The Importance of Negative Media Coverage Controls in Today’s Anti-Money Laundering Environment

What is negative media coverage?

Negative media coverage is defined as any type of unfavorable information found in a wide variety of news sources – both “mainstream” media and those from unstructured sources. The risks associated with conducting business with individuals or companies with an unfavorable media profile are many and varied.

Where does the negative media coverage come from?

Negative media coverage can come from a variety of sources, including traditional news media such as newspapers in print or online or news broadcast on radio and television. However, more and more new negative medical coverage can also come from blogs, web posts, and unstructured sources such as social feeds and unstructured forums.

Why do I need to do negative media coverage checks?

Adverse negative media coverage can reveal involvement in money laundering, financial fraud, drug trafficking, financial threat, organized crime, financial terrorism and more. These links pose a serious threat to the reputation of companies and can lead to legal repercussions, especially if these companies operate in a regulated sector.

Why is it essential to automate negative media coverage checks?

Despite the pressing need for effective and efficient media monitoring, traditional, manual solutions pose significant challenges for today’s compliance teams. Traditional processes typically group clients into « risk buckets » of low, medium, and high risk. This is a problem for a number of reasons:

• To comply with regulatory requirements, high-risk customers must be monitored on an ongoing basis. But the processes by which people are classified as high risk and subsequently followed up often leave much to be desired.
• Institutions resort to searching the Internet, searching for articles on the Internet, and manually searching for negative information about each high-risk client, through an Internet search. Then compliance personnel should review these potential matches to determine if the person named in the media reports is the person they are investigating. This type of research is incredibly labor intensive and results in high compliance costs for institutions.
• Limits to manual monitoring also mean that some media sources can be omitted. Moreover, these searches only provide a static snapshot of risk levels; in a world where media coverage is updated by the second, this is insufficient.

In this rapidly changing media landscape, a process that relies on user-initiated searches cannot compete with automated approaches that notify institutions when there is something of interest to them. By using next-generation technology to easily tailor searches to your customer profiles and regulatory requirements, adverse media can be leveraged to give you a better understanding of your customers.

Want to learn more about filtering out negative media coverage?