Adverse media screening (AMS), which is also called media monitoring or negative news screening, is basically the process of comparison or screening of a possible customer against the negative information or data sources in media. Adverse media screening (AMS) is an essential part of Customer Due Diligence (CDD) and therefore Know Your Customer (KYC) processes as it enables financial institutions to detect and prevent any potential issues prior to happening and avoid notorious consequences.
Adverse media screening (AMS) has a vital role in financial institutions’ fight against criminal activities such as money laundering. Acknowledging the effectiveness and importance of AMS, financial regulatory bodies have legalized media screening for negative data and also made it an essential regulatory requirement for processes of Know Your Customer (KYC), customer onboarding, Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD) especially for customers posing higher risks.
Adverse media screening (AMS) for financial institutions (FIs) includes exploring global media sources to search for a possible evidence of a customer’s relation with suspicious criminal activities which may refer to association with individuals involved in drug cartels, terrorist financing, human trafficking or other illegal attempts.
The Purpose of Adverse Media Screening (AMS)
Generating an accurate customer risk profile is the utmost purpose of adverse media screening (AMS); however, persistent media screening also serves to the financial institutions in protection from fines, penalties, losing customer reliability, negative press reflection or other possible risks and threats to the reputation of the institution.
Challenges with Adverse Media Screening (AMS)
- The huge amount of alerts and the time spent on checking them are a big burden on the employees as they may require long debates regarding the accuracy of these alerts.
- As political information incessantly spreads through traditional and digital media, news screening gets more challenging, making validity judgment of information even harder.
- On the regulatory side, the adverse media screening (AMS) is compulsory in many countries; however, in most cases, there is a lack of specification in defining which methods are the most effective ones to run a successful adverse media screening (AMS) process. The requirements are not direct.
Best Practices of Adverse Media Screening (AMS)
- Lay down the risk appetite plainly and operate a risk assessment accordingly
- Do the screening at the right time
- Perform media checks based on credible and up-to-date new sources
- Build an audit trail and continue regularly
- Make use of the right and efficient technology to release burden
- Create a powerful anti-financial crime culture in your institution
Regulatory authorities in the world are aware of the importance of adverse media screening (AMS) in fighting the financial crimes, therefore AMS checks is a legal requirement. But, in comparison to regulatory requirements for customer screening for sanctions and politically exposed persons (PEPs), the instructions and specifications about the screening against adverse media is less clear and structured which makes it open to interpretation. On the other side, the volume of adverse media screening guidance is rising around the globe as a response to illegal financial flows.
Artificial Intelligence (AI) in Adverse Media Screening (AMS)
As one of the challenges of adverse media screening (AMS) is the insufficiency of human interaction to scan through and analyze all the alerts, more and more financial institutions take the advantage of media-monitoring tools that use artificial intelligence (AI). The AI tools enable users to create search parameters, filters and dashboards while at the same time score media hits depending on the risk level of the media mention. The AI solutions of adverse media screening (AMS) provide a more detailed solutions while they help FIs to save time and money in the long term by creating an automated system for the important processes and regulatory requirements.