What are the Types of Adverse Media Categorisation?

Adverse media, leaning on the two words that contain the term, implies adverse and media. Adverse refers to a factor(s) and items that are harmful or unfavourable for a cause or intent. The media is associated with publishing, the internet, and broadcasting. It involves disseminating information to the public or the masses.

This article addresses Adverse Media, how it affects businesses and how it can be categorised. It begins with addressing just what Adverse media is.

What Is Adverse Media?

Adverse Media can be described as negative or damaging information about individuals, organisations or formal entities that have the tendency to be a risk to businesses or formal institutions. This information can be disseminated through the news, articles, social media posts, legal filings, and other public records that can serve as evidence of possible involvement in financial crimes, corruption, and illegal activities.

Since adverse media is so damaging for companies, companies must be proactive about effectively identifying, collecting, and analysing adverse media data is essential for managing reputational, legal and regulatory risks. Adverse media is crucial; this is because it can help identify potential risks and threats that are associated with individuals or entities.

For example, financial institutions can use adverse media solutions to screen clients and partners for potential money laundering or terrorist financing risks. Adverse media can also aid companies in gaining access to the reputation of their business partners or vendors and ensuring that they have not been associated with unethical or illegal activities.

What are the Categories Of Adverse Media?

There are several types of adverse media to take note of in order to ensure that companies are safe from risks, scrupulous customers or users;

1. Violence

Violence can involve clients directly or may be carried out on their behalf; it may generate crucial and several types of averse media, especially when it is involved in a criminal organised venture or intent. Violent crimes can also be associated with political and workforce conflicts and disputes or exacerbated patterns of human abuse.

2. Financial Crimes

Financial crime entails a large or wide range of activities which includes; money laundering, bribery, forgery, fraud, insider training etc. Financial crime is a very broad and complex criminal field and can be covered in both traditional as well as emerging media, e.g. social media.

3. Terrorism

Financing terrorism and other terror-related activities tends to generate significant adverse media across different media outlets. These types of terror-related media can include subtle to dominant encouragement, radicalisation, as well as the direct perpetration of terrorist acts.

4. Fraud

Fraud can be committed using a variety of mechanisms. Fraudulent letters are one of the ways it can also include; telephone calls, emails (spamming and phishing) and illegal or unprotected websites laced with malicious codes, bots and viruses. Fraud can either be a civil or criminal offence. Fraud has a lot of different end goals; it can involve illegal monetary gain or a gain of property, citizenship benefits and passing immigration protocols.

5. Cybercrime

Any criminal activity that involves the use of a computer or a networked device like a phone or a tablet is considered a cybercrime and can be filed as such with a law enforcement agency or reported as one. Cybercrime covers a cluster of illicit activities that are used to facilitate offences like; money laundering, identity fraud, etcetera.

6. Sexual Crimes

Sexual crime entails a wide range of activities, from violence, abuse and rape to distributing or possessing illegal imagery and videography. Sexual crimes also facilitate other illicit activities like money laundering and cybercrime.

7. Narcotics

This involves the use or sale of hard drugs as well as their production and trafficking. Narcotics offences and associated news are usually related to financial crimes, which include money laundering and terrorism financing.

8. Regulatory Misconduct

Regulatory misconduct can be a form of crime itself; it can also be known as non-compliance. It is an indication that clients are engaged in other types of criminal activity. The types of adverse media stories that are related to regulatory offences regularly cross over with financial crime.

9. Property

Adverse media stories involving properties can entail activities which include theft, arson, larceny, and burglary. Etc. It can constitute civil or criminal misconduct and vary largely in scope. Property crimes are usually reported across media outlets.

Why Different Adverse Media Types Are Important

Adverse media categorisation is a very beneficial KYC tool; the FATF recommendations require financial institutions to understand their client's reputations, including previous criminal liabilities such as involvement in money laundering investigations.

Compliance with that directive necessitates screening for all forms of negative media, which generally entails time-consuming manual inspections of enormous, unsorted volumes of news articles, blog posts, and social media posts.

Adverse media is any negative or potentially damaging information that can be found in public sources such as news articles, regulatory reports, legal filings, or social media. Different adverse media types are important because they can provide valuable information about potential risks or concerns related to individuals, businesses, or other entities.

Here are some reasons why different adverse media types are important:

1. Adverse Media Categorisation Can Reveal Potential Financial Crimes:

Adverse media can uncover information about individuals or businesses engaging in financial crimes such as fraud, money laundering, or corruption. That way, it can warn a company about dealing with a firm that can pose potential risks.

2. Adverse Media Categorisation Can Highlight Reputational Risks:

Adverse media can reveal information that could harm a company's or individual's reputation, such as unethical behaviour, legal violations, or negative public opinion.

3. Adverse Media Categorisation Can Help Identify Potential Compliance Risks:

Adverse media can provide information about companies or individuals that may be in violation of laws or regulations, which can help identify potential compliance risks.

4. They Can Assist With Due Diligence

Adverse media can be an important source of information for conducting due diligence on individuals or businesses prior to entering into a business relationship or investment.

5. They Can Support Risk Management Efforts

Adverse media can help organisations identify and assess potential risks related to their operations, customers, or partners, which can inform risk management strategies.

Different types of adverse media are important because they can provide valuable information about potential risks, compliance issues, and reputational concerns, which can inform decision-making and risk management efforts.

Bottom Line

Adverse media screening is a process that involves the use of technology and other tools to search for and analyse adverse media related to specific individuals or entities. Adverse media can be an important source of information for companies and organisations to identify and assess potential risks related to their operations, customers, or partners. Adverse media screening is often used as part of due diligence efforts for compliance and risk management purposes.

See how 100+ leading companies use Youverify for Adverse Media screening of customers for compliance and real-time risk detection. Request a free demo today.

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