Neotas Employment Screening 2021 Annual Report

Reflections on 2021

“Employers in 2021 were forced to adapt and overcome a host of challenges that were multiplied due to the pandemic. 

In an increasingly ‘connected’ world, adopting new technologies and techniques like our social media screening services proved vital, leading to actual improvements in hiring decisions.” Ian Howard, Director

The Neotas Employment Screening 2021 Annual Report includes insights and data from the thousands of employment screening checks we conducted that year.

While all searches continue to operate under the strictest data protection guidelines, the Employment Screening 2021 Annual Report gives an overview of our findings. The report includes a selection of noteworthy anonymised cases and insights into the types of behaviours most commonly uncovered in our searches.

What We Found

Traditional employment screening checks are generally procedural and heavily reliant on databases. The primary concern of these checks tends to be based around aptitude and proven criminal history, with less emphasis on attitude or personal suitability for the company. 

Our enhanced employment screening searches reduce the blind spots left by traditional checks by broadening and deepening the search into the suitability of an employee. We do this for a new hires as well ongoing monitoring of existing key personnel.

An astonishing 16% of searches in 2021 returned at least one red flag, signalling that a high-risk behaviour was identified which directly related to the individual. 

Our clients constantly tell us that these red flags do influence their hiring and staff retention decisions.

Although the primary function of our searches is to identify negative or high-risk behaviours relating to an individual, that is far from the full picture. Another is also to identify positive behavioural attributes that may prove beneficial to a hiring decision or to the employee in question. These are shown as green flags.

84% of cases in 2021 confirmed the suitability of the candidate, many of which included evidence of positive attitudes and behaviours concerning the individuals in question. 

Red Flag Breakdown

Neotas conduct pre-built search queries (investigative lines of enquiry) that identify common high-risk behaviours. We also customise and configure the ‘risk identifiers’ and searches to suit the industry or organisation. 

Typically, these searches seek to identify illegal behaviour, reputational risks, inconsistencies in personal details and much more.

Examples of the risks included in these searches are:

• Inappropriate / Undesirable Content
• Sexually Explicit Content
• Employment Inconsistencies
• Hate & Discriminatory Behaviour
• Extremism
• Violent Content
• Illegal Activities
• Substance Abuse
• Educational Inconsistencies
• Others

Over the past 12 months, the most common red flag uncovered was present in over 45% of cases where a high-risk behaviour was found.

Evidence of hate, discriminatory behaviour or extremism was also one of the most common red flags throughout 2021, alongside links to violent content.

Our searches uncovered evidence of illegal activities in 12% of red flag cases – these behaviours would not be found by a traditional DBS check, had there not been a prior conviction.

Download the full report to find out the other most frequently discovered red flags in 2021

Interesting Cases

All Neotas searches are fully GDPR compliant and we ensure that ‘protected characteristics’ remain protected. Here are some anonymised examples of some of the most noteworthy cases from the past year:

• A senior candidate being onboarded for a role handling confidential data was found to have a history of data leaks in their previous employment.
• We were able to confirm the suitability of a candidate for a management position, also finding evidence of recent charitable and volunteering work.
• An executive candidate being considered by a major organisation had links to a number of potential reputational risks, including a history of publicly sharing explicit content.

View other recent case studies here

Why use enhanced social media screening?

More than 16% of cases in 2021 returned at least one red flag, constituting a high-risk behaviour associated with an individual that would not have been picked up by traditional database-reliant checks.

The potential impact of making a bad hire, or of not effectively managing company culture is substantial – though by embracing enhanced screening technologies, firms can avoid these costly mistakes.

In an increasingly remote working environment, those making hiring decisions can no longer rely on face-to-face meetings to help evaluate individuals, therefore additional information and insights are vital.

The experience of many thousands of cases has enabled Neotas to develop a powerful Online Reputation Screening capability in the form of a managed service and a ‘pay-As-You-Go’ model. 

By adopting the latest and most innovative of Neotas’s services which is ongoing risk monitoring for existing employees, we have proven that organisations do reduce bad hires. 

By establishing Ongoing Monitoring as part of the hiring process we have helped many companies protect against such damage and loss. The upside is greater ‘peace of mind’ and a more positive culture amongst employees.

Schedule a call with our team today, to find out how social media screening checks can lower your business risks in 2022.

Download the Full 2021 Employment Screening Annual Report Here

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Private Equity Risk: What You Don’t Know Can Hurt You :

That stupid saying “What you don’t know can’t hurt you” is ridiculous. What you don’t know can kill you. If you don’t know that tractor trailer trucks hurt when hitting you, then you can play in the middle of the interstate with no fear – but that doesn’t mean you won’t get killed. — Dave Ramsey

According to McKinsey’s 2021 Private Markets Annual Review, private equity has outperformed other asset classes and experienced less volatility than any year since 2008. 

The review suggests that more institutions and wealthy individuals are turning to private equity (PE) to supplement and bolster the returns of their traditional investment portfolios as the markets remain largely unpredictable. 

Increased levels of activity can lead to a host of new challenges and private equity risks, as the appetite for dealmaking forces a sense of urgency – meaning that due diligence can at times be overlooked or under-executed. 

New Challenges for PE Investment Firms

Deloitte predicts that global PE assets will reach $5.8 trillion by 2025, significantly above the $4.5 trillion at the end of 2019. The significant increases in PE funds inevitably create new pressures on those responsible for investing the new capital and greater risk for their investors. Here are some of the reasons why:

Demand for rapid deployment of funds
According to MarketWatch, the top 25 private-equity firms had $509.8 billion in uninvested cash at the end of the 2nd quarter of 2021. Some claim they have more money than potential investments. 

With “excess” funds and a demand for deals, firms are diversifying into new industries and geographies with limited experience.

Increased competition
The number of private equity firms raising investor funds and seeking investments has increased on average about 7% each year since 2013, with an estimated 9,000 globally in 2021. The number of completed investments has been stable since 2015, while investment totals have increased. 

While demand for high-return investments has grown with the new investment totals, the supply of potential investments capable of delivering such high rates has remained stable. 

The PE firms compete for the desirable opportunities, driving up valuations and increasing risk. Simply stated, too much money is chasing too few deals.

Reduced client management responsibility
The open checkbooks of PE firms encourage excessive risk and over-spending by client companies. Iana Dimitrova, CEO of FinTech start-up OpenPayd, has warned, “Investors are increasingly writing higher and higher checks. Frankly, I see that as detrimental to the long-term sustainability of our industry because businesses are not focused on generating value, they’re focused on burning and deploying cash.”

Increased risk data
For firms willing to embrace enhanced investment due diligence, there is a new level of insight into risk data available. The reputation of a firm and its senior management has never been more critical. Firms don’t want to invest in businesses or individuals with bad reputations or troubled pasts. 

Emphasis on ESG goals
PE firms and their investors are increasingly conscious of a prospective investment’s environmental, social, and governance goals. Elias Koronis, a partner at Hermes GPE, suggests that sustainability is now as big a factor as other risk data; “The big mindset shift is that now ESG risk is as important and as central to a company as any other type of financial risk, such as leverage risk”.

ESG Investing & Due Diligence – Q&A with Brendan Bradley

Limited analytical resources & experience
The experience and expertise necessary to analyse potential PE investment opportunities typically takes years to acquire. 

Analysis of the character and backgrounds of client company management is especially critical and adding capable, experienced staff amidst current market conditions is increasingly difficult. As the workload grows for analysts and PE decision-makers, shortcuts in due diligence are inevitable.

The Importance of Due Diligence

Private equity investment is considered high risk in normal economic periods. The existing market conditions escalate the risk for investors and justify continuous emphasis on investment and reputational risk management.

Client Management Team Importance

Few investors dispute the importance of the management team in the success of a business. Private equity firms understand that the value of a company is not a “good idea,” but management’s ability to transform the idea into reality. 

No matter how revolutionary the concept, the management team’s performance is critical to success.

Of the many factors that affect the investment decision, management due diligence – evaluating the quality and skill of management – is the most difficult due to its intangible nature. 

Inexperienced analysts fail to recognise that search engines index only a small portion of available online information (4% to 6%), consequently omitting masses of data that could provide valuable insight about a company or its executive reputations, work histories, values, and abilities.

Under competitive pressures to quickly determine whether an investment is warranted, private equity analysts are tempted to minimise reputational risk in their due diligence, especially when a cursory search confirms their subconscious biases. 

An open-source internet search – enhanced by machine learning and natural language processing – provides independent, unbiased information about the attitude and aptitude of individuals and firms, ensuring they comply with regulatory guidelines and identify potential conduct or financial crime risks.

PE Analysts Limitations

Private equity analysts are especially adept at reviewing quantitative financial and industry data necessary to confirm or modify prospective investments’ pro forma statements, valuations, and cap tables. 

Unfortunately, they rarely have the search and database query skills and experience required to complete enhanced due diligence (for risk & compliance), investment (or management) due diligence, or specific functions, including ESG. 

Their lack of experience can overlook indications of questionable actions – allegations of discrimination and abusive behaviour, data leaks, fraudulent behaviour, and corruption – by the potential investment candidate or its founders.

Case Study: ESG Risks Uncovered In Investigation For Global Private Equity Firm

Private Equity Risk  :

Private equity investments offer substantial opportunities for growth and returns, but they are not without risks. Investors in private equity face various types of risk, including market risk, liquidity risk, and operational risk. Market risk stems from economic fluctuations and the potential for underperformance of portfolio companies. Liquidity risk arises because private equity investments are typically illiquid and require a longer investment horizon. Operational risk pertains to issues within the portfolio companies, such as mismanagement or operational challenges. Successfully navigating these risks requires thorough due diligence, diversification, and a long-term investment perspective to capitalize on the potential rewards of private equity.

Time To Know More (private equity risk)

In this hyper-competitive PE period following the pandemic, private equity risk is exceptionally high. The combination of increased client expectations and higher investment amounts forces PE firms to identify, analyse and confirm investment decisions on tighter deadlines and in a saturated market.

Simultaneously, the global increase of social activism exposes companies to new risks – with sustainability and culture at the heart of reputational vulnerabilities. 

While no strategy is failsafe, a thorough and complete due diligence process, including reputation and management, can help lower overall investment risk while relieving pressure on internal resources.

For more information on lowering investment risk, schedule a call with our team here.

Tags : Private equity , Private Equity Fund, private equity risk.

Using Open Source Intelligence To Enhance Online Reputation Management :

While reputations can be built, sometimes crafted, over many years, they can be tarnished in an instant. The value of a reputation should not be underestimated and it’s imperative that brands use all of the tools at their disposal to protect and bolster their reputation.

Deloitte have previously determined that up to 75% of a company’s value can be considered intangible. This translates to three quarters of a business’ overall value being vulnerable to reputational damage.

Employing the right technology as part of online reputation management can help brands proactively protect their reputations, mitigating risks and solidifying market perception.

The Evolution Of Risks

In a global economy, risks are more varied in size, location and damage potential than ever before. The online world presents limitless opportunities and risks for brands who are now expected to be available and vigilant 24/7. 

These are just some of the types of reputational risks to brands that can be found online:

Consumer & Worker Voice 

The internet has granted previously unheard consumers a platform to share feedback, evaluation and criticism. 

Consistently negative consumer feedback will undoubtedly reflect poorly on a brand. Monitoring and evaluating consumer feedback can serve as a reflection, at least in part, of the “voice” of a company’s customer base.  

Company workers have been granted a similar platform through online review sites such as Glassdoor. Similarly to consumer voice, public employee feedback can act as a barometer for company performance and culture, and will certainly influence the public perception of a brand if a negative news cycle begins to build.

Internal Threats

Internal business threats can come in a host of forms, including confidentiality breaches and personnel misconduct.

Reviewing a management team’s online footprint can help highlight potential risks including damaging behaviours and misconduct – all of which can negatively impact the reputation and value of the target company in the present and future if left unchecked.  

Case Study: Online Screening Of Senior Manager Reveals Internal Confidentiality Threat

In a previous case we discovered damning allegations of sexism and derogatory behaviour from staff towards their company’s CEO. Upon reviewing the report, our client decided not to continue with the deal – a decision that was reaffirmed when the CEO of the target company hit the press a year later.  

International Risks

Brands that operate internationally need to be aware of the risks that can come with global supply chains, where they may have limited control but could still be vulnerable to reputational damage.

For those brands operating internationally, threats to reputation should also be monitored and considered in different languages. While many online tools claim to give oversight of online and global brand threats, not using a multilingual approach can lead to unnecessary exposure to threats. 

Social Media, Brand Ambassadors Brand Values

As has been made very public over recent years, social media has the potential to come back to haunt the reputations of high profile businesses and personnel.

It can reflect poorly on a brand to be associated with individuals who are not seen to represent their values and culture. Australian rugby player Israel Folau lost a number of his endorsement deals after a series of homophobic social media posts, with sponsors announcing that Folau’s views “are not aligned” with their own values. 

While in Folau’s case, the brands were forced to be reactive, proactive screening can help lower the risks of brand damage.

