Negative News & Compliance: Identifying Adverse Media Via Tech

Any financial services or fintech company should already know just how critical it is to identify negative news during a customer’s due diligence process. If news gets out that a client or customer was involved in a financial crime, then it’s important to be able to quickly assess the story and the client’s background and protect the business from any damage.

In our latest chat series, ‘Spilling the Tea with Compliance’, Payoneer’s Deputy Chief Compliance Officer, Micheal Sheehy sat down with industry experts Karla Worley, VP Business Development at RDC along with Hugo Veazey, Director of Anti-Financial Crimes at RDC to discuss negative news, also known as adverse media and how fintechs are adapting to identifying negative news via today’s advanced technologies.

What is Negative News Screening?

Negative news or adverse media is known as unfavorable information found across a variety of news sources in which a customer of a financial services institution has been involved in misconduct or a financial crime such as money laundering, fraud and terrorism financing. Negative news checks are typically part of a screening process for a financial institution’s client against news articles revealing their crime.

The screening typically begins from the very start of the business relationship and is part of the ongoing KYC regulations that all financial institutions must abide by. The purpose of these screenings is to mitigate any potential threats posed by criminals wanting to use the institution’s financial services, and to safeguard the institution’s reputation.

Identifying Negative News via Automation

With today’s advanced and digital technologies, KYC analysts and compliance officers have easy and quick access to tons of news articles, blogs, social media pages and more that can reveal data on a financial institution’s customer. In fact, artificial intelligence and automation has offered a huge breakthrough in capturing data on a customer’s news story and providing compliance officers with categorized alerts that’s important to them.

Whether it be money laundering, bribery, fraud, human trafficking or others, organizations like RDC and software tools are both helping financial institutions and fintechs to easily categorize the risk and capture the information quickly. Screening for negative news can also be set-up to run automatically at a specific time or date allowing more flexibility for compliance officers.