Adverse media screening has become an essential part of a company’s risk management process, both while onboarding third parties and customers and throughout the relationship. In recent years, technological developments have made screening even more effective and efficient at surfacing risks. In this blog, we look at four of the benefits of using technology platforms such as LexisNexis for your negative news screening.
Companies are expected to search for adverse media mentions of prospective third parties or customers before entering a business relationship. In fact, this is increasingly becoming an expectation from regulators in order for the firm to comply with regulations around anti-bribery and corruption and financial crime. Adverse media screening is also vital for companies seeking meet human rights and environmental due diligence requirements in the EU’s forthcoming Corporate Sustainability Due Diligence Directive and similar regulations which are currently being proposed in other jurisdictions.
Yet significant challenges stand in the way of companies’ attempts to carry out adverse media screening effectively. A first step in overcoming them is to acquire reliable and accurate data, but this would still require enormous amounts of time to manually search through newspapers for relevant mentions. Instead, technological solutions can streamline the process by automatically screening third parties against all relevant media sources, as well as picking out keywords and topics with accurate identification of negative sentiment.
Here are four advantages of technology which could transform the results of your screening:
1. Relevance
Large companies can receive hundreds of thousands of mentions in the world’s media each month, and even more if their trading names have other meanings. For example, news results for the US tech behemoth Apple or the French telecommunications corporation Orange are likely to be mixed in with articles about fruit!
But technology solutions allow companies to upload names of entities and receive only the most relevant, filtered results based on the right keywords and context. This limits the number of false positive results, and delivers more relevant articles in several ways:
- Some technology providers use AI-powered Natural Language Processing and sophisticated
entity resolution to improve the accuracy of results. - Machine learning algorithms fuelled by large datasets of positive and negative news articles are used to classify and filter out irrelevant results more accurately.
- Sentiment analysis can parse the text of articles to ensure companies only receive mentions that are negative and therefore pose a risk to the firm.
- Fuzzy matching can help to improve the precision of results and ensure they are relevant to the target entity or individual.
2. Efficiency
A busy compliance officer or CEO needs to capture the breadth of adverse media risks their company faces. But because they are so busy, they understandably want to read as few articles as possible. Without technology, staff would have to manually sift through millions of pieces in individual news outlets for negative mentions of that company. Technology solutions can tailor and narrow adverse media results, thereby freeing up significant amounts of time for staff to focus on other tasks.
3. Speed
When a negative news article appears, the digitization of media and social media means it can be rapidly replicated in thousands of places across the internet. It is therefore important that companies notice adverse mentions as soon as they are published. This is also becoming a regulatory expectation because many anti-bribery and corruption laws require companies to monitor their activities and those of their third parties continuously. Adverse media screening technology platforms are important because they can flag a relevant negative article (often through an RSS feed) in near-real time, allowing companies to take action to mitigate the risk.
4. Data integration
Adverse media screening is a core part of many companies’ risk-based due diligence processes. As a result, this data is most useful to compliance teams if they can seamlessly integrate it into their own systems. Data can be structured or unstructured and delivered directly via an API. It can be enriched with complete metadata which provides greater flexibility for a firm to tailor the results to their own risk-based approach. The best technology platforms can even bring together media data with other risk-critical data sources in one place. For example, LexisNexis allows companies to search for entities and assess their combined risk across news data, company data, legal data, sanctions and watch lists, PEP data, ESG information, and more.
Upgrade your adverse media screening with LexisNexis
LexisNexis brings together more than 20,000 premium, regional and local news sources from all over the world–which capture over 100 languages–to help contribute to a truly robust adverse media screening process. This also draws on our archive of 40+ years of comprehensive media data.
But the most powerful data universe is only as useful as the technology behind it. Technology has transformed the potential of adverse media screening in many of the ways we have explored in this blog. It allows for faster, more comprehensive screening which can offer even greater levels of protection.
Contact us today to explore how adverse media screening can help your company to transform your approach to risk management, and surface new opportunities.
Looking for more tips on how to implement adverse media screening as part of an effective due diligence process? Our E-Book, ‘The Age of the Reputation Economy’, explains why adverse media screening has become essential for companies seeking to manage risks and exploit opportunities. Download it for free today:https://lexisnexis.widen.net/s/jcwkqkdfs6/seg-gns-ebook-adverse-media-reputation-economy
Disclaimer: The data, information and analytics LexisNexis® provides is for information purposes only and does not constitute advice or recommendation. Users are responsible for interpreting the data, information and analytics, and for the decisions and actions that they may take thereafter.