We wrote previously of the impact of sport and social media, with England cricketer Ollie Robinson now irrevocably linked to a damaging news cycle surrounding racism and historic social media posts.

Had Robinson’s profile been screened ahead of his selection for England, or in fact ahead of his first professional contract, his employers would have been aware of the posts and could have taken proactive steps towards rehabilitation or punishment for the player, while avoiding a future scandal altogether.

A Recent Example: Driving Ambassador

In a recent case working with a major advertising agency, we conducted open source background checks on a selection of potential ambassadors for an upcoming campaign for an automotive brand.

We conducted searches on a number of high profile names, checking traditional risk behaviours, as well as thematic references focusing on vehicles, driving and similar related themes.

Amongst the findings were behavioural red flags that may have been reputationally challenging for the automotive brand. For one subject, we uncovered a previous driving related conviction that had escaped public attention to date, while another had previously shared derogatory content towards drivers on social media.

Selecting either individual as an ambassador for a global campaign could have caused serious reputational damage for the brand, had they not been fully vetted.

Limited By Online Tools

Although many brands already employ online reputation management tools, many online tools rely on manual searches, or are only able to focus on specific keywords. The limitations of these processes are plain to see, with a restricted view of potential risks. 

Traditional online searches are limited by the data sources that they are able to canvas. General internet searches only cover 4-6% of available online data, meaning that online brand management tools only access a small portion of potential risk data.

Using open source intelligence, thereby accessing 100% of available online brand risks, broadens the risk management strategy to include social media, all online activity, adverse media checks and more.

By broadening searches to include thematic or industry-specific terms, like driving or vehicles in the example above, we are able to paint a more complete picture of brand risk no matter the industry. 

Lastly, by using tools such as Neotas’ AI powered Platform, we can process risks in over 200 languages, granting even stronger protection for international businesses.

Easy To Lose, Tough To Win Back

Countless examples prove how difficult it can be for brands, businesses and personnel to win back reputations once they’ve been damaged.

Market perception and reputation are perhaps the single most significant external factor in influencing a brand’s overall value. A positive, strong reputation can create value for shareholders, while also improving confidence and trust in the brand for the public and for customers.

Introducing a proactive approach to online reputation management, including the introduction of open source background checks and brand reputation management checks can help limit exposure to potentially damaging threats.

About Using Open Source Intelligence To Enhance Online Reputation Management :

Leveraging Open Source Intelligence (OSINT) to Enhance Online Reputation Management (ORM) is an invaluable strategy in today’s digital landscape. OSINT empowers individuals, businesses, and brands to proactively monitor and manage their online image. By analyzing publicly available data from diverse online sources, including social media, news outlets, forums, and blogs, ORM professionals can swiftly identify and respond to mentions, both positive and negative. OSINT also provides insights into emerging trends, competitor perceptions, and crisis management. This proactive approach not only safeguards a reputation but also enables businesses to adapt, grow, and maintain a positive online presence in an era where perception carries significant weight.

For more information about protecting your brand and online reputation management, schedule a call and speak with our team today.

How The Pandora Papers Changed Due Diligence Forever :

The Pandora Papers leak – the latest in a series of off-shore data leaks in the past seven years – has exposed nearly 12 million financial documents to the public eye.

As with previous leaks, this public scandal damages the reputations of those involved and raises larger questions about trust, risk and the world of due diligence.

Business that was once hidden behind complex corporate structures has now been brought to light. With it comes millions, possibly billions of intriguing data points for financial investigators, lawyers and police officers to pore over.

Panama, Paradise, Pandora

The Pandora Papers leak is the latest significant data drop from the International Consortium of Investigative Journalists. Previous leaks including the Panama and Paradise Papers, as well as smaller leaks, shed light on the shady dealings taking place in “complex off-shore structures”.

One of the many side-effects of the previous off-shore data-leaks – especially the highly publicised Panama Papers in 2016 – was that it revealed fresh evidence of hidden assets.

In 2015, two ex-wives won a US Supreme Court battle to challenge their settlements after the court found their ex-husbands had misled the courts and failed to disclose property that had been revealed in the leak. This is just one example of how undisclosed assets can impact the legal course of action.

Another, possibly more significant side effect was that they also revealed how many “complex” business structures were, after thorough investigation, discovered to be better described as money-laundering schemes.

Nothing to see here – so far

So far, there have been no allegations of financial wrong-doing in the Pandora Papers. This was also the case following the publication of the Panama Papers.

Fast forward four years however, and the Cologne public prosecutor’s office issued international arrest warrants in 2020 for the partners of law firm Mossack and Fonseca.

In 2016, the firm had responded to journalists saying they followed “both the letter and spirit of the law”. And just as then, so it is now.

No allegations of criminality have been made to date and the off-shore services providers implicated in the Pandora Papers have, so far, claimed to have operated fully within the law, as was the case in 2016.

Alcogal, Asiaciti Trust and Fidelity were all named in the latest leak.

Alcogal has claimed no criminal wrongdoing, stating its due diligence policies “follow the standards set by the laws in the jurisdictions in which it operates”.

Asiaciti Trust said its offices had “passed third-party audits for anti-money laundering and counter-financing of terrorism”. Fidelity said it conducted “relevant due diligence” on all its clients.

All three remain under intense scrutiny from regulators, watchdogs and the public eye.

The times are changing

The new Anti-Money Laundering Act (AMLA) in the USA may change all that. It specifically prohibits politically exposed persons (PEPs) from falsifying the source and ownership of funds & assets, and allows US law enforcers to subpoena bank records from foreign financial institutions.

Under Section 6403 of the Corporate Transparency Act, all corporations, LLCs and banks will be required to submit beneficial ownership information to the newly formed Financial Crimes Enforcement Network (FinCEN) at the US Treasury. It also revises Customer Due Diligence Requirements for Financial Institutions.

The times are changing. Where once the Treasury was unable to enforce AML laws, US law enforcers will now be more aggressive in checking a company’s due diligence and KYC policies. Isn’t it time to minimise your risk?

Regulators across the financial industry are already regularly reinforcing the idea that firms need to do more. Just doing the minimum required due diligence will no longer be appropriate when risk data is available but not being considered.

Adopting tech-driven, enhanced due diligence practices that connect the dots between disjointed database searches and open-source data can help minimise those risks.

The Pandora Papers have changed the world of due diligence forever :

The Pandora Papers have ushered in a seismic shift in the realm of due diligence. This massive leak of financial documents, unveiling the offshore holdings of the world’s elite, has brought unparalleled transparency and accountability to the forefront of global conversations. As governments and institutions grapple with the revelations, the implications for financial investigations, compliance, and anti-money laundering efforts are profound. The Pandora Papers serve as a catalyst for redefining how due diligence is conducted, emphasizing the importance of unearthing hidden assets and ensuring ethical financial practices. This watershed moment in investigative journalism is reshaping the future of financial scrutiny and governance.

If you want to discuss due diligence or risk management, our team are here to help. Feel free to get in touch or schedule a call here.

Dear Trade Finance Firms – The FCA Wants You To Do More :

The recent Dear CEO letter shared by the FCA & PRA has sent a stern warning to businesses operating in trade finance – more needs to be done.

The letter was addressed directly to the CEOs of firms carrying out trade finance business and has caught the full attention of the industry due to its direct nature. It outlines a clear need for change but includes a marked shift in tone from traditionally sanitary messages of “advice” or guidance, instead laying out staunch requests for businesses to improve their oversight of their current position.

After a number of significant, high profile losses within the commodity trading industry in recent years, trade finance and credit risk analysis has hardly ever been in the spotlight so often.

The position of the FCA & PRA is made clear from the start, their hands have been forced to respond after overwhelming recent evidence pointed to insufficient due diligence. 

“Our recent assessments of individual firms have highlighted several significant issues relating to both credit risk analysis and financial crime controls. These issues have exposed firms to unnecessary risks that are material in both a conduct and prudential context.”

In response to this, they are demanding more from firms when it comes to risk assessment, counterparty analysis and transaction monitoring.

Reacting to an uncertain market

The letter addresses the uncertainty of the market and the prolonged, increased opportunities for fraud and non-compliance. They make clear that the existing framework adopted by many firms is not fit for purpose, especially in this changeable market. 

A post-pandemic wave of financial crime has been threatened for some time, with KPMG forecasting that a tsunami of fraud was en route in 2021 and beyond. While the warnings have been public and plain to see, it’s surprising that firms aren’t already embracing additional risk management considering the uncertainty we all currently face.

The letter highlights the “focus and assessment of financial crime risk factors” as just one of the insufficiencies commonly displayed in recent assessments. Others include poorly evidenced decision making, notably when it comes to residual risk. 

The Right Tool For The Job

There is a warning of how failing to properly address risks can lead to exposure to financial crime, to non-compliance, to suspicious activity and to the consequences that may come as a result.

The expectation continues to be that some deals inherently require a greater degree of diligence than others, on both sides of the transaction. It is the duty of the transacting firms to comply with the expected levels of diligence required. 

Amongst the tools suggested in the letter, there is an explicit directive to consider where enhanced due diligence and non-financial risk evaluation should be required. Many of the “red flags” listed in the letter including money laundering, adverse media and more are typically discovered as part of open source EDD, like we provide at Neotas. 

We wrote previously of how non-financial risk identification could be the difference maker when it comes to credit risk and the same principles apply across the industry.

As counterparty networks become ever-more complex, the importance of full network analysis is highlighted in the letter with a clear directive that all parties related to a transaction should be appropriately considered. 

Network analysis remains at the core of many of our investigations, particularly for clients working in trade finance. In these cases the front-facing counterparty often displays little to be concerned about, only to find risks hidden within their network. 

Discoveries of networks including undisclosed PEPs, directors and relationships are common – a recent case also uncovered terrorist financing linked to a seemingly “clean” subject. Without diving into the network of the counterparty, you cannot fully understand the risks.

An Example: Network Analysis Uncovers Fraudulent Activity

A recent case of enhanced due diligence for Channel Capital uncovered a host of suspicious behaviours associated with the network of a subject in a European company.

While reviewing the company and its director, full network analysis uncovered evidence linking the subject to a number of bankrupted companies.

Uncovering the details of the bankrupted businesses allowed us to discover suspicious payments made between the European company and the newly discovered entities. Payments that were being made in an effort to manipulate the subject company’s books in order to appeal to investors.

The insights uncovered informed Channel’s decision making, who eventually halted the deal and alerted the authorities of the fraudulent payments. 

Download the full case study here

Not-knowing is not good enough

While not knowing or being unaware of non-compliance has never been a defensible argument, the tone from the regulators in the letter is stark:

“This letter has reiterated our expectations of firms when undertaking trade finance activity.”

The message could not be clearer and should come as a stern warning. Our discussions with clients often center around the idea that “if the information is out there, wouldn’t you want to know about it?”. The message from the FCA and PRA seems to have shifted to a more definitive:

“If the information is out there, you should know about it”.

Supplementing Existing Guidance

“The expectations set out in this letter are not exhaustive and should be considered alongside relevant rules and guidance such as Joint Money Laundering Steering Group guidance, the PRA Rulebook and the FCA’s Financial Crime Guide.”

While it’s made clear that the new recommendations aren’t exhaustive, the instruction here is to apply additional scrutiny to transactions, particularly when there is a need for a deeper dive.

Firms have been instructed to be reactive and responsible for the deals they are a part of, evidencing transparent, informed decision-making along the way. 

A gauntlet has been laid down by the regulators in no uncertain terms. Firms should continue to apply traditional due diligence while embracing new technologies, such as EDD, to help protect all parties and maintain compliance. It will be interesting to see who rises to the challenge.

Trade Finance Firms :

Trade finance firms are essential entities in global commerce, serving as financial intermediaries that facilitate international trade transactions. They offer a spectrum of services and instruments vital for businesses engaging in cross-border trade. These services encompass letters of credit, supply chain financing, export and import financing, trade credit insurance, and documentary collections. Trade finance firms also specialize in compliance, risk management, and trade advisory services, helping clients navigate complex regulations and manage trade-related risks effectively. Their expertise and support enable businesses to optimize cash flow, mitigate risks, and ensure the smooth flow of goods and services across borders, fostering economic growth and international business expansion.

How Social Media Due Diligence Can Improve Investment Decisions :

When assessing non-financial risk data as part of M&A due diligence, traditional checks currently pay little attention to investigating the online footprint of a target company. An organisation’s online activity, and indeed the online activity of its management teams, can provide valuable insight into reputation, culture, management personas and more.  

With post-pandemic financial data difficult to trust, non-financial risks are likely to become increasingly significant as private equity and investment firms seek additional data points to supplement decision making.

Social media due diligence tools can be used to interrogate vast quantities of public online data, helping to identify potential business or personnel risks within the target company. 

What social media due diligence tools can uncover 

Contained within online public data is a wealth of previously untapped resources relating to both risk and opportunity. By combining natural language processing, AI and expert human analysis, risks can be identified that would not be uncovered using traditional due diligence processes.

