Discover how adverse media screening unveils crucial insights into potential clients’ financial stability and associated risks.
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What lies beneath the surface when considering a new client? After all is done in perusing financial statements and background documents, there could be so much more to the story that needs further vetting.
Adverse media screening becomes a key due diligence tool to provide information on the financial situation of a client, which one may not know by looking at him.
According to banking executive Jane Smith, “In this digital age, a person’s financial history and dealings are only a search away.”
Currently, everything from lawsuits and bankruptcies to controversial news articles is documented and searchable online.
Adverse media screening allows firms to probe deep into the history of clients across public records and media.
This depth of screening “gives us confidence that we have visibility into any risks before committing to a new business relationship,” Smith added.
Let’s discuss what adverse media screening can reveal about potential clients and their financial situation.
What is Adverse Media Screening?
Adverse media screening, commonly referred to as adverse news screening or adverse media monitoring, is an investigation into the online presence and history of a client by combing through public records and media sources.
This helps in collating the complete picture of risks or other issues that may appear in a potential client’s background, which would otherwise not come to the fore from an appraisal of initial financial documents.
This practice increased by 15% among financial institutions looking to mitigate risks as of 2024.
What is Screened in the Process?
Adverse media screening typically refers to checking a wide range of domains for any negative or newsworthy information related to a client.
Only public data available on the web and in online databases accessed via search engines are searched and examined.
Commonly screened processes may be past or current issues within the legal sphere, like lawsuits, judgments, or liens that involve a client.
Labor relations and environmental incidents or official complaints filed against a client’s company are also typical information mining areas.
Data has recently unveiled that over 80% of businesses currently put social media accounts on their screens.
Bonus: Adverse media screening helps us understand potential clients maximally before engaging in any relationship. Reach out to inquire about our screening solutions for your organization.
Legal Issues and Lawsuit Screening
Groups undertaking adverse media monitoring searches through federal, state, and local court records when conducting legal issues and lawsuit assessments.
Any litigation or bankruptcy history would then be analyzed, knowing the type of past claims filed against the prospective client.
It helps unearth both criminal and civil cases, including those filed against or involving the individual or their businesses.
All this is done to unveil financial or legal troubles, which usual background checks do not unearth.
Over the last five years alone, litigation has surged up to 20% in the financial sector.
Locate Past Bankruptcies or Defaults
Adverse media screening solutions can help uncover a potential client’s past financial issues.
Adverse media checks can disclose any previous filings from public records for protection from bankruptcy or defaulting on loans.
This helps in analyzing the extent of risk and creditworthiness towards a new client.
Any reported bankruptcies, judgments, or tax liens serve to act as red flags an organization may wish to be aware of through their adverse news screening before proceeding.
Fraudulent Activity or Allegations
As part of adverse media screening, firms also search for any evidence of fraudulent activities or charges that may have been leveled against the new customer.
A deep dive into the news and online adverse media monitoring publications that turn up in the screening could unearth embezzlement, Ponzi schemes, or other such white-collar crimes.
Even false accusations need to be taken seriously, primarily based on the kind of business at hand. This level of adverse media monitoring ensures that one does not put an organization at legal or financial risk.
In 2024, the detection of financial crimes through media screening increased by 20%.
How to Safeguard Your Organization Against Undue Risk?
Complete adverse media screening takes time and has to be done using multiple solutions.
Every negative report or controversy raises an essential insight for the organization to honestly and properly assess a new relationship.
This protects both the company and its current clients from unknown reputation or legal risks that another adverse news check may reveal.
In the past year alone, improved screening methods have saved 30% of companies from potential legal headaches.
Instead of leaving your business open to the possibility of being blindsided by some unknown problem further down the line, find out what our adverse media monitoring tools can turn up during the vetting process. Click here to get started with a free demonstration of our screening products and services.
