As regulatory compliance requirements become increasingly stringent, robust compliance solutions that use a diverse range of sources are more critical than ever, and one area that is becoming increasingly important in terms of enhanced due diligence, is advanced adverse media screening.
This whitepaper examines the critical role of adverse media screening in mitigating financial crime risks, providing detailed analysis of adverse media, their sources, and how they can indicate potential threats. It will also look at how businesses can develop an effective adverse media monitoring strategy, including best practices for analysing and interpreting findings. It will also explore how automated adverse media screening enhances risk detection, improves efficiency, and supports compliance with key regulatory requirements.
The term ‘adverse media’ - also known as negative news screening - refers to the process of identifying and analysing negative or damaging information about individuals or entities found in various media sources, to assess potential risks and ensure compliance with regulations.
Carrying out adverse media screening is a crucial part of any compliance and AML check, as it helps identify any potential issues thereby reducing the risk of going into business with a company or individual that is involved in – or has a history of being involved in - money laundering, fraud and other financial crimes.
Years ago, adverse media would have only referred to negative stories and information in traditional sources of news, such as national, regional and local newspapers, TV and radio. However, over the past few years, the way in which we communicate – and receive our news and information – has changed exponentially. There are now hundreds of thousands of news sources - from traditional media, through to digital news sites and, social media platforms - therefore, any good adverse media check needs to include a much wider range of sources.
This not only means going to a wide range of trusted sources, but also considering information found in unstructured and unverified sources as well, such as social media platforms, online forums, and the public databases of key organisations.
Below is an example of the types of media sources that should be included in any adverse media check:
There is no specific definition of what constitutes as ‘adverse media’ - it is any negative information that could suggest there is a risk. However, there are some key ‘red flags’ to look out for, such as a criminal record or historic sanctions; some examples of things that might be thrown up in an adverse media search include:
However, if your search does not return any of these extreme kinds of negative information, it may uncover other red flags that could suggest financial risk. These types of reports are more likely to be found in news outlets, on forums or social media, and may include:
As already discussed, adverse media screening is a vital part of enhanced due diligence as it can uncover negative information about a potential client which can prevent risks before they happen. Here are some of the ways in which a good adverse media screening solution can prevent risk:
An adverse media search is the process of searching all the sources mentioned above – structured and unstructured - for any mentions of an individual or businesses’ name or address – including nicknames, aliases, previous names, and acronyms as well as variations in spelling and typos.
These types of checks should form a vital part of any regulated firm’s risk assessment as they help to identify if a potential client is a liability, i.e. if working with them poses a risk to your business.
Running the adverse media search is just the first part of the process – you then need to know how to interpret the findings. Again, there is no defined way in which to do this, but a structured approach helps assess credibility, relevance, and impact, ensuring informed decision-making. The key steps should include:
Given there are tens of thousands of national newspapers in the world, not to mention all the online news sources and social media platforms, it would be impossible to carry out a comprehensive adverse media search manually.
Not only can manual adverse media checks be incredibly time consuming, but it can also be difficult to know if you have covered all bases. For example, your business might not have access to all the records you need to search thanks to pay walls, language barriers or difficulties searching media in other countries.
There is also more “fake news” circulating the media more than ever before making it difficult to work out what a credible and trustworthy news source looks like.
The most accurate and reliable way to run an adverse media check is to run a digital check, using specialist sources such as the Dow Jones powered Factiva database.
Factiva is one of the largest news aggregators and archives in the world with access to more than 33,000 sources, covering more than 200 countries and 32 different languages. By automating an adverse media check via Factiva, and cross checking with other screening - such as PEPs and sanctions - you can create a highly comprehensive enhanced check which - unlike content in web sources which can be changed and deleted – is permanently traceable and retrievable.
SmartSearch is a unique digital verification platform delivering comprehensive identity and verification checks on individuals and businesses with automatic screening, enhanced due diligence, data hosting and monitoring, including advanced adverse media screening.
Thanks to SmartSearch’s automatic enhanced due diligence and ongoing monitoring solutions, not only are risks relating to potential clients identified at onboarding, but any new and emerging risks relating to existing clients are also identified allowing businesses to take swift and immediate action.
Benefits of the SmartSearch adverse information screening solution:
Adverse information screening is an essential tool in modern risk management strategies, helping organisations remain compliant, protect their reputation, and avoid financial and legal penalties.
To find out more about how SmartSearch can help you with advanced information screening, get a free demo and discover why more than 7,000 regulated businesses rely on SmartSearch.