When harnessed properly, this data can be used to provide a new dimension of analysis into non-financial risks and goes beyond the depth of insight provided by typical brand sentiment analysis. 

Consumer Voice

Public perception can have a significant impact on the overall reputational health of an organisation, with online reviews granting consumers a previously unheard tool to provide feedback, evaluation and criticism.  

Consistently poor consumer feedback of a product or service could be considered a red flag in terms of company reputation, and possibly even operational flexibility if the organisation has shown no willingness to improve over time.  

Monitoring and evaluating consumer feedback can serve as a reflection, at least in part, of the “voice” of a company’s customer base.  

Worker Voice

Similarly to consumer voice, public employee feedback can act as a barometer for company performance and culture.   

While websites such as Glassdoor have paved the way for employees to review workplaces, by interrogating all online public online data we can uncover a multitude of potential risks hidden from traditional feedback platforms. 

Management Review

Social media due diligence checks should also be used to help build a more complete picture of the character and attitude of management teams ahead of any deal. 

Reviewing a management team’s online footprint can help highlight potential risks including damaging behaviours and misconduct – all of which can negatively impact the reputation and value of the target company in the present and future if left unchecked.  

One previous example includes damning allegations of sexism and derogatory behaviour from staff towards their company’s CEO. Upon reviewing the report, our client decided not to continue with the deal – a decision that was reaffirmed when the CEO of the target company hit the press a year later. 

The impact of public online reputation on businesses and value 

Significant behavioural issues of staff should also be considered particularly seriously considering the damaging impact that “cancel culture” can have on an organisation’s value. 

In what is now a renewed age of social activism, amplified by movements like Black Lives Matter and Me Too, it’s imperative that a potential buyer pays attention to what’s being said about a target company on social media. 

The mass withdrawal of support for a person or company due to their public or online behaviour, whether labelled “cancel culture” or not, will have clear implications for the reputation and value of a business. The reputational impact of this type of activism can also spread beyond the subject entity, proving damaging to investors and parent companies also if left unchecked. 

Understanding all of the risks 

Social media due diligence can clearly uncover pertinent information to aid traditional checks, when harnessed correctly. The vast quantities of associated data combined with the need for objectivity means that the right third party tools should always be used. 

Neotas’ proprietary open source due diligence tools combined with extensive experience can be used to provide deeper insights to help inform investment decisions. Our checks process 100% of publicly available data in over 200 languages, leaving no stone unturned when investigating relevant investment risks. 

It is crucial that appropriate care and context is given to risks uncovered during social media due diligence checks, especially considering the natural negativity bias of online reviews. Neotas reports provide zero false positives, enabling resources to be committed to reviewing real risks only. 

For global acquisitions and investment activities, particular care should be taken when considering international data privacy legislation and as such, an ISO-certified third party provider like Neotas should always be used.  

Social Media Due Diligence :

Social media due diligence is a crucial process employed by individuals, companies, and institutions to assess the online presence and activities of individuals or entities. It involves investigating social media profiles, content, and interactions to gather insights on reputation, character, and potential risks. This diligence is particularly vital in various contexts, including hiring decisions, partnerships, mergers and acquisitions, and security assessments. By scrutinizing social media channels, stakeholders can uncover red flags, verify claims, and make informed decisions while navigating the digital landscape’s complexities. Social media due diligence has become indispensable in today’s interconnected world, ensuring prudence and risk mitigation.

Get in touch with our team today to discuss supplementing your investment due diligence with social media and online checks.

Why Management Due Diligence (MDD) Could Be The Key Ahead Of Private Equity Boom :

New analysis from KPMG has revealed that Private Equity Investment has soared to its highest levels in over five years. The investment boom represents a significant jump when compared to the same period in 2020, as the impact of the pandemic began to take its toll. 

While the market continues to steady and confidence rises of a full bounce-back, the uncertainty of the global health crisis means that major challenges could continue to lie ahead. 

KPMG reported that the momentum that began to pick up pace in Q4 of 2020 was fuelled by pent-up demand that had started to be released. Although the appetite for deal-making is clearly growing, with increased activity comes the need for increased scrutiny – particularly during this era of uncertainty. 

The potential for future challenges caused by restrictions, global downturns or even other viral threats means we must embrace all available risk-data to help improve decision-making.

Moving Past Traditional Due Diligence

With so much at stake, it absolutely pays to know more in today’s ever-changing landscape. Traditional due diligence procedures may tick all of the legal and regulatory boxes for the time being, but we believe it’s time to go beyond these practices and supplement them with additional data streams.

Ensuring that a comprehensive management due diligence strategy is in place before an investment or deal takes place will help lower risks.

MDD ensures individuals are scrutinised independently and forensically, lowering the risk from dealing with new associates. It helps assure investors that accountable individuals are competent enough to deliver success and growth without harming the reputation of their enterprise.  Ensuring that social media activity is analysed, for instance, can provide insights into management team behaviours and attitudes that would otherwise not be uncovered through traditional due diligence methods.

In a digital era, a data-led approach that considers all risk angles is critical and management due diligence using open source data should contribute to that risk-evaluation.

These methods go beyond what is uncovered as part of traditional due diligence – evaluating the attitude and aptitude of individuals and firms, ensuring they comply with regulatory guidelines as well as identifying potential conduct or financial crime risks.

Risks uncovered have included allegations of discrimination and abusive behaviour, data leaks, fraudulent behaviour and corruption, to name but a few. While these potential red flags remain operationally relevant, they would not be uncovered using traditional due diligence methods.

Know exactly who you’re working with

It’s often said that people are the biggest asset of any business and it’s essential to consider “people risk” ahead of any deal or acquisition. Effective management due diligence removes subjective and unintentional bias from your decisions, providing vital third-party validation so you can proceed confidently, with no stone left unturned. 

Any possible absence of face-to-face due diligence, whether through travel restrictions or remote operations, has made it more difficult to evaluate attitude and aptitude. Analysis of online behaviour not only provides an additional layer of depth to traditional due diligence but also enables a higher level of inspection when operating remotely.

An Example: Recent Case Involving Abusive CEO

A recent case of management due diligence uncovered insights into a CEO that were not captured during traditional due diligence checks. 

While reviewing the management team of an investee company, particular focus was directed towards the CEO after allegations of potentially damaging behaviours began to appear. 

Our reports highlighted a number of negative employee reviews, allegations of “explosive and abusive” behaviour and a troubling history of discriminatory, aggressive behaviour on social media towards colleagues and other users.

The insights uncovered as part of the enhanced open source checks fed into the decision-making process for our client, raising questions and concerns about the suitability of the client. None of these behaviours were identified as part of their traditional checks. 

Download the full case study here

Proactive Protection – Identify Risks Before They Become Problems

Proactively identifying irregularities, risks or potentially damaging behaviours amongst management teams can help manage future challenges and protect ongoing interests once a deal is made.

Indeed, risks that may be hazardous to long term company value, productivity or culture can be addressed early by harnessing the correct data. Potential reputational crises associated to people risk can also be proactively identified, managed and mitigated with enough warning time and a clear enough picture of the risks.

Whilst our reports can, and often do, influence investment decision-making, our position continues to be to identify the risks and leave future decisions up to our clients. Even when the information doesn’t drastically impact the end-decision, the overwhelming positive feedback we receive from clients centres around new and cost effective level of insight that would otherwise not have been uncovered.

Completed 100 MDD cases for Catalysis

Harnessing Public Data Could Be Key Decision Dealbreaker or Dealmaker

Neotas searches harness 100% of publicly available data to grant our clients a new layer of insight into pre-investment risk. We dig deeper and faster into people, entities and networks – analysing them against a set of core risk indicators including abusive behaviour, fraudulent activity, multiple aliases and more. 

In a hyper-competitive marketplace that is now seemingly riding a wave of pent-up demand for deals, asset managers have a responsibility to consider all risk data as part of their due diligence processes. 

The potential impact for not considering the data from a regulatory and a reputational point of view is stark. Regulators now regard OSINT as best practice when discussing enhanced due diligence processes. With the information on risk out there and readily available, it may hard to build a competent defence in the case of future allegations of non-compliance or in a crisis management situation.

Management Due Diligence :

Management due diligence is a strategic evaluation process undertaken by investors, acquirers, or organizations to assess the leadership team and their capabilities within a company. It involves a thorough examination of executives, their track records, leadership styles, and overall competence. The aim is to gauge whether the management team aligns with the company’s goals, culture, and the intended investment strategy. This diligence helps mitigate risks associated with leadership transitions, ensures effective decision-making, and enhances the potential for successful investments or mergers. Management due diligence is an essential component of informed business decisions, contributing to long-term success and sustainable growth.

We are here to lower risk from investment, acquisitions and purchases, enabling you to build teams you can trust whilst protecting your reputation robustly. Schedule a call with our team today to discuss your investments, management due diligence or any other open source intelligence needs

An Investigation Into England Euro 2020 Social Media Abuse Using Open Source Intelligence :

Following the targeted racist attacks towards members of the England football team after the final of Euro 2020, Neotas have conducted an investigation into the online abuse(England social media abuse).

After Twitter had publicly shared the results of their “proactive” action taken following the final, we focused on Twitter and analysed whether their clean-up effort had been sufficient in identifying and punishing the harmful behaviour.

A Momentous Occasion Marred

The 2020 EURO UEFA European football championships, commonly referred as EURO 2020, was held from 11th June 2021 to 11th July 2021 across various locations in Europe.

The Final match was played on 11th July 2021 at Wembley Stadium, London between England and Italy. Italy won the tournament, beating England 3-2 in a penalty shoot out following a 1-1 draw after extra time.

For England, 5 players took the penalties; Harry Kane and Harry Maguire were successful in scoring. However, Marcus Rashford, Jadon Sancho and Bukayo Saka missed their spot kicks, resulting in Italy winning the championship.   

In a game that was marred by multiple incidences of fan violence and unruliness in the build up to and during the match, the tone was lowered further when racial abuse was aimed at the three players who missed their penalties.

Such was the escalation of the story, members of the Royal Family, UK Prime Minister Boris Johnson and other government agencies weighed in to condemn the attacks, demanding that action was taken to punish the offenders. 

The Metropolitan police opened an investigation on the offensive and racist social media posts that has since seen 11 people charged. The social media platforms themselves continue to claim to have responded in the strongest way possible, with Twitter removing more than 1,000 tweets initially and permanently suspending multiple accounts.

Twitter has since claimed to have removed approximately 1,600 Tweets, accounting for around 90% of abuse. Our investigation immediately discovered an additional 70 that were deemed abusive, racist or threatening in some way.

Platform Responses

Previous meetings with the major football associations of England had resulted in Facebook essentially leaving the onus on the players and clubs to protect themselves, rather than the platform proactively protecting its users. The platform has since made changes that have been deemed insufficient by players and associations thus far. 

While Twitter is just one of a number of major platforms to have been used to facilitate the abuse, it has shouldered much of the attention so far and has shared the most robust and open responses to date. Twitter published this update on the 10th August, following continued public discourse about the online abuse:

“Following the appalling abuse targeting members of the England team on the night of the Final, our automated tools, which had been in place throughout Euro 2020, kicked in immediately to identify and remove 1622 Tweets during the Final and in the 24 hours that followed. 

While our automated tools are now able to detect a majority of the abusive Tweets we remove, we also continue to take action from reports. New vectors of abuse are ever-emerging, which means our system is having to adapt on an ongoing basis. Therefore, to supplement our efforts, trusted partners are able to report any further Tweets directly to our front-line enforcement teams. In total, over 90% of the Tweets we removed for abuse over this period were detected proactively.”

Twitter’s own analysis into the violating accounts is ongoing, but their initial findings concluded:

• The UK was – by far – the largest country of origin for the abusive Tweets removed on the night of the Final and in the days that followed
• That ID verification would have been unlikely to prevent the abuse from happening – as the accounts we suspended themselves were not anonymous
• Only 2% of the Tweets we removed following the Final generated more than 1000 Impressions

The update from Twitter has helped continue the conversation relating to the abuse faced by the England players at Euro 2020, as well as the more general issue of online abuse. 

Twitter have announced the trial rollout of the following actions to help curb the racist interactions on their platform:

• A new feature that temporarily autoblocks accounts using harmful language
• Reply  prompts, which encourage users to revise their replies to Tweets when it looks like the language they use could be harmful

What isn’t clear is how these tools include evaluation of visual media such as images, videos and emojis – something which was prevalent and consistent amongst our limited searches.

Our Insights – Focus On Twitter

Our data analysts are experts in identifying behavioural risks hidden in online data. This can, and often does, include aggressive, discriminatory and abusive behaviour linked to social media profiles. The activity can be active (posted or shared by the subject in question) or passive (linked to, shared or associated with the subject in question).

The data we search is called open source intelligence (OSINT) and is 100% publicly available, however only experts like Neotas have the skillset to interrogate it fully and provide adequate context.

Following Twitter’s announcement that they had removed 90% of abuse within a few days of the final, we conducted a limited search and uncovered more than 40 profiles still active on Twitter. Those accounts that had shared approximately 70 tweets containing discriminatory abuse directed towards the England team. This was following the initial response from Twitter and after the police had opened their investigation.

