Best practice fraud prevention requires adverse media checks (Guest blog by Melissa)
Undertaking a best practice approach to fraud prevention and sanctions screening is more important than ever at a time of growing online fraud, and increase in sanctions against not only those in positions in power in Russia, but in countries such as Iran and Myanmar.
While sanctions lists must be used by all, many organisations are also using politically exposed person (PEP) and relatives & close associates (RCAs) data as part of a more comprehensive sanctions screening process.
PEPs are those who have been entrusted with a prominent public function, and are usually senior politicians, civil servants or members of the judiciary. Whereas RCAs can be spouses, partners, children, parents, cousins, uncles, aunts and close friends of the PEP – people who may be vulnerable to bribery, blackmail and corruption due to their relationship with someone in a position of authority and influence.
However, it’s important for those serious about undertaking effective due diligence when it comes to sanctions and PEP screening, and wider fraud prevention activities, that they also deliver adverse media checks.
What is adverse media and why screen for it?
Adverse media is defined as any type of negative publicity about a potential or existing customer from a variety of media channels.
Automated adverse media screening enables organisations to keep up to date on the latest news and alerts, in real-time, on any arrests, court cases or convictions, for example, against users of their services. These may be PEPs and RCAs, along with others who could have possible negative regulatory, financial, or reputational consequences to their organisation.
This way potentially costly fraudulent activity, which is on the rise, and the brand damage from being associated with an individual arrested or convicted of a crime, and a business accused of wrongdoing, is avoided.
Checking for negative news on an individual or business, even if they may not appear on any international watchlist, is vital to obtain the most accurate risk profile of those using your services. Additionally, such an approach supports best practice due diligence for know your customer (KYC), know your business (KYB) – possible suppliers and partners – and anti-money laundering (AML).
Global media reach crucial
It is important that the technology used to undertake adverse media checks scans the credible global news media for maximum reach, such as newspapers, magazines, TV, social media, radio, and press releases, in real-time. This way signs of money laundering, financial fraud, drug trafficking, financial threats or organised crime, terrorism, cybercrime, violent or sexual crimes, and appearances on past or present sanctions lists worldwide, can be identified and acted on.
What if negative news?
When there is negative news against customers they should be ranked as high risk, with further due diligence required, which may lead to the termination of the relationship. Also, adverse media checks shouldn’t just be used to monitor existing customers, but for best practice due diligence at the user onboarding stage.
Full service SaaS eIDV platform
Adverse media checks play an integral role as part of a wider identity verification process. For best practice sanctions screening and fraud prevention organisations should access a software-as-a-service (SaaS) electronic identity verification (eIDV) tool. These are able to deliver a full ID verification offering that combines global sanctions data with PEP, RCA data and adverse media checks. Furthermore, being SaaS, this scalable easy to deploy platform has the ability to support cross-checks against an individual’s contact data in real-time as they complete an online application process or checkout, while ensuring the user experience isn’t compromised. It does this by matching the name, address, date of birth, email, or phone number against reputable global streams, such as government agency, credit agency and utility records, along with mortality screening, to effectively confirm the ID of an individual. Additionally, the service should highlight any inaccuracies in the data, such as a typo in the address, which can be easily corrected.
SaaS tools are set to revolutionise how ID verification and sanctions checks take place. The speed, flexibility, accessibility, efficiencies and cost benefits provided by SaaS are game changing. Businesses can plug in and benefit immediately.
Technology that delivers automated adverse media checks is essential to prevent costly fraud and protect brand reputation, by delivering best practice due diligence, as part of any sanctions screening, wider ID verification and counter fraud efforts. The best solution is to source an easy to use SaaS eIDV platform that offers adverse media checks as part of a fully integrated sanctions and counter fraud service.
This guest blog was written by Barley Laing, UK Managing Director at Melissa. To learn more about Melissa, please visit their LinkedIN and Twitter page.
Authors
Barley Laing
Barley Laing joined Melissa and set up the UK office in 2014 during an exciting expansion phase of the California headquartered company.