Why Continuous Adverse Media Monitoring Beats Periodic Checks

Financial crime risks change by the hour, not the quarter. One‑time onboarding checks or periodic reviews miss fast‑moving stories that can materially change a customer’s risk exposure. Continuous adverse media monitoring closes this gap by scanning global sources in real-time and surfacing relevant events that should update a customer’s profile and the institution’s risk‑based response.

There’s a notable shift in the approach in the need for adverse media monitoring; financial institutions can no longer afford to simply conduct one-time onboarding checks. Instead, to stay compliant with modern regulatory standards, a strategy of continuous media monitoring is imperative to keep pace with the ever-changing financial landscape in which we currently operate.

What is Continuous Adverse Media Monitoring?

Adverse Media Monitoring refers to a monitoring/screening process that analyzes news, reports, and online mentions of an individual to gauge the potential risks associated with that person or entity.

For instance, if your customer is publicly named in a police investigation for large-scale fraud, and his involvement has attracted media attention, adverse media monitoring systems will flag this news source and alert your bank’s compliance team.

Depending on the severity of the situation, the compliance team assesses the risk and updates the customer’s risk profile.

Traditionally, however, this has been a reactive process. An individual’s adverse media was monitored once during onboarding and then, if triggered by specific events.

With news moving faster than ever, coupled with the dynamic nature of risk status, this is simply not enough.

Continuous Adverse Media Monitoring, on the other hand, adopts a more proactive approach to the matter. The continuous nature of adverse media monitoring enables the screening solution to not only assess risk during onboarding, but also actively track any changes in the customer’s risk profile, in real-time, 24/7, 365 days a year. The constant input of relevant information through real-time adverse media monitoring enables financial institutions to update customer risk profiles, in real time, constantly.

Now, if your customer is publicly named in a police investigation for a large-scale fraud but later cleared of suspicion, continuous adverse media monitoring will enable compliance teams to update the customer’s risk profile in real-time, ensuring that the customer’s risk profile accurately reflects their status.

Consequently, timely updates to risk profiles enable compliance teams to adopt effective mitigation strategies, thereby reducing regulatory compliance failures, reputational damage, and financial penalties.

Why is continuous adverse media monitoring necessary?

1. The Dynamic Nature of Risk:

In the financial sphere, risk is not a static notion. Money launderers, fraudsters, and terrorist financiers are constantly evolving their strategies to succeed in their goals without intervention from the relevant policing authorities. A customer who appears to be low-risk at the time of onboarding could later become the subject of a high-risk news story a few days later. Without continuous adverse media monitoring, an institution will fail to promptly flag emerging risks associated with such clients.

Continuous adverse media monitoring is just that. It’s continuous. It adapts to the dynamic nature of risk in the financial landscape and identifies real-time variations in risk, sudden changes in a customer’s political exposure, new accusations of fraud, or a sudden involvement in any form of criminal offense.

Additionally, continuous adverse media monitoring can also aid institutions in detecting clients linked to predicate offences. The Financial Action Task Force (FATF) identifies certain predicate offences – the underlying crimes such as fraud, corruption, and drug trafficking – the illicit funds of which are then laundered.

By monitoring various news sources in real-time, continuous adverse media monitoring identifies clients who may be involved in predicate offences – allowing compliance agents to update risk profiles immediately and adopt proactive risk mitigation strategies.

Simply put, this proactive strategy towards adverse media monitoring helps financial institutions identify and manage risks as they arise, making sure that financial institutions are always a step ahead.

2. Regulatory Expectations and Industry Demands:

Regulatory frameworks around the world prescribe monitoring of not just transactions, but also ongoing risks posed by clients. For instance, the European Union’s 5th AML Directive mandates that financial institutions conduct ongoing monitoring of Politically Exposed Persons (PEPs) and regularly update any variations in risk levels.

Similarly, the United States Financial Crimes Enforcement Network’s (FinCEN) Customer Due Diligence (CDD) Final Rule outlines four core requirements for financial institutions to follow. One of these core requirements is to

“Conduct ongoing monitoring to identify and report suspicious transactions and, on a risk basis, to maintain and update customer information.”In the same realm, even international policy-making bodies like the FATF emphasize the importance of maintaining ongoing customer due diligence throughout the course of the relationship between the financial institution and the customer.

