, terrorist funding, drug trafficking, cybercrime, and fraud are among the claims or indictments made by law enforcement agencies.
Actual criminal convictions, particularly in cases involving financial criminality
Traditional media outlets such as newspapers, magazines, television, radio, and current internet resources such as websites, blogs, and social media may be screened locally, nationally, and internationally. In addition, Adverse Media Screening Software Solution can help financial organizations hunt for negative information about their clients in databases maintained by law enforcement, government agencies, and businesses.
Adverse Media: As Part of Continual Monitoring
Adverse media checks should be performed more often for high-risk clients as part of the continuing customer risk assessment exercise. This is because negative information, such as articles accusing a person of fraud, can raise their risk rating and lead to the submission of a Suspicious Activity Report.
The bad news is sufficient to perform more due diligence on a customer or their beneficial owner. Negative news does not have to be confined to an allegation or conviction involving financial crimes; a client’s bad reputation might be enough to put them in danger. PEP Monitoring Software is a tremendous technical asset in continual monitoring.
What Are Sources Utilized to Filter for Unfavorable News?
Negative news can be found in a range of official news sources and unstructured data sources, including social media, online forums, and databases.
However, it’s always a good idea to double-check the source’s quality, authenticity, and independence to avoid being duped into using biased, partial, or fraudulent news.
News stories may not just contain information on a particular person or firm. Still, they may also include the names of people or companies with direct or indirect ties to the financial institution.
Depending on the industry’s goals, PEP Monitoring Software can be employed for adverse media screening. The sources range from primary search engines to other government documents, social media, and any other material that can give reliable data to help the inquiry achieve its goal.
Compared to statutory requirements for customer screening for sanctions and politically exposed individuals (PEPs), guidelines for screening against unfavorable media are less formal and often leave room for interpretation.
However, the volume of negative media counsel continues to rise worldwide to fight illegal finance flows. Understanding the importance of adverse media screening is necessary for companies to maintain a good reputation.