Donor due diligence:
5 simple steps to adverse media checks
Organisations across all sectors today need to be aware of two facts:
1. The amount of publicly available online data is constantly increasing at rapid speed.
2. Their due diligence has to be capable of taking this data in account to be truly efficient.
The latter is easier said than done, but due diligence that cannot keep apace with the ever-changing information landscape will always be incomplete. This leaves organisations open to serious reputational and financial risks. It’s critical for due diligence processes to reliably scour through and draw insights from publicly available data sources such as blogs, grey literature, and adverse media.
Adverse media checks are typically the first step in a comprehensive due diligence process, and for good reason. It’s the easiest search to conduct and is the fastest way to get an overall idea of a subject’s reputation, so that you can immediately identify risks and gateways for growth.
While adverse media is important to keep track of, the information space is oversaturated with media sources. It’s easy to miss key insights, or even derive completely incorrect ones due to illegitimate sources. Both scenarios could spell damage for an organisation.
Despite these pitfalls, adverse media remains important to the due diligence process. The dilemma is figuring out how to filter out the information that is accurate and relevant, while efficiently incorporating them into due diligence strategies. To help you out, we’ve outlined the five best steps to take to make adverse media screening simple.
Suggested reading: Reputational due diligence and how to conduct it has permanently shifted — read our blog Reputational Due Diligence to find out how.
Step 1. Expand your range of sources
The first step in conducting an adverse media check is by starting with a wide scope. This proves especially beneficial in taking organisations beyond a risk-based approach to one that is also focused on growth.
While adverse media checks are synonymous to negative news screenings, it’s also important to look out for neutral or even positive media to build up your understanding of a subject. But, while being able to scour through a never-ending array of online data sources is crucial, the process is like finding a needle in a haystack that’s always growing.
Using a search engine is ultimately an ineffective way of researching a wide range of sources. As search engines prioritise high SEO and SERP reach, any results received from looking up a subject are not guaranteed to be sorted by relevance or usefulness to your due diligence. Adverse media checks are difficult when you can’t even isolate what you need. Next, there is the problem of finding and analysing sources in different languages. Multilingual media sources are especially crucial when you are researching international subjects, but name matching across foreign languages is a significant barrier to accessing the necessary information.
Automated due diligence platforms can solve these problems. They can easily take into account all relevant available online data and weed out what is not relevant. However, the language issue can be more difficult for some platforms. A digital solution like Xapien solves the problem with a function that scans multilingual sources and translates the results.
- There is a massive (and growing) range of publicly available data sources online that must be incorporated into due diligence research.
- Automated due diligence platforms effectively curb the many difficulties that arise in trying to assess and analyse these sources.
Step 2. Verify sources
As you perform adverse media checks, you might find that some information should be disregarded in your checks entirely. Online information can sometimes be hidden or even deliberately false/misleading. But it is very easy to mistake online data as true when it isn’t. As more and more diverse data sources are incorporated into due diligence, it is critical to make sure the information is verified. The consequences of not doing so in this age of increased visibility can be disastrous.
So, we are faced with large volumes of data and no guarantee that they are all verifiable. A manual process is ineffective in being able to solve these issues, and perform research and analysis in a timely fashion. The result is adverse media checks and due diligence that take an unproductive amount of time, and prevent efficient, quick, and accurate decision-making.
AI and automation solutions come into play here with their ability to process data sources and verify legitimate media sources. Due diligence tools are capable of scanning millions of sources extremely quickly and can use machine learning to constantly evolve their capabilities.
- Verification of data sources has always been a core part of due diligence but it has become even more critical in today’s age of increased visibility.
- Intelligent platforms can verify what online sources are false and/or inaccurate so that they can be disregarded in adverse media checks.
Step 3. Eliminate false positives
Verifying data sources is a critical yet arduous task for adverse media searches. Eliminating false positives, on the other hand, is about verifying the actual granular data itself.
A good example is when two different subjects are confused because they have the same name. Is the Jane Doe in this article the same Jane Doe you are researching? Mixing up two subjects like this can easily happen but have lasting negative effects on your organisation’s work and reputation.
A manual approach is not best suited to this information environment. Humans cannot realistically comb through millions of sources and verify them at each step of the process. And certainly not in the kind of fast time frame that would make the information useful for due diligence or relationship building.
Automated due diligence platforms can handle this immense workload. For instance, Xapien uses Natural Language Processing (NLP) to sift through sources quickly, efficiently, and accurately. Xapien can derive critical insights from otherwise confusing information using simple points of context provided by the user, such as a subject’s name and professional title.
- Adverse media sources are so numerous that mistakes are easy to make. The painstaking work of disambiguation is needed to eliminate false positives.
- An automated due diligence platform that employs NLP can be a game changer here.
Step 4. Feed back your findings
Reporting on due diligence work is the stage where the research and analysis output gets fed into the decision-making process. Yet it can be tough to work out how to do this in the best, most efficient way. All that information from all those sources needs to be both distilled down and presented in a “decision useful” way. Teams have to think about report formats, whether or not to include visuals, how the reports are shared to relevant team members, to name only a few of the issues.
Organisations may already have a reporting system and format in place if they consistently undertake due diligence research. If not, reports may be presented in an ad hoc fashion, which can negatively impact how the information is digested and received. Moreover, the time spent formatting and arranging reports can build up and take time away from the more important tasks of analysing and decision making.
Automated due diligence platforms feature tools that allow you to present collated information in shareable reports with standard formats. Once your team is familiar with the format, the information is easily digestible, every time. Automated platforms often categorise their insights, making it simple for users to quickly analyse a range of information from other sources beyond adverse media, at the same time.
- The insights derived from your adverse media research needs to be simplified enough to be shareable and useful within efficient workflows.
- Automated due diligence reports are often categorised and organised effectively. This allows for adverse media insights to be shared simultaneously with results from other categories of information.
Step 5. Keep your checks going
News sources constantly update themselves and adverse media checks must do the same. Due diligence in the world of ever expanding new information needs to be a constant process. Organisations need to build a due diligence pipeline that:
- Encompasses all of the above steps
- Carries them out at an efficient rate while maintaining a high quality of detail
- Can be repeated ad infinitum
This allows the organisation to gain an evolving understanding of a subject that builds over time.
Automated platforms are the only real and cost-effective way of fulfilling these requirements. Their ability to process and report on vast amounts of adverse media at a fast rate is critical here. Partnering with an automated tool allows you to handle and keep up with the fast-paced information environment.
- Adverse media sources are constantly expanding, so due diligence adverse media checks must follow suit.
- Automated platforms enable due diligence reports that can be built on top of each other, further cementing an organisation’s understanding of a subject.
Suggested reading: Get more insights into the benefits of automated due diligence with our explainer 5 Reasons Automated Due Diligence is the Future.
Seize control of all due diligence checks with Xapien
Adverse media is a critical resource for comprehensive due diligence. The rate that publicly available online data is growing presents a challenge for organisations aiming to keep ahead. Organisations must remain vigilant despite this large, growing challenge and turn to new approaches to optimise adverse media checks as well as general due diligence. An automated platform is the only realistic way to handle this new environment.
Xapien offers a single, catch-all service that saves you time and money by optimising your procedures. Our tool is simple to use and can quickly scour millions of publicly available data sources with just a few provided terms of context. Xapien gives you standardised, digestible reports while seamlessly cross-referencing and disambiguating between different data sources.
If you want to see Xapien’s powerful tools in action, click here now for your free demo.
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