Of the abusive accounts uncovered in our findings, 83% of them were based in the UK – a figure that correlates directly with Twitter’s declaration that the vast majority of attacks were from UK accounts.

More than 90% of the abusive tweets we discovered were sent after the initial “clean up” from Twitter. While the recent update suggests that the platform is continuing to investigate, our findings suggest that 95% of the accounts we discovered remain active with the vast majority of them still containing the offensive content.

While there was a lot of general criticism and aggression directed towards the England team following their crushing defeat, here is a breakdown of the abuse faced by the three players who missed their penalties:

Racism was the most common theme amongst the responses found, with a large number of accounts including visual content such as images, videos and emojis to emphasise their aggression. Marcus Rashford, who was the overwhelming target of the responses we found, also faced repeated attacks over his charitable work and philanthropy.

In-line with Twitter’s announcement, a large number of the assailants were easily discoverable. Using OSINT, we were able to fully identify at least 6 real people behind the attacks, including information including their real names, contact details, addresses and places of work. With further investigation, we are confident that we would be able to discover more.

The results uncovered as part of our research represent just a small section of the total online activity following the final and is just the tip of the iceberg when it comes to our data interrogation capabilities. While for this exercise we focused primarily on Twitter, there are undoubtedly similar cases across other platforms including Facebook and Instagram. OSINT can easily be harnessed to interrogate all online activity, including social media channels.

How tech can be embraced by both sides of the coin when it comes to sport and abuse

Repeatable Cycle – What Action To Take

The attacks and vitriol directed at the England football team at Euro 2020 was just the latest in a seemingly never-ending cycle faced by sports stars and by the wider online community.

Debates continue as to whether using ID to set up social media accounts is the way to tackle this endemic problem, but what’s clear is that many of these users can already be tracked. Our Director Ian Howard wrote previously of the need to embrace technology to fight the issue, arguing for the use of open source intelligence (OSINT) to help detect, verify and punish those caught being abusive on the platforms. 

It is important to note that almost all of the accounts identified by Neotas and by Twitter were traceable, while many are still active and just 11 have been charged to date. 

In real terms this means that many of those who sent out vile, abusive messages following the final returned to work the following day without employers knowing about their true character.

Businesses have a duty to protect their employees from risk and should use all available methods to help monitor and safeguard their staff’s wellbeing. 

The use of employment screening tools like social media screening can help identify high-risk behaviours and will lower the risks of abusive behaviour within the workplace. These tools can and should be used to screen prospective hires, particularly those in senior roles, as well as current employees. 

England social media abuse :

Addressing social media abuse in England: Examining the prevalence, consequences, and ongoing efforts to combat online harassment and promote a safer digital landscape

To find out more about social media screening or to discuss our findings, please schedule a call with our team here.

Tags :England social media abuse

How Non-Financial Risk Indicators Can Improve Credit Risk Due Diligence :

“Credit risk is more than just financial models. There’s a whole series of non-financial data points that can be used to help make those decisions better.” – Ian Howard, Neotas 

Managing and mitigating post pandemic risk 

For financial institutions, managing and mitigating risk has become an increasingly difficult task following the implications of the COVID-19 pandemic. Ongoing uncertainty has made forecasters’ and risk managers’ jobs more difficult than ever and new due diligence methods are being adopted constantly to help evaluate risks more clearly. 

Credit risk in particular has faced distinct challenges and implications through the crisis – with a lack of pertinent data on crisis conditions, changes in credit worthiness and a “large wave of non-performing exposures” needing to be addressed. 

To help manage the risk for lenders, new approaches must be adopted that are fit for purpose in a changing landscape. Enhanced credit risk due diligence procedures should be adopted to dig deeper into non-financial risk indicators surrounding companies and entities. 

A business’ resilience to post-pandemic fallout will vary depending on the organisation, its processes and, crucially, the people within the business. Institutions looking to mitigate risks in an uncertain landscape should be embracing all of the financial and non-financial data points at their disposal to help improve decision making. 

How is credit risk currently being assessed? 

The rapid, ever-changing nature of the pandemic has led to many financial institutions adapting quicker than they ever have before. By looking through a different lens and utilising readily available data such as non-financial data points, you can better predict the performance of entities. 

Traditional borrower credit risk is usually evaluated by considering the financial position of the borrower, market position, industry specific characteristics and, finally, the quality of the management. 

What was once a structured, well-established credit risk assessment has now been turned on its head. 

The ECB’s recent assessment of credit risk procedures found that not all financial institutions have sufficiently strengthened their credit risk management to combat the expected increased risk. 

Although many institutions have adapted their credit risk due diligence processes, those who aren’t embracing a data-led approach, including non-financial data points, are left evaluating credit risk with limited visibility and an uncertain path ahead of them. 

The Credit Risk Implications of the Coronavirus Pandemic  

We cannot rely on outdated financial reporting 

With the dawn of the pandemic, many conventional sources of typical credit risk data became obsolete overnight. Where previously a high degree of importance would have been placed on financial reporting, even with the typical 6-12 month lag, the relevance of those figures decreased rapidly as markets crashed and industries were rocked. 

While many industries were halted by the pandemic, some prospered. What’s true in all cases though is that none have experienced a typical trading period through that time. As a result, the robust, quantitative financial data that normally forms the cornerstone of credit risk due diligence becomes significantly less reliable. 

So how then do we evaluate the parties in question? While some form of reporting delay may feel inevitable, it is time to engage with alternative solutions to help bolster risk-modelling. By considering non-financial data points such as customer reviews, worker voices and more, we are able to build a more complete picture of the current performance of the company. 

We are beginning to see an emergence of a reliance on qualitative non-financial factors, to counter the shortage of concrete financial data: 

“Banks have long relied on qualitative factors, which they seek to use as objectively as possible, to counter the shortage of more concrete financial data. These banks now also explore publicly available data as a means of cross-checking and validating qualitative information.” – McKinsey, 2021 

Using non-financial data for better risk modelling 

At present, public online data is a largely untapped resource when it comes to credit risk due diligence. Open source intelligence can deliver a significantly greater level of understanding of who you’re doing business with and the potential risks associated with them. 

Our own enhanced due diligence checks enable our clients to evaluate financial and non-financial risk data. The non-financial data points considered as part of our credit risk due diligence service would include: 

• Management due diligence 
• Public customer reviews 
• Worker voice assessments 
• Adverse media 
• Public reputation 

With so much uncertainty currently surrounding quantitative financial data, the benefits of additional data sources are clear – including behavioural factors. Placing greater emphasis on the C & A in the CAMPARI model – Character and Ability – can help improve decision making by considering wider risk factors than purely financial factors.  

While character and skillset alone are not enough to ensure the credit worthiness of a business, when combined with other assessment factors, they can prove to be valuable resources for evaluating the resilience of a business in challenging circumstances. 

Pandemic Uncertainty Leads To Forecasting Difficulties 

Traditional credit risk analysis includes evaluating backward looking actuals and forward looking forecasts. In present conditions, that task is more difficult than ever. 

While many have predicted continued economic contractions in global GDP, the true fallout of the downturn may be felt for years to come. Although recovery is expected, the expectation is for it to be slow.  

The rate of recovery will differ by region, by industry and by organisation. While some have seen profits boom over the last 18 months, many others have faced sustained challenges. The importance of those elements must be considered as part of the risk analysis, where a sector-based approach will not be sufficient and more tailored considerations should be made.  

For those dealing internationally, the picture complicates further. With many global economies in different stages of recovery or suppression, relying solely on outdated financial data or recovery forecasts would be unwise. 

Time To Adopt Data-led Approach Is Now 

With most firms seeking every available opportunity to gain a competitive advantage when it comes to investing or lending, the adoption of a more data-led credit risk approach was inevitable. 

While the pandemic may have accelerated the process for some institutions, the advantages of adopting these additional tools are clear. Going beyond traditional processes and considering all available risks enables quicker, more informed decisions – while having greater understanding of those you’re working with also comes with a host of clear benefits. 

Our proprietary technology is able to process vast quantities of data that are left unindexed by traditional credit risk sources. By diving deeper into analysing public data, our clients are able to make better informed, lower risk and ultimately more profitable decisions. 

We are also able to offer our clients the benefits of our Ongoing Monitoring service. Perfect for fast-moving markets, this service uses our AI-driven technology to consistently evaluate and identify emerging risks and threat opportunities. Clients are able to monitor ongoing risks, without false positives. 

To discuss how open source intelligence can help your credit risk due diligence or risk management practices, please schedule a call with our team here. 

The Impact Of Social Media On Sport – How To Avoid A Crisis  :

Social media and sport are inextricably linked. The globalised, commercial nature of professional sport means it now relies on social media to bring its products to new audiences and to communicate sponsored messages to fans. The relationship between the two is not always without disruption though. 

While online platforms have grown rapidly over the last 10-15 years, the impact of social media on sport has opened up possibilities for both opportunity and risk.  

On one side of the sometimes-troubled relationship, there are the negative effects of social media on sports. In particular, the endemic issue of fan abuse towards professional athletes. Our Director Ian Howard wrote previously of the growing problem – arguing for the use of open source intelligence (OSINT) to help detect, verify and punish those caught being abusive on the platforms. 

On another side are more positive effects of social media on sport – such as commercial opportunity. Social media and digital presence play an increasingly significant role in determining player, or even organisational value. More than ever, that value is determined by both sporting ability and global marketability. So what happens to that value when said player, athlete or club is embroiled in a damaging social media scandal? 

History Repeating Itself 

Scandals, or reputational crises, as a result of social media have become relatively commonplace in sport.  

Premier League strikers Andre Gray and Jarrod Bowen are among two recent cases. Both players apologised for their actions and while their respective clubs condemned the behaviour – they are often rendered guilty by association. As these types of incidents have no clear end-point, they are often prolonged and the guilty parties can be forced to carry it with them for years – as has Gray. 

Despite the regular occurrence of these incidents, sport continues to fall victim to social media fuelled crises. 

Before May 2021, many who recognised Ollie Robinson’s name knew him simply as a talented cricketer. Now, Robinson is embroiled in a reputation scandal. A selection of abusive tweets made nearly a decade ago surfaced shortly before Robinson was due to make his England debut. 

Now both Ollie Robinson and the England and Wales Cricket Board find themselves fighting a crisis management fire, a crisis that could so easily have been avoided.  

Social Media – Weaponised Threat 

One potentially alarming idea now is the prospect of a weaponised attack using historic social media posts, such as Ollie Robinson’s, to derail a sports team. While it may be hard to quantify the impact the scandal had on the England cricket team, when it unfolded, little public conversation was focused on the actual cricket being played. 

Shortly after the Robinson story reached its peak in terms of news coverage, another emerged of an as yet un-named player sharing damaging social media posts in their past. Although the reason for the timing of the leaks is unknown, it’s difficult to not establish a link between the two. 

While many in sport have a win-at-all-costs attitude, the idea of weaponising these crises is a distressing one. When the stakes are as high as they are in professional sport, not properly addressing all of the risks in front of you can have a seriously damaging impact on staff wellbeing, financial performance and public reputations. 

How To Mitigate Risks  – Use The Right Tools 

Effective employee screening, using social media background checks, would have helped mitigate the risks of social media in all of the cases mentioned above.  

Social media screening uses open source intelligence to assess a person’s digital footprint against employment related risks only. It can be used to screen potential and existing employees, helping avoid damaging hiring decisions or future reputational damage. 

In the case of Ollie Robinson, the checks would have identified the tweets in question, as well as any other high-risk behaviours, using our natural language processing. Those insights would have been handed over to the ECB, who could then make an informed decision for how to move forward. In this scenario, the ECB would also have been prepared to deal with any future events based on the incident. This is proactive crisis management. 

These tools are used consistently in corporate recruitment to help employers, recruitment teams and HR personnel understand the risks more fully before making hiring decisions. They can also be used to help monitor and maintain culture within teams, identifying potentially dangerous behaviours within an organisation or team. 

For sports teams, whose position is so public-facing, regular screening of employee (including players) social media profiles can help minimise risks. 

Proactive Protection Against Threats 

When it’s so easy to prevent this kind of crisis, it’s hard to see why organisations wouldn’t learn from the mistakes of the past. Governing bodies, sporting clubs or any organisation with outward facing, high profile representatives should be embracing this technology and using it to proactively to protect their reputations from future risks. 

Due to their public persona, athletes are not always considered as regular employees but in this case they should be treated as such. Players and individuals may be the biggest assets for any team but they could also be the biggest weakness.  

Social media screening from Neotas is the perfect solution to this issue. It has a rapid turnaround time and is cost effective, especially when weighed against the damaging implications of an ongoing reputational scandal. 

The checks are GDPR compliant, use only public data and are regulated by third party associations like AFODD. Our technology processes data in over 200 languages so is perfectly placed to screen international employees like players, managers or staff. 

