What is adverse media?
By
Ladanna James
Head of Marketing and Partnerships
Adverse media monitoring, also referred to as negative news screening, is any form of behavioural misconduct or less-than-favourable information on an individual or business that can be found across multiple online sources, including traditional news outlets and unstructured sources. All of this publicly available information is referred to as open-source intelligence (OSINT).
Given that there are billions of historical records already available online and millions more being added daily, there is no shortage of sources from which to find adverse news. Some of these data sources include government records and archives, blogs, tweets, comments, online forums. If that weren’t enough, the number of people consuming this information continues to grow exponentially. Currently, the internet reaches about 65 per cent of the world’s population.
Why is adverse media important?
Any organization concerned with safeguarding its brand and reputation now includes negative news screening as part of its due diligence and reputation risk management practices. Highly regulated institutions with fiduciary responsibilities are often required by regulators worldwide to include adverse media screening in their compliance frameworks. Failure to comply can result in hefty regulatory penalties. Adverse media monitoring is a form of insurance against potential and unexpected reputational damage.
When, where and how is adverse media monitoring used?
Negative news screening takes place whenever an organization is entering into a new business relationship and wants to vet the entity itself or the individuals behind the entities. It is often used in client acceptance or KYC processes, third-party screening, enhanced background checks or even as part of an insider risk program. Negative news screening should be part of a holistic vetting process, which includes traditional forms of background checks. Screening for adverse media is no longer a nice-to-do; it is a must-do. Some organizations use adverse media screening as the first step in their programs; others use it nearer to the end. It all depends on how an organization chooses to operationalize the process.
What constitutes misconduct?
Financial crimes, fraud and criminal behaviour are obvious forms of misconduct, and constitute some of the biggest concerns for financial institutions, in particular. However, culture fit; that is, the alignment of values, beliefs, and behaviors between an organization and its various stakeholders is arguably more important than ever. Behaviour that used to be tolerated is no longer acceptable. Attitudes around bias, harassment, discrimination and toxic work environments are evolving, and investors and the public alike are demanding more from organizations when it comes to their Environment, Social and Governance (ESG) practices.
An organization’s activities and their impact on the environment are now closely scrutinized and they’re increasingly being held accountable by regulators and the public for poor environmental stewardship.
How does adverse media monitoring work?
Some organizations are still doing manual online searches, employing teams of due diligence and compliance professionals to find information on hundreds, sometimes thousands of individuals and organizations. Because online information changes quickly and sources come from around the world, it is almost impossible for humans to do this manual work properly, especially with large volumes. Trying to manually harness OSINT is like trying to train a field of wild horses, all at once! The information on the internet moves too quickly, is all over the place, is often unstructured and is simply too much for individuals to wrangle.
How Valital uses OSINT technology
Valital’s AI-powered adverse media monitoring platform uses Natural Language Processing (NLP), a form of AI that enables computers to extract language from unstructured text. The AI learns human language and uses content and context to perform real-time search and pulse analyses of open-source intelligence, flagging misconducts related to universally recognized misbehaviours: discrimination, financial crime/fraud, harassment, violence and addiction.
The benefits of this automated approach are tangible and consequential: harmonized and consistent searches and results, real-time information updates, a centralized repository, time savings, to name a few. The most important, of course, is the increased confidence in knowing that the information being collected and analyzed will lead to better, more confident decision-making.