Blog > How Positive News Screening Can Help Banks Identify New Opportunities

28th June 2024

How Positive News Screening Can Help Banks Identify New Opportunities

Good news is usually good for business, but in a crowded media landscape, many banks and financial institutions miss potentially high-value news stories about their clients or prospects, even when they’re looking for them. These types of positive news stories can represent potentially valuable business opportunities, which is why it makes sense to have a means of identifying them as they emerge – in the same way that a firm screens for negative news to protect against compliance risk.

In this context, freed from a regulation-mandated classification as ‘adverse’ or ‘negative’ news media, the stories can be classified as ‘positive’ news.

To get the most out of positive news screening, firms need to understand what they’re looking for, and how they can leverage their existing tech stack or engage new technology to bring in the kind of stories they want. 

What is Positive News?

Positive news essentially refers to any story about an existing or potential client that holds some prospect of value for a financial institution. Positive stories can involve a range of business-relevant developments or events, including:

  • A rumoured sale or acquisition
  • An upcoming client profile in a leading news publication
  • A client’s nomination for an industry award
  • An award of a royal warrant
  • A new investment 
  • A new product release
  • An IPO
  • Expansion in a new region

Stories involving high wealth individuals are just as valuable, including news about lucrative promotions, inheritances, marriages, family events, or any circumstance that might generate an opportunity to invest money.

What is Positive News Screening? 

Positive news screening describes the process of actively searching for positive stories about existing clients or new prospects, in order to generate new business. It is especially prevalent in private banking, wealth management, and banks with high net worth clients, but is growing in application across a range of banks and financial institutions who are recognising the benefits it offers.

Many banks already implement a positive news screening solution via a team of researchers, sometimes known as a Client Development Team, who manually scour the internet for positive news information. When a potential opportunity is identified, the team works to verify the story, and establish a line of communication. This manual approach shares common ground with manual negative news screening, including its time-consuming inefficiencies such as difficulties scaling, human error, and ongoing drain on employee time and attention.

Like manual negative news screening, manual positive news searches are increasingly unsuitable for dealing with 21st century data burdens. If your firm is struggling with manual search inefficiency, it’s time for a new approach to positive news.

Understanding the Positive News Screening Process

Under risk-based compliance regimes, most banks and financial institutions integrate technology to screen customers against negative news. Covering global news sources, screening technology solutions deliver financial intelligence that can be used to build-out detailed customer risk profiles and inform compliance decisions. 

Positive news screening solutions are built on the same screening technology. Rather than identifying risk indicators, such as a customer’s sanctions designation or political exposure, positive solutions instead identify indicators that the customer has or could become a financial prospect. 

The functional components and techniques of positive screening are not substantially different to the negative screening process. Positive news teams use existing adverse media risk classifiers alongside additional ones to capture positive indicators, including sources of wealth, or ultimate beneficial ownership (UBO), and then develop leads to open up new business opportunities. The underlying software is also the same, and functions by linking individuals and entities to particular categories of news story. 

Why Screen for Positive News?

Demand for new financial opportunities typically drives positive news screening efforts, but it’s important to understand the wider benefits of the process, and how it adds value to businesses. 

Data Value

Negative news screening is often characterised as a ‘needle in a haystack’ process, with teams working through vast amounts of irrelevant data – only a fraction of which is eventually useful for compliance decision-making.

In implementing an effective positive news solution, firms can transform the value and efficiency of their data collection process by making a much greater proportion of that data relevant to their business objectives.

Applying Innovation

Cutting-edge screening technology, such as generative AI (GenAI) enabled search tools, may initially be applied in only a limited capacity if their use is restricted to risk screening. Natural language processing (NLP) systems, for example, use sophisticated algorithms to identify compliance risk in unstructured data such as news articles or social media posts.

Those compliance assets are capable of identifying and processing positive news from those same media sources – with the same speed, efficiency, and quality of intelligence output. Implemented effectively, positive screening not only increases the value of technology for firms that lean in to innovation, but delivers a potentially important competitive edge.

Opportunity Profiles

Customer risk profiles essentially collate important risk data, such as a subject’s political exposure, their connection to organised crime, sanctions designations, and so on. Compliance teams use these profiles to efficiently map and understand a given target’s risk level, and use that insight to make better decisions.

However, customer profiles don’t have to be limited to risk insight. In a solution designed to capture positive news, screening software is tasked to generate customer ‘opportunity profiles’ which collate positive data points, and outline the potential benefit of pursuing the target as a partner.

Risk vs Reward

In risk-based compliance regimes, screening outputs are assessed against a firm’s risk appetite. Positive screening outputs add a new metric to that process, delivering new insight that allows firms to assess customers on a scale of risk to reward. The more depth and detail the screening process generates, the more accurately a firm can balance the risk and reward of a potential business relationship.

Customer Documentation

The more a firm knows about its customers, the more it can do to create better business outcomes. Positive news screening outputs, in the form of summary briefings, photographs, or news snippets, can be easily extracted and transferred to electronic or physical documents, which can be circulated internally and used to help improve the customer relationship.

AI Topic Classification

AI search tools typically apply topic classifiers to help identify and process adverse media. Compliance teams run searches calibrated for certain topics such as ‘Financial Crime’, ‘Bribery and Corruption’, and ‘Corporate Malfeasance’ – which are further categorised by ‘Personal’ or ‘Business’ risk.

Positive news solutions use exactly the same approach, either repurposing existing classifiers such as ‘Source of Wealth’ or adding new ones that capture opportunity instead of compliance risk. These opportunity classifications may cover story topics such as ‘Business Development Projects’, ‘Entrepreneurship’, ‘Philanthropy’, and ‘ESG and Sustainability’.

Increasing Compliance Value

It’s easy to view compliance simply as a cost-burden which provides value only by helping the company avoid regulatory penalties. By generating meaningful opportunity-intelligence, however, positive screening changes the profile of the compliance function: money spent on strengthening risk screening capabilities now also strengthens a firm’s capability to identify potentially lucrative new leads, and emphasises the skills and expertise of senior compliance personnel.

Seize Your Opportunities: Ripjar Positive News Screening

Ripjar’s Labyrinth Screening platform provides industry-leading client screening capabilities for organisations around the world, generating actionable financial intelligence in seconds to ensure strong decision-making in a complex data landscape.

Labyrinth’s positive news screening capabilities match that speed, depth, and accuracy, enabling client name searches of thousands of global media sources, in real-time, and in multiple foreign languages. Integrating cutting-edge AI analytics, Labyrinth helps firms build out rich, detailed customer profiles from only the most relevant positive news data, and uses GenAI technology to create concise summaries of the most valuable opportunity insight.

Learn more about Ripjar’s positive news screening technology

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