While the use of social media screening grows in corporate recruitment, sport, for now, is lagging behind in not vetting their employees as fully as they could. Such is the impact of social media on sport that reputations and financial value continue to be damaged in crises that could have been sidestepped. 

Whether competing for the World Cup, The Ashes or the Champion’s League, social media screening checks should be one of the first, most powerful tools in your risk management armoury. 

If you want to discuss social media screening or risk management, our team are here to help. Feel free to get in touch or schedule a call here. 

Download Our Recent Case Study – Adverse Media Uncovered On High Profile Sports Executive

How Social Media Screening Benefits Our Clients

Guest Blog by Vero Screening

How Has Social Media Screening Benefited Our Client Base?

In a world that requires ever-increasing online due diligence, we are seeing clients’ screening requirements constantly evolve. As of 2019, and after much supplier comparison, we partnered with Neotas to provide our social media background checks.

The Need for Social Media Screening

On average, a quick Google search only shows you 4-6% of all data available on the internet. As the digital age progresses, HR Managers are seeking more information about who they are hiring, to paint a fuller picture of a potential employee, and whether they will suit their company culture.

Now more than ever, there’s an increasing focus on how a bad hire could potentially harm a business’ reputation. Tools such as  social media screening can help lower the risks involved with a bad hire.

We recently conducted a Social Media Screening Webinar in collaboration with Neotas where 46% of attending professionals revealed they had an experience of an employee with a negative online profile.  The results show the importance of pre-employment enhanced screening, with attitude and behaviour not always considered highly enough in the hiring process.

The Uptake

The interest from our clients has been clear and has been growing steadily in the first quarter of 2021. Clients undertaking these checks fell within Financial Services, Legal, Tech and Consultancy sectors, where regulation is stringent. Each month we’ve seen new clients sign up.

The Results

Upon conducting these searches for our clients, themes of negative findings fell within:

• Inappropriate/undesirable content
• Sexually explicit content
• Hate and discriminatory behaviour
• Violent content
• Extreme views/opinions
• Undisclosed directorship

As well as highlighting risk categories from prospective and current employees, Neotas social media screening reports also revealed positive indicators, such as an individual’s charitable work and volunteering roles.

The Outcome

For our clients, these findings can make or break the decision to bring a new hire into the team, or raise new information about a current team member.

Three per cent of red flags raised by Neotas’ social media screening resulted in businesses withdrawing offers from candidates due to concerns about their online behaviour. Although a small percentage, it highlights the reassurance that these searches can provide and enabled these firms to avoid  disruption to their workforce in the form of a dangerous or difficult employee.

More Information

To see how Social Media Screening can benefit your hiring process, get in touch – intouch@veroscreening.com or find out more: Social Media Search & Screening Services | Vero Screening

Download our recent social media screening case study here:

Neotas Social Media Background Checks and Social Media Screening

At Neotas, We understand the importance of conducting thorough and compliant Social Media Screening Checks, and our team of experts is dedicated to ensuring that the process is safe and reliable. Receive accurate and up-to-date information while complying with all relevant regulations, including GDPR and FCRA. Our advanced OSINT technology and human intelligence allow us to uncover valuable insights that traditional checks may miss.

Schedule a call today!

We highlight behavioural risks identified across social media profiles and the wider internet. Neotas supplements the background screening process. Learn more about how we can help you conduct social media screening and background checks in a safe and compliant manner.

Related Case Studies on Social Media Screening

• Online Screening Uncovers Explicit Content Before Onboarding A Senior Candidate
• Online Reputation Screening Of A Senior Manager Reveals Internal Confidentiality Threat
• Identifying Difficult And Dangerous Senior Managers through Digital Screening
• Name Change Hides Involvement With Fraudulent Activity
• Management Due Diligence Reveals Abusive CEO
• Pre Employment Social Media Screening Helps Firm Avoid Abusive Hiring Candidate

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• Social Media Screening Webinar — Vero Screening X Neotas
• Pre-Employment Background Checks and Social Media Screening – What NOT To Do
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Neotas Social Media Screening and Online Reputation Screening Services:

• Online Reputation Screening
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• Neotas Online & Social Media Screening Video

Why Corporate Background Checks Could Be The Key To Building Company Culture:

Armstrong Wolfe Conduct & Culture Summit

In April this year, Armstrong Wolfe held their Conduct & Culture Summit, inviting senior executives from global organisations to discuss and learn about conduct and culture. The summit featured a host of senior figures from international firms, industry experts, academic leaders and more. 

The core message of the three day event was how to build, sustain and nurture a prosperous culture within an organisation, while navigating the everyday challenges of running a business. With panels discussing leadership, threat management and governance issues, the event was undoubtedly a valuable learning experience for those in leadership roles. 

But what is culture? Why is it important for businesses? Let’s take a look.

How do you define culture?

We define culture as the way things get done on a day-to-day basis. It’s the heart of the business, the connection of the employees to the work and to their team members, it’s the management structure and much more.

It would be easy to dismiss it as an intangible, especially in industries that are so reliant on data to make decisions. This couldn’t be further from the truth. While it may be difficult to measure emotion, staff satisfaction has clear and direct links to productivity, profitability and overall firm performance.

Why is culture important?

A study by LSE found a strong link between positive employee emotion and firm performance. Higher levels of employee satisfaction typically meant more productivity, meaning a higher overall performance for the firm and thus greater profits. 

A similar report by the Harvard Business School describes the impact a positive and effective culture can have when measuring performance across an industry. The report suggests that having an effective culture can account for up to half the differential in performance between competing organisations. Staff wellbeing is a competitive edge.

Understanding People Is The Key – Putting Behavioural Science To Work

At the Conduct & Culture Summit, David Lean, Chair of the Association of Online Due Diligence (AFODD) joined David Grosse of HSBC, Helen Hughes-Green of Standard Chartered Bank and Pierre Pourquery of EY UK Capital Markets to form a panel of experts. Their panel, hosted by Armstrong Wolfe’s Maurice Evlyn-Bufton, Maurice posed the question – “can behavioural science deliver on its promises?”.

One of the core takeaways, perhaps, was the importance of elevating character alongside competence. Valuing a person’s behaviour and attitude alongside their skillset and aptitude.

They asked – how can we learn from behavioural science to create thriving, positive cultures within our organisations? Are these practices being considered enough or is there still more to do?

There is certainly a case for applying these theories to business practices like recruitment, onboarding and on-going monitoring of workplace culture.

What is crucial when analysing behaviour is helping people not make assumptions based on a limited amount of information such as a CV or skills based questioning, or the small number of interactions you may have had with a candidate to date. The important question to ask is does that information acknowledge anything to do with this person’s behaviour or is it purely skills assessment or box ticking?

Building and Protecting Culture

Building, managing and maintaining a positive atmosphere is a delicate balance. While superficial staff benefits may foster short term positivity, long term solutions are needed to ensure productivity is high and staff turnover is low.

When it comes to your people, if you want to establish a proper culture you have to understand what makes people tick, then build around it.

Proactive management of this situation can come in many forms. Two of the most effective ways to nurture this position are:

• Recruitment and onboarding – effective screening of a candidate’s character as well as their competencies to ensure that they are a) fit for the role and b) fit for your organisation and existing team members
• Reviewing existing personnel and practices – regular, critical reviewing of current culture and leaders to ensure that a positive atmosphere is being developed and teams are at their most productive

Proactively addressing these issues and avoiding poor decision making are critical in nurturing this situation.

Proactive Culture Management – Recruiting People, Not CVs

There is no substitute for effective screening when it comes to recruitment and hiring the right people.

When you follow typical hiring practices, you may go to an agency, receive and review a shortlist, interview, run traditional corporate background checks, then you’ve narrowed it down. 

On paper this person has the experience you were looking for, the skills to thrive in the role and looks like they have all the attributes to succeed. What you may not know is they have an explosive temper, they spend every evening sharing explicit content on the internet or boasting about doing drugs on the weekend. The person is not the cv and cannot be found in traditional background checks.

Existing teams and structures should also be considered in hiring decisions. Having invested time and resources into building a comfortable culture, the wrong new hire could be like a grenade to that space. 

The impact of making a bad hiring decision isn’t restricted to just the costs associated with the recruitment, hiring and eventual removal of that individual. Loss of productivity, lack of leadership and staff turnover could all contribute significantly to financial and cultural damage within the organisation.

Enhanced screening of candidates including social media and online reputation screening will help inform decision makers with real world data. While we have established it’s difficult to quantify emotion, online data can now be used to interpret more of a person’s character by assessing it against real-world risk indicators: violence, anger, explicit content, discriminatory behaviour and more. 

“Why is it that in existing corporate background checks, we only ever check new hires for the sort of behaviours that affect work? We don’t check for the sort of behaviours that affect culture and most industries don’t screen their existing staff” David Lean, Chair, AFODD

Proactive Culture Management – Internal Review

Consistent review of existing staff and practices is another tool to use to help build strong corporate culture. While making the wrong new hire could impact teams negatively, it’s important to consider internal risks as well.

If staff turnover is high, then look for the consistent piece of the puzzle. Is the leader of a team still there but his juniors are regularly leaving? LSE found that employee satisfaction to have a substantial positive correlation with customer loyalty and a substantial negative correlation with staff turnover. It’s easy to screen new staff but not always considered that the issue could be coming from within.

For industries regulated by the FCA, Senior Managers undergo scrutiny as part of the SMCR Fit & Proper Test. The annual test assesses whether senior managers are fit for their role and can include a review of their honesty and integrity.

The Bottom Line – Using Resources Properly

Annually, firms spend millions to encourage workplace culture, often overhauling every few years to realign to company beliefs or correct the damage of a bad decision. What if that money could be saved? What if we could stop the rot from the inside out?

Using what we can learn from behavioural science could play a crucial role in halting this cycle. Understanding people and their suitability, not just skills and competencies will help inform good decision making. 

For recruitment, effective screening using all of the data available will lower the risks of a bad hire and the negative repercussions that come with it. In this case, the potential momentum that is lost for internal teams is just as significant as the person who comes in and destroys it. The bad egg will be removed eventually but it’s hard then to build a sense of calm and unity in a team that may have faced significant disruption.

When it comes to screening internal teams, it’s easy to see how this principle could be extended to other industries beyond financial services. Firms regularly reviewing senior management are more likely to spot opportunities to optimise organisational structures and minimise threats before they are damaging.

If you would like to discuss online reputation screening, corporate background checks or senior management screening with our team, please schedule a call here. 

Neotas Social Media Background Checks

With Neotas, you get a holistic view, uncovering hidden risks, and ensuring compliance. We navigate cultural nuances and evolving trends, providing you with invaluable insights.

Our cutting-edge AI based Social Media Checks and Social Media Screening solutions, backed by human expertise, ensures comprehensive and accurate screening with zero false positives.

Ready to experience the future of social media checks?

Schedule a call today and let’s revolutionize your social media checks together!

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Tags: Background Checks, Social Media Checks, Social Media Screening, Pre-Employment Screening, Online Screening, Social Media Check

COVID-19 Impact Leads To Increased Fraud Risk :

What Impact Has Coronavirus Had On Enhanced Due Diligence?

In what’s been a year like no other, we have seen the significance of the impact of the COVID-19 pandemic on all aspects of the business world. 

Many traditional business practices have been completely overhauled as global restrictions introduced huge limitations on travel, face-to-face meetings and office based working.

With uncertainty, comes risk. As organisations have been forced to adapt and evolve with the changing environment, the opportunity for risk becomes even greater.

There’s never been a more crucial time for having the full picture in front of you than right now.

Impact of COVID-19 on Due Diligence

The unprecedented nature of the last year means that it can’t be considered a typical year for most institutions. While some industries may recover quickly, others will face a longer road back to normality. As a result, the impact of “the new normal” on a business may need to be adopted as part of reasonable due diligence processes.

Making matters more tricky is the inability to offer in-person visits or assessments due to social distancing restrictions. With more checks being completed virtually, firms are now considering all of the tools at their disposal to get a full understanding ahead of a deal.

In a recent guide to the changing nature of the due diligence process during COVID, Deloitte shared a number of useful tips to look out for:

• It is important to remember confidentiality issues: Due Diligence processes are sensitive and require confidential data handling
• Engage and access the right people: Information that comes quick and in a good quality is essential

Here, Deloitte highlight the importance of using third party due diligence providers to ensure confidentiality and quality of information. While the landscape keeps changing, cutting corners will only increase the risk of foul play.

Global Uncertainty Sees COVID Fraud Risks Soar

The disruption and uncertainty of a global pandemic is a potential breeding ground for fraudulent activity. The ongoing unpredictability of the situation makes it harder to spot unusual activity as businesses are forced to improvise.

KPMG’s Fraud Barometer signalled that although the overall figure for reported and tried fraud cases dropped in 2020, there is a “tsunami of fraud” on the way for 2021. This all comes as the court systems attempt to catch up with the backlog of cases.

Opportunistic attackers have taken advantage of the uncertainty, particularly of the dedicated coronavirus support on offer to businesses. 

