Adverse Media Screening and its importance in AML compliance
Is screening against particular sanctions listed publicly by the regional and international regulatory bodies enough to detect suspicious persons and mitigate the chances of money laundering and other financial crimes? The reality is that they are not sufficient, there are still many other areas that need to be monitored and screened to find the connection of money laundering activities. Adverse media screening is one such important area, this way financial institutions can identify the people involved in criminal activities through the negative news published about certain people on the internet, newspapers, or even social media platforms.
Adverse media screening collects negative information from various public sources such as news reports, websites, publicly available databases, and social media platforms. The adverse media screening helps institutions protect their reputation from making any business relationship with the people who emerge in the negative news. Are there any more beneficial ways for financial institutions to enhance the compliance program and reduce money laundering and other financial crimes? In this blog, we’ll explore four ways that adverse media screening can significantly enhance compliance efforts.
- Early Detection of Negative News
To stay ahead of the criminals, businesses need to allocate a special resource that must keep an eye on the latest negative news screening, particularly about their clients. This helps businesses to detect negative information about their customers in real time. By identifying adverse media news at the early stage, businesses can take strict and in-time actions against such individuals to mitigate the chances of money laundering and also reduce the risk of any repudiation damage. Let’s understand it with an example: if one of your clients appeared in the news that reported that the person is involved in a money laundering scandal, in such scenarios, the compliance team can take immediate action against such person by reassessing the relationship and potentially terminate the relation with such individual to avoid being associated with criminal activities.
2. Don’t make business relationships with high-risk Individuals or Entities
Would any business like to make a relationship with a person who has been involved in money laundering or any other criminal activities? Engaging with such entities can harm the business’s reputation and may cost millions of dollars. For a moment think about a person who has political affiliations, holds prominent public office, and is making a business relationship with you. You will have to put an extra layer of security to avoid onboarding a person who has a higher risk of being indulged in financial crimes.
3. Comply with AML Regulatory Requirements
Though knowing every negative news isn’t necessary, still businesses need to closely look at the news circulating on the media, publications, websites, or any social media sites, because it could be about one of your clients, business partners, vendors, or customers that could damage your business reputation. So, it also ensures that your business is complying with the latest and updated Anti-money laundering and counter-terrorist financing regulations because these regulatory bodies require companies to perform enhanced due diligence and adverse media screening is essential. Therefore, businesses conducting adverse media screening not only comply with regulatory standards but also safeguard their reputation against negative exposure related to compliance failures.
4. Ongoing Monitoring and Real-Time Alerts
The criminals have opted for the latest technology and techniques so the measures could also be advanced that must be performed in real time. One important thing, businesses need to understand that this is not a one-time investment. So, businesses need to stay ahead of the criminals by implementing continuous monitoring to stay on top of any developing risks.
5. Protecting the Company’s Brand and Public Image
What is the most valuable thing for financial institutions? Doesn’t it protect the company’s reputation? Therefore, if a business thoroughly screens against the advanced media screening, ensure that their clients are not listed in any negative news and implement the advanced screening solution against the politically exposed persons and other higher-risk individuals. Therefore, protecting your business from these associations is crucial to maintaining trust with customers, investors, and stakeholders. So, businesses need to be over-cautious while onboarding new clients to protect businesses from fraud or any other criminal activities.
Summing It Up
Adverse media screening is not only performed to ensure that your business is not making any relationships with criminals or individuals with higher risk profiles. It’s the regulatory requirements that companies have to implement. Therefore, businesses must keep an eye on the latest negative news as early as possible. This will help them to minimize the chances of being involved with criminal individuals. But the question is how businesses can stay ahead of the criminals. Is just checking the news circulating over the internet enough to avoid interacting with criminals? AML Watcher provides one such tool that allows your business to stay ahead of the game and not let any negative news out of your site as early as it publishes.
