A quick look back into 2020, financial crime was a daily headline. Fraud, including money laundering and corruption, is the largest source of financial crime directories across the United States raising a red flag for adverse media screening services. This timeframe has been critical in facilitating money laundering threats to the United States and the dilemma continues to this date.
According to the FinCEN alert on November 23, 2023, the U.S. Department of the Treasury, FinCEN, in close collaboration with Internal Revenue Service Criminal Investigation (CI), highlighted suspicion in response to detecting suspicious activity associated with the COVID-19 Employee Retention Credit (ERC).
The Criminal Investigation (CI) has detected ongoing fraud resulting in a potential $2.8 billion of fraudulent claims that emerged through documents indicating that ERC was being obtained by a third-party firm whose credentials cannot be verified or is the subject of adverse media.
This blog will be your walkthrough for understanding adverse media screening, and key adverse media strategies, providing insights into the critical steps to avoid being subject by timely mitigating potential risks associated with individuals or entities.
What is Adverse Media Screening?
Under FATF guidelines, adverse media is considered a potential source to gather information among many financial institutions, expect to leverage the data to develop accurate customer risk profiles. FATF precisely cites adverse media as part of an effective EDD program, by which PEPs and other high-risk customers receive higher scrutiny.
Adverse media refers to any negative or unfavorable information about an individual, organization, or entity publicly available through traditional and modern media sources. This information may include news articles, legal proceedings, regulatory actions, or any content that indicates potential risks, financial improprieties, criminal activities, or other detrimental aspects associated with the subject.
The question arises, how to find out that particular adverse media is surely related to a specific individual or case at hand?
For this purpose, industry-leading AML Screening tools and technologies are employed to navigate adverse media screening and fortify risk management. Here are some key strategies to know!
Master Adverse Media Screening With 4 Key Strategies
In the light of the data intelligent, 2023 State of Adverse Media Screening report, 71% of compliance leaders use artificial intelligence (AI) or machine learning (ML) as a core component of their adverse media screening while 20% still rely on manual processing. Discover how advanced technology can be a game changer for compliance-perfect adverse media practices.
1. Screen against diverse media sources
AML screening is only viable when credible data sources are used. However, the accuracy of adverse media solution varies making it crucial to abide by traditional and nontraditional sources alike.
In light of Reuter’s article, Credit Suisse faced allegations of facilitating tax evasion through its account. The conspiracy originated through an anonymous tweet exposing the bank’s involvement in tax evasion which was then hyped by German Daily and other investigative journalism resources amplifying the need for diverse data sources including social media for prompt detection of financial misconduct.
2. Deploy advanced matching technology
Maximize online adverse media screening with advanced matching using Natural Language Processing (NLP) for autonomous understanding of human language, enhancing accuracy, reducing false positives, and enabling more clear analysis of risk associated with individuals and entities.
In response to the September 2020 case of FinCEN leaks referring leak of suspicious activity reports (SARs) to BuzzFeed News and the International Consortium of Investigative Journalists (ICIJ), BBC suggests banks to monitor both the payer and payee via name rather than transactions alone to fortify their AML controls and compliance framework.
3. Leverage sentiment differentiating measures
Online adverse news screening is much more than simply detecting matches. It extends into understanding the context and sentiment associated with mentions playing a crucial role in navigating through the complex web of false positives and false negatives. Gain a more comprehensive understanding of potential risks, missing out on hitting the wrong matches and irrelevant media adversaries.
In reference to the Lachaux vs. Independent Print Ltd case, the legal proceedings ruled out that news articles on Lauchaux matched the Defamation Act 2013, setting a standard for publications to analyze the knowledge, content, and context of the information, highlighting the need for sentiment analysis emphasizing the global impact of a reputational threat to individuals and entities.
To sum it up
Evaluating the evolving nature of financial crimes highlights the need for advanced adverse media monitoring, modern technology, and its significant partaking in mitigating risks and financial threats fortifying adverse media screening. The findings from this blog affirm leveraging sophisticated technology to foster secure, robust, and reliable online adverse media checks to match an enhanced level of risk governance.