Adverse media checks as a part-time solution to mitigate AML risks are not sufficient, given that customer’s risk ratings fluctuate over time. When it comes to high-risk customers, it is necessary to adopt adverse media ongoing monitoring in order to mitigate potential risks to the institution’s reputation.
By definition, adverse media is any negative news about a customer or business partner, especially in connection to financial crimes. Most adverse media sources include the internet, traditional media, and certain databases.
For adverse information monitoring to be effective it has to be constant and thorough, compliant with laws and sanctions that are constantly changing. Losing track of compliance laws can easily backfire: companies miss out on clients that became available to the market via the shift of regulations or still have business relationships with newly sanctioned entities. The last leading to million dollar fines or even prison sentences depending on a case.
Here is why businesses fail to comply:
This huge bulk of information searches cannot compete with automated approaches for negative news ongoing monitoring that notify institutions when there is something of interest. Companies need to monitor transactions in real-time, or as close to real-time as possible.
Ongoing adverse media monitoring is an essential part of AML checks giving businesses the advantage of checking clients against global databases in various languages, international PEPs and sanctions lists.