In an era of heightened regulatory scrutiny, evolving sanctions regimes and increasing financial crime-related risks, the role of adverse media screening providers (also known as negative news screening) has become indispensable for know-your-customer (KYC), enhanced due diligence (EDD) and general client investigative needs. Here’s a succinct breakdown of what distinguishes a top-tier provider in this critical field, and what to look for when making a purchasing decision.
Accuracy and Relevance: Accuracy is paramount in adverse media screening. Leading providers employ robust algorithms, advanced techniques and validation processes to ensure that identified adverse media is relevant and not false positives. This enhances the credibility and effectiveness of their screening solutions.
Providers are also committed to working closely with their customers, to ensure a feedback loop is in place to continually improve accuracy and ultimately drive greater relevance and materiality in what end-user analysts see. To achieve this, a vendor must prioritize customer and solutions support.
Application of Advanced Technology: Utilizing cutting-edge technology such as artificial intelligence (AI) and machine learning, top providers are able to efficiently process vast amounts of data to identify relevant adverse information. This technology enables faster and more accurate risk identification, while also driving cost savings for end-users.
Technology is not only about data triage, equally important, is the workflow that is on offer. Trailing companies will offer partial information and clunky workflows to evaluate adverse media at scale. Leading vendors have thought through the data, how it is configured and ultimately, how an analyst will interact with it to make a decision.
Customization and Flexibility: Recognizing that each client’s risk profile is unique, top providers offer customizable solutions tailored to specific industry sectors and compliance requirements. Flexibility in screening parameters allows clients to adapt to changing regulatory landscapes and emerging risks.
For example, the application of adverse media for private banking may require different tuning than what is necessary for correspondent banking. The level of configurability that a vendor offers will greatly determine the efficacy of the program and the ability to execute it using a well-thought-out risk-based approach.
Data Coverage: A leading adverse media screening provider offers extensive coverage of online and offline sources, including news outlets, blogs, social media, investigative reporting organizations, and regulatory databases. This breadth ensures comprehensive risk assessment and detection at the time of search.
To ensure full coverage, a leading provider will also offer the ability to configure news to consider foreign languages that match their operational footprint. For example, scanning adverse media across English, German, Spanish, French, Portuguese, Mandarin and Arabic accounts for the vast majority of content found on the Internet (with English accounting for roughly half).
Regulatory Compliance: Compliance with regulatory standards, such as those outlined by the Financial Action Task Force (FATF), is non-negotiable for top providers. They adhere to stringent compliance protocols to help clients meet their regulatory obligations and mitigate legal risks, including, but not limited to considering predicate offenses and other emergent risks (e.g., environmental crime, wildlife trafficking, modern slavery, etc.) as part of their risk taxonomies that users can configure for.
Continuous Monitoring: Effective adverse media screening is not a one-time task but an ongoing process. Leading providers offer continuous monitoring services to keep clients informed of any new adverse information that may arise post-screening. While one time look-ups can be helpful, and are representative of a legacy approach, it is not considered leading edge and takes away key value in having adverse media screening persistently deployed.
Platform Security & Ongoing Vigilance: Leading providers will have in place security validation, such as SOC 2, Type II and demonstrate ongoing vigilance in the form of external system penetration testing and the maintenance of a Chief Information Security Officer (CISO). The security of a client and their data is paramount in evaluating any software relationship.
By embodying these qualities, top adverse media screening providers play a crucial role in helping organizations safeguard against financial crime, maintain regulatory compliance, and preserve their reputation in an increasingly complex business environment.
To find out more about Sigma360’s approach to advanced adverse media capabilities please request your demo today.
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Using Sigma360’s risk decisioning software platform, organizations can not only get ahead of risk, but leverage unstructured data – like the news highlighted in this article – to further contextualize its impact and how it manifests across other entities that may impact counterparty relationships.
