What’s the difference between adverse media screening and adverse media monitoring?

Adverse media screening involves checking a person or entity for adverse news before being onboarded. In contrast, adverse monitoring refers to the ongoing media checks on third parties after onboarding, continuously tracking new developments. Both processes are crucial for managing risk and ensuring compliance throughout the lifecycle of a business relationship.

What are examples of adverse media?

The definition of adverse media can vary depending on the organization and the potential impact of a threat. Common risk signals organizations should be aware of include:

Operational Risk.

When third-party vendors or service providers cause disruption or inefficiency issues, we call this operational risk. A news article about a significant data breach compromising a company’s systems and operations could indicate this. 

Compliance Risk.

Non-compliance with laws, regulations, or industry standards due to third-party actions indicates compliance risk.  An article indicating regulatory violations or non-compliance with industry standards could signal this risk. 

Reputational Risk.

Damage to an organization’s reputation due to third-party misconduct or adverse events. A significant data breach compromising customer privacy is a typical example.

Information Security Risk.

Data breaches, unauthorized access, or loss of sensitive information due to inadequate security measures indicate information security risks. News of a successful cyber-attack resulting in a data breach could indicate this risk.

Financial Risk.

These are losses, fraud, or improper financial practices resulting from third-party actions or instability. An example of adverse media signaling financial risk is an article about a significant decline in a company’s financial performance, such as a sharp drop in revenue.

Supply Chain Risk.

When disruptions, quality issues, or unethical practices originate from third-party suppliers, we call this supply chain risk. A news report about a supply chain disruption due to a natural disaster or a major supplier’s financial trouble illustrates this risk.

Legal Risk.

Legal risk occurs when legal disputes, litigation, or regulatory actions arise from third-party activities. A lawsuit or regulatory investigation intercompany could be an example of legal risk.

How can technology help organizations monitor for adverse media?

Organizations can harness technological advancements like AI-driven tools and Natural Language Processing (NLP). These technologies facilitate the analysis of vast amounts of global data, enabling companies to proactively identify and mitigate potential risks in near real-time.