In a recent post by Moody’s Analytics, the company explained how firms can uncover hidden risks with adverse media screening.
Adverse media screening plays a critical role in your organization’s Anti-Money Laundering (AML) processes due to its ability to provide comprehensive insight into potential risks associated with a client or partner.
It involves the systematic monitoring of various media sources to identify negative news or information about individuals or entities. This is particularly relevant in AML efforts because such information can serve as an early warning sign of potential illicit activities.
By integrating adverse media screening into AML processes, you can enhance your due diligence efforts, better manage risk profiles, and ensure compliance with regulatory requirements.
Challenges in adverse media screening. One of the primary issues is the data – it must be trustworthy and manageable. You should screen against reliable, unbiased sources that represent global news, but such good coverage leads to a large volume of structured and unstructured data to be scanned. This vast amount of data can lead to both false positives and false negatives, making it difficult to accurately assess risk. Additionally, the constantly evolving nature of news and media, coupled with the global and multilingual scope of the internet, adds another layer of complexity.
Often, stories are reported without specific personal data like date of birth or address, which leads to potential ambiguity in identity verification. Additionally, variations in media reporting styles, sources, and privacy laws may result in a name being presented differently than how your organization collected it during the onboarding process.
Read the full post here.
Keep up with all the latest FinTech news here.
Copyright © 2024 FinTech Global