According to FATF Recommendations, Financial Institutions should take CDD measures that include conducting ongoing due diligence on the business relationship and scrutiny of transactions undertaken throughout the course of that relationship to ensure that the transactions being conducted are consistent with the institution’s knowledge of the customer, their business, and risk profile, including, where necessary, the source of funds.

FATF Recommendation 10(d) Customer Due Diligence.

With increasingly stringent regulations surrounding AML compliance, institutions that fail to continuously track their clients face the risk of penalties, fines, and even reputational damage.

In line with the mandates of national regulators and international policymakers, continuous adverse media monitoring provides the exact kind of system financial institutions need to remain compliant with AML laws.

What are the Best Practices for Implementing Continuous Monitoring

For financial institutions looking to implement in a continuous adverse media monitoring solution, here are some good practices:

1. Investing in technology for real-time global adverse monitoring:

Acquiring AI-driven platforms that can process and analyze multitudes of information from global news sources to assess risk through  real-time alerts from adverse media screening.

2. Set up Clear Risk Parameters:

Define the threshold of what constitutes high-risk adverse media according to your institution’s risk exposure, and tailor the duration, frequency and notification type to your specific needs.

3. Integrate Continuous Media Monitoring with Broader Compliance Strategies: 

Integrating continuous media monitoring alerts with a broader risk-based approach towards AML compliance that includes transaction monitoring, sanctions screening, and global watchlists screening.

4. Implementing advanced media monitoring techniques:

For effective AML compliance, it is not enough to simply monitor media. Adverse media monitoring solutions should also rely on advanced screening techniques. For instance, entity extraction in adverse media allows the monitoring system to  identify the people or entities named in the news.

Similarly, event extraction in adverse media monitoring identifies the context in which the individual/entity is involved.

A holistic, unified approach to risk-based assessment will enable financial institutions to take a proactive approach towards risk management and decision-making.

How to Reduce Noise and Stay Current with AML Watcher’s Continuous Adverse Media Monitoring

Today, financial institutions struggle with high false positives that increase costs and delay decisions. They require something that legacy AML solution providers fail to provide. Relying on traditional, one-time adverse media checks is no longer feasible with regulators and policy makers pushing for continuous monitoring.

You don’t have to wait for risk to knock – spot it first with AML Watcher.

Legacy AML screening solutions leave your institution exposed. The dynamic nature of risk simply does not fit into the practice of one-time adverse media screening at the time of onboarding. Adapting to the nature of ever-changing risk status, AML Watcher changes the game by providing continuous adverse media monitoring, equipping your institution with the necessary tools to update customer risk profiles in real time and providing you with actionable intelligence before risks escalate.

Further, an individual who is a PEP or from a high-risk jurisdiction does signal potential AML risk. However, only through effective adverse media monitoring reveals the actual potential connection of the customer with predicate offences. AML Watcher uncovers actual links to such predicate offences, turning perceived risk into verified, actionable insights for your compliance team.

Our automated continuous adverse media screening guarantees that your business stays proactive in its risk assessment. With AML Watcher’s continuous adverse media monitoring allows you to Utilize our cutting-edge AI- powered adverse media monitoring system to provide real-time news analysis, sentiment detection, and comprehensive risk assessments.

• Take advantage of our multilingual adverse media monitoring solution. Monitor news sources from across multiple languages, continuously refine your customer link profiles, and ensure your compliance efforts remain in line with the latest regulatory requirements.
• We automatically flag any new risks tied to your clients in real-time, without the need for manual intervention. This means you can react quickly to changes in your clients’ risk profiles.
• Utilize state of art entity extraction and event extraction techniques that derive identities of individuals and the context in which the news is being reported in.
• API and integration options to connect with sanctions and PEP screening, KYC/CDD systems, and transaction monitoring
• With AML Watcher, you can also utilize custom source links. Integrate local or specialized news outliers, regulatory updates or industry reports to capture the media coverage that matters the most to your institution.

The importance of continuous adverse media monitoring in the fight against financial crime cannot be understated. Through a proactive strategy towards adverse media monitoring, financial institutions can be more efficient in identifying and mitigating emerging risks.