In December 2020, figures published showed that over £45m in “bounceback” loans had been granted to businesses by the lenders, underwritten by the UK government. Early conservative estimates suggest at least 1% of these loans were taken out fraudulently. With repayments due to begin from April 2021, the true figure will be revealed soon.

PwC have reported a spike in false positives for financial institutions, as their software learns to deal with the changing circumstances. Even compliance systems with machine learning capabilities are struggling to adjust to what would appear to them to be unusual behaviour. This makes filtering out the real red flags even more difficult.

Organisations are under increasing pressure to make decisions first and ask questions later, as they evolve with the changing landscape. It’s easy for business practices like supplier controls to be bypassed and important due diligence questions missed. 

Internal COVID Fraud Risk On the Rise

Over the past year, we have provided thousands of open source background screening checks as part of our enhanced due diligence services. While every case is different, and confidential, we have noticed data trends suggesting activity such as internal fraud is on the rise.

A recent case of operational due diligence uncovered fraudulent activities with two parties trading internally to inflate their books. Our deep web network analysis uncovered links between the companies including shared directors. Trading was taking place in a perceived effort to inflate their books as a way to appeal to potential investors.

With the true financial impact of the pandemic still being felt worldwide, businesses are seemingly turning to illegitimate practices in order to stay viable. 

Fraudulent behaviour continues to thrive during COVID with our due diligence data suggesting there are two clear trends:

• Existing fraudsters continue to operate, with opportunistic attackers looking to exploit the current uncertainty
• Traditionally sound companies are being forced to improvise – sometimes resulting in fraudulent behaviour

Post-COVID Risk Management

So how can businesses manage the ongoing increased risks in a post-COVID world?

It’s fair to expect some changes to business practice to be intermediary, while some will be around in the longer term. Ensuring staff are aware of the heightened risk is a start, with clear education about the different opportunities for fraud or non-compliant behaviour.

Adapting risk assessments to reflect “the new normal” and to adopt some of the virtual tools that have likely been introduced is another important step.

But what about detection? What can be done to identify risk?

The key is to ensure businesses are using ALL of the assets that are available to them. 

KPMG have highlighted the need to adapt due diligence processes to the changing landscape. They flagged the importance of using publicly available information sources as part of their recently shared Differentiated Diligence document. The report suggests supplementing existing due diligence practices with new technologies to reduce risks. Social media is suggested as one of the key differentiators for effective due diligence post-COVID. 

In a world where you can’t meet people face to face, tools that help uncover the history, behaviour and attitudes of the people you’re dealing with become more crucial.

Our enhanced due diligence services combine machine learning, AI and human analysis to eliminate false positives. Using only publicly available data, we’re able to paint a full picture of the “people risk” of any deal.

Arrange a call with our team today to discuss your business’ changing needs due to COVID.

The Truth About Social Media Screening and GDPR

One of the most common questions we get asked is how our searches comply with GDPR. In particular, there are always questions around privacy, data protection and social media screening. Our searches are fully compliant and are always updated to reflect any changes in regulations – but questions are always asked once social media is added to the checking process.

Here’s some common questions we get asked:

• Do you need consent under GDPR to run these checks? 
• Are social media checks common practice?
• Can the candidate see their report?
• While I need to manage risk / comply with regulations, I don’t want to be intrusive…

Here’s a breakdown of current regulations, the risks of running checks internally and tips on how to stay compliant.

International Social Media Screening

Social media screening as part of background checking has existed in some form since the platforms began and recent studies suggest their deployment is only going to increase.

The US government introduced a new visa procedure in 2019 which demands foreign visitors applying for working visas to disclose their social media accounts on their applications. They see social media as a reliable and valuable way to review a person’s behaviours and attitudes, beyond just database or box-checking exercises.

The US has so far been at the forefront of driving social media background screening to becoming commonplace for high risk roles. Recently, the armed forces screened their troops ahead of the presidential inauguration and the Washington police chief is suggesting they do the same for their officers. 

With the use of social media screening growing, the need for a consistent, regulated approach is obvious.

What are the data protection laws when it comes to social media?

Data protection laws are different all around the world, so the complexities change depending on the jurisdiction. The EU, for example, takes data protection very seriously and in 2018 brought in the GDPR.

We’re all familiar with the basic ins and outs of the GDPR by now and the hefty fines that can be given out for breaking these guides.

Specifically relating to social media, the GDPR states that employers should notify candidates before viewing their social media accounts unless they have a lawful basis for processing data – such as consent or legitimate interests. It goes on to state that employers should only take into account data that is relevant to the role.

Article 29 of the GDPR (5.1)

As a third party background screening provider, at Neotas we have “legitimate interest” to perform these checks for business purposes, as requested by our clients. Our reports only include role-related risks and our policies are consistently updated to reflect changes in legislation.

Many data protection authorities have supplemented the GDPR guidance with additional advice in relation to social media screening. This can include:

• Screening to be conducted as late as possible in the recruitment process (to avoid the opportunities for human bias)
• Candidates should be made aware of any screening that will take place and how it will be conducted
• Only accessing publicly available information
• Screening levels being proportionate to the seniority of the role

The overall guidance here is clear:

• Only review relevant, role-related data
• Ensure that protected characteristics remain protected
• Only process data if you have a lawful basis for doing so

The Risks of Internal Social Media Screening

The risks that come with carrying out social media background checks in-house are significant. By combing through a candidate’s social media accounts, protected characteristics (such as race, sexuality, political stance) are unintentionally revealed to internal staff. 

Whether intentional or not, it’s both illegal and unethical to make hiring decisions based on these characteristics. Internal staff are left exposed to potential accusations of unconscious or discriminatory bias, accusations that could prove costly in any legal proceedings. It would be difficult to legally argue that discriminatory bias hadn’t taken place if staff were exposed to personal data for potential new hires.

Using Third Party Background Screening Providers

Using a third party background screening provider is the best way to avoid these risks and the financial or reputational damage that can come with them.

While they may mean well, internal staff are less likely to be trained in data handling and may be less aware of the stringent GDPR practices that must be followed.

Third party providers like Neotas are externally audited, regulated by industry standards and often hold external certification to process sensitive data. At Neotas, we are:

• GDPR certified ISO27701
• IASME certified
• AFODD certified 

Alongside the technical certifications, third party background screening providers are completely objective. Providers like Neotas have zero hidden agendas and we only ever present relevant, role-related risks in our reports. Our role is to demonstrate that the candidate meets the level of honesty and integrity expected of their new position.

Lastly, the technology used is cutting edge, capable of processing data at hugely efficient speeds. Our AI and machine learning technology processes vast quantities of data, highlighting potential risks before context is applied by objective human analysis. This way, protected characteristics remain protected and candidates need not worry about their new employer seeing old holiday photos.

You can find out more about pre employment social media screening, or online reputation screening here. Alternatively you can build a no-obligation quote using our brand new pricing tool.

Download our recent social media screening case study here:

Social Media Background Checks – Do’s & Don’ts for Employers

Neotas Social Media Background Checks and Social Media Screening

At Neotas, We understand the importance of conducting thorough and compliant Social Media Screening Checks, and our team of experts is dedicated to ensuring that the process is safe and reliable. Receive accurate and up-to-date information while complying with all relevant regulations, including GDPR and FCRA. Our advanced OSINT technology and human intelligence allow us to uncover valuable insights that traditional checks may miss.

Schedule a call today! We highlight behavioural risks identified across social media profiles and the wider internet. Supplements the background screening process. Learn more about how we can help you conduct social media screening and background checks in a safe and compliant manner.

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Neotas Social Media Screening and Online Reputation Screening Services:

• Social Media Background Checks
• Online Reputation Screening
• Social Media Screening
• Social Media Check
• OSINT Framework, OSINT Tools, OSINT Techniques, and how to use OSINT framework.
• Follow us on LinkedIn for the latest updates on Neotas Screening Solutions.

What Did We Find In 2020

Risks hidden in plain sight 

2020 proved to be a truly remarkable year globally, with all industries feeling the impact and repercussions of the pandemic. Throughout the year, we provided thousands of objective background check services, from pre employment background screening through to a host of third party due diligence services.  

While the exact results of course remain strictly confidential, here’s a sneak peak into some of the data trends and highlights from an unprecedented year. 

What is included in a background search? 

First of all, let’s establish what’s included in our searches. Our background check services scour the web for an individual or organisation’s full digital footprint, from surface level through to the deep web. 

Standard background checks like DBS checks can be limited to just checking databases, while we go a step further and leave no stone unturned. For HR & Recruitment purposes our pre-employment background checks can look into employment and education histories, criminal activities and social media screening. 

A Neotas third party due diligence search often includes all of the above, plus checking against international PEP & sanction lists, investigating business networks and a host of anti-fraud checks.  

Whether it’s cross referencing employment data with digital records, or assessing international networks or criminal links, there’s no time or jurisdiction limit on our searches. 

How are we able to search for this? 

Our enhanced due diligence methods combine proprietary AI technology with machine learning and expert human analysis. We’re able to identify business risks that wouldn’t appear in other searches. 

Simply put – we process more data, from more sources than traditional searches.   

 So what did we find in 2020? 

To be brief – a lot.  

Nearly a third of cases through 2020 uncovered medium-high risk behaviours, warranting further investigation. So what types of behaviours do these include? 

• 3-5% display red flags
  Red flags highlight high-risk behaviour for serious indiscretions such as inappropriate or sexually explicit content, substance abuse, violence, racism, PEPs or previous sanctions.

• 20-25% display amber flags
  Amber flags refer to medium-risk behaviour that may be inappropriate, but needs further investigation. Such as: employment or education inconsistencies, adverse media, undisclosed directorships.

• 70-77% display green flags 
  Green flags return no obvious indiscretions. These cases are verified and the suitability of the candidate or deal is confirmed. 

What is Red Flag Behaviour? 

Up to 5% of cases displayed what is determined as a serious, or red flag, risk. Neotas searches all publicly available data from financial & tax records to social media accounts. As a result, red flags can vary from serious undisclosed financial conduct to consistent patterns of discriminatory behaviour. 

Our recommendation would always be to investigate these behaviours further and likely take action to lower the risk of financial or reputational damage. 

Download the full report to reveal the most common red flag behaviours. 

Headline Cases 

 We would never reveal exact case details and all of our reports are held to the highest data protection standards. These are some anonymised examples of the types of the most serious cases discovered in 2020: 

• A founder CEO who boasted about having defrauded his public sector client and threatened exiting staff with violence 
• A COO who needed to be removed for consistent racist and misogynistic abuse of staff  
• A founder who rewarded their salespeople for dirty tricks against clients by sharing cocaine 

What is Amber Flag Behaviour? 

Up to 25% of cases displayed consistent behaviours that could pose potential risks to businesses or individuals. While not all of the behaviours flagged here lead to further action or qualify as red flags, our human analysts apply context to the findings and highlight those that warrant further investigation. 

Although an amber flag may not appear as serious as a red flag, they still pose serious potential risks. The most commonly flagged behaviours include employment inconsistencies, links to explicit content and undisclosed directorships – all of which come with the potential to escalate into a costly or damaging situation. 

2020 Insights & 2021 Predictions

While global restrictions remain in-place and business interactions become more digitised, effective verification and vetting processes have never been more critical. With due diligence requirements also continuing to change year-on-year, it’s crucial to stay ahead of the curve and use all of the resources available. 

Vero Screening recently published their predictions for employment screening trends in 2021. They predict that social media background checks in particular will become a critical part of the screening process as the workplace become less familiar amidst the ongoing restrictions.

In 2020, nearly a quarter of cases reviewed highlighted a potentially serious business risk, so the need for thorough checks is clear. Third party due diligence and employment background checks lower risks by being both objective and comprehensive. Only with this added security, can a business move forward with an investment or potential new hire with confidence and peace of mind. 

We would love to chat to you about your enhanced due diligence, investment risk management or social media screening needs, please feel free to schedule a call here. Alternatively, you can build a no-obligation quote using our pricing tool here. 

Download the full 2020 Annual Report:

“Fraud and deceit are anxious for your money. Be informed and prudent”.

– John A. Widtsoe

International Fraud Awareness Week

Neotas have joined the global effort to minimise the impact of fraud by being a supporter of International Fraud Awareness Week (IFAW). IFAW, or Fraud Week, is celebrating its 20th anniversary this year and is organised annually by the ACFE, the world’s largest anti-fraud organisation. 

Throughout the week, supporting organisations and individuals share resources and engage in conversation online, in an effort to proactively fight fraud and help safeguard businesses from this growing problem.

Rise in Fraud Cases

In their 2020 Report to the Nations, the ACFE compiled data from 125 countries to help explore the costs, schemes, victims and perpetrators of fraud. Alarmingly, amongst their findings they discovered that companies lose an estimated 5% of their revenue annually due to fraud. 

A recent BBC investigation also highlighted how fraudsters had hijacked the government’s Bounce Back loan scheme, resulting in potential taxpayer losses of up to £26bn through fraud, organised crime or default.

