How to Effectively Manage Financial Crime Risks with Adverse Media Data

Adverse Media Screening is a process of scanning for adverse news about an individual or a business. It very well may be a piece of KYC and Anti-Money Laundering (AML) procedure of customers onboarding or ongoing checks screened manually or through a supplier database. Generally, it is very difficult for companies to dissect the outcomes and recognise hazards rapidly in a cost-effective way.

It is not possible to consistently screen every news source 24 hours a day. A more sensible approach is doing this around event-triggers news. However, it is significant that when negative news is recognised, that the company has the means to follow up on it.

Even with a relatively large team in place, no organisation can depend exclusively on manual checks. The time and efforts required in this process could tie staff into a lengthy and expensive procedure; particularly if the correct key words are not being used.

Nowadays, the process of Adverse Media Screening is commonly becoming more automated, with many suppliers offering attractive solutions; such as the ability to generate reporting and alerts. However, even automated screening can still lead to duplicate screenings, increased costs and positive matches on non-relevant individuals or businesses. Thus, configurations need to be developed that filter and analyse the severity of adverse media to improve the understanding of the level of risk.

With clearly defined processes, expert teams and technologies in place, organisations can turn adverse media searches from just another compliance check into a much-valued risk management.

According to the FCA, the pillars of a Financial Crime Compliance should include:

Governance – A Firm is expected to take responsibility for managing financial crime risks, in the same approach as other risks that are faced by the business.

Management information (MI) – Senior management should have an overview of both the financial crime risks and emerging risks which the firm is exposed to and any changes to the firm’s risk assessment.

Structure – Ensuring that the firm has appropriate skills and experience internally and that the structure promotes strategy and information distribution across the business.

Risk assessment – Applying risk-based decisions to determine what to screen and when to screen. Firms can then target their financial crime resources on the areas of greatest risk.

Policies and procedures – Defining requirements for what must be screened and how information should be handled and considered, including up-to-date policies and procedures.

Staff recruitment, vetting, training, awareness and remuneration – Firms must employ staff with the relevant skills, knowledge and expertise to carry out their roles adequately.

Quality of oversight – The Firm is expected to ensure that their policies and procedures are correct and followed to a broad level.

It is important to realise that Adverse Media Screening cannot possibly detect every possible risk and the efficiency of screening will be different from one organisation to another, even though similar screening procedures and automated systems may be being used.

Sandra Jerinic
Sandra Jerinic
Sandra Jerinic is a Senior Account Manager at REG Technologies. Sandra is an approachable results-orientated Customer Engagement specialist. She is passionate about providing customers with the best possible service to deliver client satisfaction and growth.
Connect on LinkedIn and find out more about how REG can help you, or call 0203 946 2885.

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