5 important steps to adverse media screening

Adverse media checks are often done first in the due diligence process and for good reason—they provide insight into a subject’s background, identifying both risks and opportunities. Failing to capture negative media exposes organisations to significant reputational and regulatory risks.

The challenge is how saturated the online landscape has become with different news sources. It’s easy to miss key insights or 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 important steps to take to make adverse media screening effective.

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 

Effective due diligence adopts a broader lens approach. This proves especially beneficial in taking organisations beyond a risk-based approach to one that’s also focused on growth. While adverse media checks are synonymous with negative news screenings, it’s also important to look out for positive media to build up your understanding of a subject and identify opportunities. 

Using a search engine is ineffective for researching a wide range of sources. Since 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 isolate what you need. 

There’s also the problem of finding and analysing sources in different languages. Multilingual media sources are especially crucial when you’re researching international subjects, but name matching across foreign languages is a significant barrier to accessing the necessary information.

AI-powered due diligence platforms can solve these problems. They can easily digest all relevant online information and weed out what isn’t about your subject. That being said, the language issue can be more difficult for some platforms. That’s why you need a purpose-built solution like Xapien which has been trained to understand cultural naming customs. 

Key Takeaways:

• 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. 

Key Takeaways:

• 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.​

Key Takeaways:

• 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. Report writing

This is the stage where the research and analysis gets summarised into a document and fed into the decision-making process. All that information from all those sources needs to be both distilled down and presented in an “actionable” way. Teams have to think about report formats, whether or not to include visuals, and how the reports are shared with 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 task of formulating next steps.

Automated due diligence platforms enable you to present collated information in shareable reports with uniform 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. 

Key Takeaways:

• 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. Don’t stop monitoring

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

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.

Key Takeaways:

• 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.

Compliant adverse media checks with Xapien

Adverse media screening is a critical part of doing your 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.

FAQs

Q: Why are adverse media checks important for due diligence?

A: Adverse media checks provide insight into a subject’s background, identifying both risks and opportunities. While databases and corporate registers might tick off a yes-or-no answer, they only scratch the surface. News media, on the other hand, can provide detailed insight into a subject’s background and network. It can uncover any connections to fraud, money laundering, tax evasion, terrorism, or other financial crimes, affecting the subject’s overall risk profile. 

Q: Why are organisations prioritising adverse media screening in 2024?

A: Taking a risk-based approach to Anti-Money Laundering (AML) compliance, which the regulator expects, includes screening for adverse news. Traditional screening tools weren’t designed for the 24/7 news cycle, so they struggle to keep pace with fast releases about a subject. Furthermore, old-fashioned risk typologies like AML are no longer the only risks, and database checks won’t provide the answer. This requires real-time research and the right technology to facilitate that.

Q: What sources should be checked for due diligence?

A: Effective due diligence involves thoroughly examining all publicly available sources, including blogs, grey literature, news articles, and other media outlets. However, taking a manual approach is not the most efficient. We explain why search engines aren’t good AMS tools and what to use instead here.

Q: How can due diligence processes be optimised?

A: Five important steps constitute an optimised due diligence process as we’ve covered above:

1. Look under every stone
2. Verify your sources
3. Eliminate false positives
4. Feed back your findings
5. Keep your checks going

Q: Why should I use Xapien for adverse media screening?

A: Xapien takes a different approach. Rather than replacing the painstaking manual searching process with database searches or keyword scanners, Xapien has a collection of AI models working together under the hood to replicate the human process. Just at an incomparable scale and speed.

Our system runs searches on thousands of risk words, on various search engines, and then scours the depth and breadth of the internet. The system doesn’t just scan the texts it finds for risk words, it actually ‘reads’ them like a human, extracting any potential risk.

Xapien reports combine open-source media screening with corporate records and PEPs, sanctions and watchlist screening. This report gives you the full picture of your person, in just a few minutes.