*The ACFE, Behavioral Red Flags of Fraud, 2020

Anti-Fraud Measures

The ACFE’s Report to the Nations (2020) found that just 12% of fraudsters are being caught and convicted. As a result, it’s important to identify robust, future proof tools for trying to safeguard businesses and individuals from the risk of fraud. 

Alongside internal measures like employee training and procedure updates, effective background screening can play a crucial role, whether it’s pre or post employment, or as part of due diligence checks. This is where the power of OSINT comes in.

Enhancing Existing Searches

Search engines reveal just 4-6% of available data, while traditional background checks like DBS or credit checks are limited by their very nature, they only identify whether a subject appears on a set of specific databases. Our OSINT specialists are able to scour 100% of open source data in over 200 languages, leaving no stone unturned.

Using a combination of machine learning, AI and human analysts, Neotas are able to identify “red flags” for fraudulent behaviour within a matter of days – potentially saving individuals or organisations from the risks and harmful nature of fraud.

Through Enhanced Due Diligence, we recently uncovered a subject who had hidden a past conviction for fraud worth over $50m. Having changed their name and moved to the UK, they had escaped traditional customer due diligence but by supplementing these checks with OSINT, we found a network littered with criminal ties, bribery and corruption. Only through these insights were we able to help protect our client and their business.

Working alongside traditional checks, these enhanced methods guarantee to paint a full picture and lower the opportunity for fraudsters to take advantage. Get in touch with our experts if you would like to know more. 

_______________________________________________________________________________

Our team of experts have continued to educate themselves on the latest anti-fraud measures, including taking part in seminars throughout the week and competing against each other with the Fraud Week trivia quiz. 

Fraud Week Trivia

To support Fraud Week, we posted daily trivia questions through social media using the official hashtag #FraudWeek:

• 89% of responders answered correctly that 5% of revenue is lost annually to fraudulent behaviour
• Two-thirds of responders knew that 54% of organisations don’t recover any financial losses when falling victim to fraud
• Nearly 75% of responders believed that strengthening internal controls would reduce a fraudster’s opportunity to commit fraud
• Just 27% of responders knew that 39% of fraud is detected through tips, with the remaining answers all opting for lower percentages
• When it comes to identifying fraudulent behaviour, a quarter of responders felt that missing funds was the key indicator, while the remaining majority believed it to be a combination of missing funds, lack of policies & procedures and missing documentation

Based on the results, responders overwhelmingly recognised the financial impact of fraud. The results were more varied when it came to identifying fraudulent behaviours and the ways to prevent them moving forward. What is clear is the need for the continued development of future-proof anti-fraud measures like training and robust, technology-driven background screening.

We’d like to say a big thanks to everyone who took part.

For more resources and more information on Fraud Week, you can head here. 

#FraudWeek #OSINT #DueDiligence

Pre-employment Checks, What Should You be Doing in 2021?

“83% of hiring individuals have found candidate discrepancies on both CVs and job applications”.

Hire Right, 2020

 

With Covid-19 still prominent and our country facing a looming recession, businesses are facing unprecedented times. It’s more important than ever as we near 2021 that for those companies lucky enough to be hiring, only the best candidates reach the final stages of application.

Until now, pre-employment checks have been carried out by dedicated in-house HR teams whose aim is to maintain engagement with the future employee throughout the process. Whilst this is a great way to be on first-name terms with an individual by the time they are hired, it can also be a time consuming process for an already stretched department. This can also sometimes lead to missing red flags that pop up throughout the pre-employment check process and lead to an unfavourable hire.  

“80% of the HR decision-makers we spoke to had admitted that they had employed an unfavourable candidate”

A review completed in 2018 here at Neotas concluded that 80% of the HR decision-makers we spoke to had admitted that they had employed an unfavourable candidate when carrying out the entire employment process in-house. What’s more, the individual hired had ended up costing the company an amount the equivalent of 23x their salary. This was calculated from a number of factors, including how high up the individual was within the company, how long their length of employment was, and also any paid training that was undertaken to further development. 

Not only do individuals cause a monetary loss to the company, but they can also damage a firm’s reputation. It is a difficult loss to calculate, though as we are in such a prominent digital age, any potential employee will be able to search online for honest workplace reviews of any firm. Potential employees can see discontent within these reviews and decide against applying. Current employees can also see these reviews which could run the risk of losing good members of the team due to the development of negative feelings, ultimately distancing themselves from the organisation and seeking employment elsewhere. Essentially the potential damage to a company’s profile could have been avoided by finding out more about the employee beforehand. A task which can be time-consuming for a small, in-house team. 

Another unfortunate outcome of hiring an undesirable candidate can be the reduction in the rates of productivity within the established team when faced with the introduction, and prolonged stay, of an unsuitable teammate. Thus diminishing levels of workforce morale overall and leading to more long-term damage at an unknowable cost.

How can individuals escape detection with a pre-employment check?

Although we may know as individuals that lying on an application form or in an interview is something we ourselves would never do, that’s not to say that many, many people don’t embellish on their applications. Even submissions from candidates that, upon first look seem glowing, can unfortunately be misleading and in many cases lead to a bad hire. In fact, leaning towards a candidate on gut instinct alone can increase the risk of a bad hire by up to a huge 50%.

Individuals can ‘improve’ many areas of their work and personal history during the application process to pass pre-employment checks. They undertake these amends for a number of reasons and are unfortunately not an uncommon occurrence today in the UK.

Qualifications

One of the biggest embellishments on C.Vs today is the alteration of qualifications or grades. This can range from ‘bumping up’ results to match the job specification, all the way to a complete fabrication of a degree. A notable example from 2012 is Yahoo CEO Scott Thompson who claimed to have a Computer Science Degree from Stonehill College. A college which did not include this particular degree in its course list at the time Thompson would have studied there. 

In the digital age we are in, potential candidates can now look to ‘purchase’ their qualifications online. Several online outlets offer the record of a physical degree, without the individual having to take part in an actual course. 

Work History

Another area which can be discreetly altered is the employment dates from previous roles. Candidates who may have had temporary roles or taken a career break early on can sometimes think that this may reflect badly on their work history and chances for future employment, especially if a minimum amount of years is required for a role. Candidates can also inflate their previous salary with a job title to match to give a better impression to a potential employer. Traditional in-house techniques can sometimes get to the bottom of these fraudulent claims, however by utilising an external pre-employment checks service, such as our Social Media Screening, we can dig even further to get you a full overview of the candidate, i.e. checking social accounts for previously listed jobs and showing the resulting discrepancies before you complete the employment process.  

Right To Work

Applicants can also agree that they have a right to work in the UK, when this may not be the case, leading to a penalty of up to £20,000 for the hiring company.   

Criminal Convictions

Often, simple driving offences can be left undeclared during the pre-employment process due to the individual being concerned it would eliminate them from the application process. When this eventually comes to light it can then affect the individual’s chances regardless due to their dishonesty at the time of interview. 

References

References can easily be falsified should the potential employee wish to avoid a new company contacting an individual who they may have had a difficult relationship with. An individual will then list friends or family members as references instead underneath their previous job history, however, It can be hard to investigate this thoroughly with a small HR team. 

Personal Affiliations

When submitting a C.V and cover letter, an individual discusses their work history and qualifications, describing how they apply to the job specification. For many individuals these are 100% truthfully written and in turn the potential employee may seem like the perfect person to hire. Perhaps one of the most difficult things to glean about a potential employee however is not within this document. This important element is; how their conduct will be during their time with the company, including outside of work, as a company representative as well as during business hours. Even after thorough business-related pre-employment checks have taken place it can give little indication of a potential employee’s outside affiliations. 

Knowledge of an individual’s online footprint can be hugely advantageous. This can give a thorough understanding of whether the person has engaged in online content that can be described as racist, sexist, homophobic or listed as terrorist activity. An outside-led enquiry can also investigate circumstances which may be questionable should they be going for a position within financial services. For example, several trips to blacklisted countries listed on their social profiles within a matter of months could be something the company wanted to investigate, but didn’t have the information initially in order to discuss.  

A recent case study we conducted for a client involved carrying out a social media screening on an individual who has passed through both traditional background checks as well as two interviews. After we completed the screening, the potential candidate was identified as being involved in football related violence and specifically involved in an attack on police officers. The individual was not only actively involved and promoting sexist, homophobic and racist content and personally attacking other individuals online, he also mentioned several class A drugs on his social media interactions. As a result, the person in question was removed from the application process and reported to Crimestoppers. The outcome could have been completely different had the HR team not contacted Neotas for the Social Media Screening.  

“A thorough report was provided with areas of concern and interest that we wouldn’t have found otherwise” – Partner, Executive Search Firm

What can you do to avoid an unsuitable hire in 2021?

A study in 2020 showed that over 63% of applicants that they checked had lied on their C.V. This included 23% in relation to qualifications and 37% editing their previous workplace details. Whilst this can be looked at by an internal HR team through pre-employment checks, the ability to uncover a potential candidate’s personal history outside of their employment is still beyond reach using traditional methods. Even a person who passes the standard background checks can be hiding information that could be potentially damaging to the reputation of a business, the results of which can affect a company of any size. Even CRB checks can only show UK crimes, they do not include instances that the individual may not have been convicted for, and they also do not cover behaviour that a hiring company will find goes against their ethos. 

This potentially damaging gap in the application process can be avoided simply by giving the hiring team a full picture of the individual in question. Neotas are experts in Social Media Screenings and offer a complete overview of a prospective candidate based on their online presence. The screening looks at individual candidates objectively and offers a summary of information which could affect your company should you choose to hire the individual. The screening is completely objective, removing the possibility of an unconscious bias and lets you make a completely informed decision during your pre-employment checks. It is due to this that we do not recommend conducting these searches yourself and instead outsource to a third party, as this research may lead to an unconscious bias being held by an individual based on lifestyle choices outside of work time.

“Many companies and HR professionals we speak to can’t believe that some of the stories we uncover are real. However, our checks are uncovering highly concerning factors on a daily basis. Sure, it’s only in a relatively small number of cases, but the risk is still severe enough to make it a real concern for anyone hiring in the next 12 months.” – Vipul Mishra, Neotas CEO 

We understand it can be difficult to justify the cost to senior members of a board, of bringing in an outside resource. However, put plainly, the real question is whether can they afford 4- 23x the salary of the individual they are hiring? 

Neotas can help you avoid monetary loss, reputation damage and a potential drop in team morale simply by carrying out social media and online reputation screening. 

Get in touch today and be ready to recruit with confidence in 2021. 

DBS Checks

5 Industries that Should be Doing More than a DBS Check

A Disclosure and Barring Service (DBS) check is a common way for employers to assess the background of a potential employee. Many jobs ask that employees undertake a DBS check to ensure they have a clean criminal record and will not be putting people that they work with at risk.

Industries in which employees are dealing with vulnerable people, and particularly children, however, should arguably be doing more than just a DBS check. These roles can involve positions of power and authority, and when working with vulnerable people, potential employees need to be properly vetted. While a DBS check is a good initial assessment, for certain industries it simply isn’t enough to know that an appropriate person is being hired.

What does a DBS check include?

A DBS check, formerly and often known as a CRB check, is a record of someone’s criminal record, including any convictions and cautions. There are currently four different types of DBS checks, depending on the level required from the employer:

Basic DBS check

A basic DBS check will show unspent convictions and conditional cautions on the applicant’s criminal record. If you are an individual applying for your own CRB check, this is the only one you can attain.

Standard DBS check

Most companies that require a CRB check will opt for a standard check, unless the applicant is working with vulnerable people. A standard DBS check reveals spent as well as unspent convictions, and any cautions, reprimands, or final warnings on an applicant’s criminal record.

Enhanced DBS check

This check covers all the same information as a standard DBS check, but the Disclosure and Barring Service will also contact local police for any information or encounters with the applicant they might deem appropriate to disclose.

Enhanced DBS check with barred lists

The fourth and most comprehensive check covers everything in an enhanced check plus will reveal if the candidate is on a list of people barred from working in a particular role.

What doesn’t a DBS check include?

1. All DBS checks are only valid for the country in which they are taken out. If the applicant has ever lived overseas and been convicted of a crime in that country, it will not show on a UK criminal record. Each country has their own system for running criminal background checks, and the employer would need to follow the proper channels within each overseas country to run a check on an applicant who lived there. Of course, if an applicant doesn’t mention living overseas, any convictions held in another country would never be known.

2. Another drawback of a CRB check is that they only cover convictions, not accused crimes. Many crimes, particularly sexual assaults, go unprosecuted. Some studies show that the prosecution rate of rape accusations are as low as 2% and sexual offences as low as 4% in England and Wales. Many of these assaults go unreported, and can be very hard to prosecute, resulting in such low figures. Someone accused but not convicted of a sexual assault will not have this show up on their criminal record or DBS check.

3. Most activity on social media is not included in a DBS check. While social media is a personal part of an employee’s lives, there can be occasion for it to be reported to the police, particularly in the case of online hate speech rhetoric, which can result in a criminal record charge. Much online activity flies under the radar, however, and is still something to be properly considered for someone’s background check.

