What Is Adverse Media? Types & Sources

Businesses build AML/CFT risk profiles for customers or entities as part of their onboarding. While identity verification confirms who a person/ entity is, adverse media provides additional context by publicly available background information.

Adverse media refers to negative publicly available information about individuals, businesses or beneficial owners that may be relevant to a customer due diligence or financial crime risk assessment.

Not every negative news found online should be considered adverse media. Information used during a review should come from reliable and credible sources such as established news publications, regulatory announcements, court records or other verified sources. Unverified claims should not be treated as a confirmed risk indicator.

The European Banking Authority (EBA) highlights the importance of considering reliable external information when assessing customer and beneficial owner risk.

Common Categories of Adverse Media

There is no single regulatory classification that defines adverse media categories. Adverse media may cover information related to areas such as:

Area	What it includes
Financial crime	Information mentioning individuals or organizations in fraud investigations, money laundering allegations, bribery cases, corruption inquiries or financial scams.
Regulatory actions	Regulator findings, enforcement actions, licence restrictions, compliance breaches or investigations by supervisory authorities.
Criminal activity	Criminal charges, prosecutions, convictions or reports involving organized criminal activity.
Terrorism-related concerns	Publicly available information involving terrorism allegations, terrorist financing concerns or links to restricted organizations.
Financial misconduct	Information related to insider trading, market manipulation, securities violations or investment-related misconduct.
Cyber-related offences	Information involving cyber fraud, data breaches or misuse of technology for illegal activity.

Stages of Adverse Media

The category of adverse media and the stage of the matter should be considered separately. A serious concern such as fraud, corruption or terrorism-related activity, may appear at the allegation stage, during an investigation or after a confirmed finding. The category explains what the information relates to while the stage shows how far the matter has progressed.

Not all negative information has the same relevance for AML risk assessment. For example, unrelated personal disputes or general reputational issues may not provide meaningful information about the financial crime risk. However, information related to FATF-recognized predicate offences such as fraud, corruption or terrorism financing may carry greater importance when assessing customer risk profile.

Stage	What It Means
Allegation	Information has been published about a possible concern involving an individual or organization. The matter may relate to fraud, corruption, terrorism-related concerns or other misconduct but no formal finding has been made.
Investigation	A regulator, law enforcement body or another relevant authority is reviewing the matter. The outcome has not yet been confirmed.
Legal Proceedings	Formal charges have been brought or the matter has entered a legal process where the allegations are being considered.
Confirmed Finding	A court, regulator or authorized body has reached a formal decision such as a conviction, enforcement action or confirmed breach.

Sources Used for Adverse Media

Adverse media may use information from different publicly available sources, including:

News publications
Regulatory announcements
Government records
Court records
Industry publications
Other open-source information

The reliability of the source matters when reviewing adverse media. Information from regulators, courts or established publications may generally provide stronger context than information from unverified sources.

Use of Adverse Media in KYC and AML Reviews

Adverse media can provide additional background information during customer due diligence.

For example, public information about a regulatory investigation involving a company or its beneficial owner may provide additional context when reviewing a customer relationship. Businesses should assess whether the information is relevant, credible and connected to the customer.

Adverse Media and Negative News

Adverse media and negative news are commonly used interchangeably in AML compliance program contexts. Both refer to publicly available negative information used to assess a customer’s risk profile.