4. A DBS check has no expiration date and is true at the time it is carried out. However, any activity post-assessment will not be included, so it’s usually requested anew for each job application. 

Which industries should go further?

A DBS check is of course a good idea for many professions, particularly those that deal with young and vulnerable people. But some of these industries should be doing more than even an enhanced DBS check. The five industries below are examples of jobs in which employees are in direct contact with vulnerable people, and the potential dangers a DBS check wouldn’t protect against..  

Taxi and minicab companies

Taxi and minicab companies are private firms whose employees have intimate access to their customers, as well as access behind a wheel. As a result, it is imperative to ensure not only that they are hiring competent drivers, but people with a clean criminal background with no prior inappropriate behaviour that could jeopardise the safety of the passengers. A taxi driver working for a private firm or company such as Uber or Ola should be properly vetted before customers get in a car with them. Many taxis may also be transporting people who are under the influence after a late night, making them particularly vulnerable. 

Currently, not all UK taxi companies require an enhanced check for applicants, as it can depend on the council laws. Uber has famously been under attack for the 3,000 allegations of sexual assault made by passengers in 2018, as well as incidents of crashes by drivers, some of which have been fatal. Could this have turned out differently?

An enhanced DBS check will reveal any convicted crimes or warnings, but there is other inappropriate behaviour that doesn’t fall under the definition of a crime that should consider someone ineligible for the role. Their Twitter feed may be filled with pornographic content or writing sexually explicit and inappropriate comments to women online. Neither of these actions are illegal or even banned from social media sites, but should deem someone ineligible to drive women and children around. They may also have a history of posting drag racing videos online and doing tricks in their car, which is certainly not the behaviour anyone looks for in a taxi driver.

Teaching and education

Anyone who works in a school where there are children and vulnerable young adults must undergo an enhanced DBS check for obvious reasons. This includes teachers, teaching assistants, and volunteer positions. 

Child safety is of the highest priority in a school, and checking the background of an applicant is important. However, as mentioned above, just because there are no convictions against a candidate does not mean there were no charges or situations. A more in-depth check into someone’s history could reveal crimes that were unable to be charged. These are particularly relevant if they involve children, sexual assault, Class A drugs, or violence. With the extremely low conviction rate for many of these crimes, DBS checks are not infallible.

Teaching applicants should also have a usual online presence in the world of social media. There have been many cases in the news of teachers getting into trouble for some of the posts online visible to the world; being overtly sexual, intoxicated, or political. Any online vitriol directed towards children should be paid particular notice, as it could indicate something more sinister.

Teachers are not encouraged to get involved in a romantic relationship with parents of the children, although it is not illegal. It’s possible a person may have left their previous teaching role due to that very reason, but would not disclose it, and would not turn up on a DBS check. Teachers and parents being involved in a romantic relationship can unfairly help or hinder a child’s progress in school, and create an uncomfortable environment. 

Social care

Social care is a very broad industry that can include taking care of young people, adults, the elderly, and people with a variety of disabilities. In such cases, making sure an applicant has a clean background check is vital for them to provide the right duty of care without putting patients at risk. An enhanced CRB check is required for jobs within the social care spectrum.

Things that could put this care of duty at risk beyond a DBS check could include a family history that indicates disruption within the family. A person applying for a social care role that does not have major access to their children, for example, does not bode well. Any applicant that has a history of making jokes about disabled people is completely inappropriate. The applicant may also have undisclosed crimes that they were accused of, yet never charged for. Any history of animal abuse or neglect, such as a pet that was taken away is also an indicator that the person is not suitable for the job.

Creches and childcare facilities

Anyone looking after children outside of the education system is required to have an enhanced DBS check. Childcare can include creches, nurseries, nanny positions, playgroup leaders, and childminding, and all involve children under the age of 16, usually without the parents’ presence. 

Looking after children is one of the most trustworthy positions of power, and those applying may have prior activities that make them unsuitable. A recently overturned law means that any minor youth offences, cautions, reprimands, and warnings need not be disclosed on a criminal background check. The controversial decision means that those with petty crimes in the youth are no longer discriminated against for future jobs, but could also mean that crimes relevant to a childcare position are overlooked.

Online activity, previous childcare positions and the reason for leaving, as well as family history, are all good indicators of a potential employee’s suitability to the role. An applicant may have spent time abroad teaching English as a Second Language, in which case a further background check would need to be undertaken.

Security services

Security services can cover everything from security guards at supermarkets and clubs, to bank security, university campus security, as well as protecting high ranking figures of authority. The job of a security guard or officer is to protect a person or property from damage, theft, fire, or other threats, enforce laws, and keep watch on anything suspicious or unusual. 

Security guards often interact with members of the public and therefore need to have a good demeanour and approachable air. They should be able to deal with situations swiftly and calmly in the case of something getting out of hand. Sometimes physical force or detainment is necessary when there is criminal activity suspected.

Because of the physical nature of a security guard’s job, a key thing to look out for is often a history of violence or violent behaviour. While this may not show up on a DBS check, the applicant may have an uncharged accusation, a family dispute, aggressive online behaviour, or a history of threatening people. This behaviour might be missing from their background check, but a well known trait about them. If they are often sharing videos containing violence or fighting online, this could be an indication that the aspect of the job they are looking for is the physical one. An overly aggressive person is not suitable for a job as a security guard, and could be a liability for the company.

These are just a few of the positions that should be doing more than a DBS check. This can apply to a number of jobs that work with children or vulnerable people, who are the most at risk. DBS checks are not foolproof, and do not cover a person’s background as extensively as they should within certain roles. 

Request a basic DBS check

Apply for a basic criminal record check to understand an individual’s unspent convictions and conditional cautions. Ideal for roles involving minimal contact with vulnerable groups.

Check someone’s criminal record as an employer

FAQs on DBS Checks:

What is a DBS check?

A DBS (Disclosure and Barring Service) check is a process that helps employers make informed decisions about hiring by providing information about a person’s criminal record. It involves searching an individual’s criminal history to ensure they are suitable for certain roles, particularly those involving work with vulnerable groups.

How long do DBS checks take?

The processing time for a DBS check can vary. On average, a standard check may take around 2 to 4 weeks. However, this timeframe can be affected by factors such as the level of check (standard, enhanced), the accuracy of the information provided, and the current workload of the DBS.

How long does an enhanced DBS check take?

Similar to standard checks, the processing time for an enhanced DBS check can vary. On average, it may take around 2 to 4 weeks. However, factors like the completeness of information and the current workload of the DBS can influence this timeframe.

Can I apply for a DBS check online?

Yes, you can apply for a DBS check online. The online application process provides a convenient and efficient way to submit the necessary information and receive the results electronically.

What is an enhanced DBS check?

An enhanced DBS check is a thorough background check that includes information about an individual’s criminal record, as well as any additional information deemed relevant by the police or other authorities. It is typically required for positions involving significant responsibility or work with vulnerable individuals.

Can I perform an enhanced DBS check online?

Yes, you can apply for an enhanced DBS check online. The online application process allows for the submission of relevant information, making it a convenient option for many individuals and organizations.

How does an enhanced DBS check differ from a standard one?

An enhanced DBS check provides more comprehensive information compared to a standard check. It includes details about an individual’s criminal history, as well as any additional information considered relevant. This level of check is typically required for roles involving higher responsibility or work with vulnerable groups, whereas a standard check provides basic criminal record information.

What is checked with a DBS check?

A DBS (Disclosure and Barring Service) check involves a comprehensive search of an individual’s criminal record history. This includes any convictions, cautions, reprimands, and warnings held on the Police National Computer. Additionally, an enhanced DBS check may include relevant information from local police forces and other authorized bodies, such as details of ongoing investigations or any other pertinent information that may impact the individual’s suitability for the role.

How far back does a DBS check go?

A DBS check provides a comprehensive overview of an individual’s criminal record history, including both spent and unspent convictions, cautions, reprimands, and warnings. The timeframe covered by the check is unlimited, meaning it can potentially reveal relevant offenses from any point in the applicant’s past, regardless of how long ago they occurred.

Can I do a DBS check on myself?

Yes, individuals can apply for a basic DBS check on themselves. This type of check provides a snapshot of an individual’s unspent convictions and conditional cautions held on the Police National Computer. However, for roles involving work with children or vulnerable adults, an enhanced DBS check is typically required, which necessitates the involvement of an employer or an authorized organization.

What do you need to pass a DBS check?

To successfully pass a DBS check, individuals must not have any relevant criminal convictions or cautions that would deem them unsuitable for the role they are applying for. The decision to proceed with an applicant’s employment is ultimately at the discretion of the employer, who will assess the DBS check results in the context of the specific job requirements and responsibilities.

What will fail a DBS check?

A DBS check may be failed if an individual has certain criminal convictions or cautions that are deemed incompatible with the role they are applying for. The nature and severity of the offenses, as well as the potential risks associated with the job, will be considered by the employer. Additionally, providing false or incomplete information during the DBS application process can also result in a failed check.

Does your criminal record clear after 7 years in the UK?

No, criminal records in the UK do not automatically clear after a specific period of time, such as 7 years. Once an individual has a criminal conviction or caution on their record, it remains there indefinitely unless specific circumstances apply, such as receiving a pardon or the conviction being overturned on appeal.

How long do crimes stay on DBS?

Criminal convictions and cautions remain on an individual’s DBS record indefinitely, regardless of the time that has elapsed since the offense occurred. This information is retained to ensure employers have access to a comprehensive overview of an applicant’s criminal history when making hiring decisions, particularly for roles involving work with vulnerable groups.

Do arrests show up on DBS?

Arrests, by themselves, do not typically show up on a DBS check. However, if an arrest led to a conviction or caution, those offenses will be included in the DBS record. Additionally, for enhanced DBS checks, relevant information from local police forces may be disclosed, which could include details about arrests or ongoing investigations, even if they did not result in a conviction.

What convictions are not protected?

In the context of DBS checks, certain convictions are not subject to filtering or protection rules, meaning they will always be disclosed on a DBS certificate. These include offenses related to violence, sexual offenses, safeguarding offenses, and any offenses committed against children or vulnerable adults. Employers may consider these unprotected convictions as relevant when assessing an applicant’s suitability for a role.

What offences are never filtered from DBS?

Certain offenses are considered so serious that they are never filtered or removed from DBS certificates, regardless of the time that has elapsed since the conviction. These offenses include, but are not limited to, murder, manslaughter, rape, sexual offenses involving children, kidnapping, and offenses related to terrorism. These convictions will always be disclosed to employers, as they are deemed highly relevant to safeguarding and public protection considerations.

How much does a DBS check cost?

The cost of a DBS check can vary depending on the level of check required and the organization conducting the check. As of January 2023, the Disclosure and Barring Service charges £23 for a basic DBS check and £40 for an enhanced DBS check. Additionally, some organizations may charge an additional administration fee to cover their operational costs.

How much does a basic DBS check cost?

As of January 2023, the Disclosure and Barring Service charges £23 for a basic DBS check. This type of check reveals any unspent convictions and conditional cautions held on the Police National Computer. It is important to note that some organizations may charge an additional administration fee on top of the DBS fee.

Can I start work before the DBS check is completed?

In some cases, employers may allow individuals to start work before their DBS check is completed, provided that appropriate risk assessments and safeguarding measures are in place. However, this decision is at the discretion of the employer and is typically dependent on the nature of the role and the level of risk involved. For positions involving work with vulnerable groups, it is generally recommended to have the DBS check completed before starting employment.

Can a job offer be withdrawn due to a DBS check?

Yes, a job offer can be withdrawn or rescinded if the results of a DBS check reveal information that the employer deems incompatible with the role or raises concerns about the applicant’s suitability. Employers have the right to make informed decisions based on the information obtained through the DBS check, taking into account the specific requirements and responsibilities of the position.

Can my employer see my DBS online?

No, employers cannot directly access an individual’s DBS check results online. The Disclosure and Barring Service provides the DBS certificate to the applicant, who must then share the results with their employer. Employers can, however, track the progress of the DBS application through an online system, but they do not have direct access to the results.

Does a DBS expire after 3 years?

No, DBS certificates do not have an expiration date. Once issued, a DBS certificate remains valid unless there is a change in the individual’s criminal record. However, some organizations may have policies that require employees or volunteers to renew their DBS checks periodically, typically every 3 years, to ensure they have the most up-to-date information about an individual’s criminal history.

What offences are never filtered from DBS?

As mentioned earlier, certain offenses are considered so serious that they are never filtered or removed from DBS certificates, regardless of the time that has elapsed since the conviction. These offenses include, but are not limited to, murder, manslaughter, rape, sexual offenses involving children, kidnapping, and offenses related to terrorism. These convictions will always be disclosed to employers, as they are deemed highly relevant to safeguarding and public protection considerations.

What convictions are not protected?

In the context of DBS checks, certain convictions are not subject to filtering or protection rules, meaning they will always be disclosed on a DBS certificate. These include offenses related to violence, sexual offenses, safeguarding offenses, and any offenses committed against children or vulnerable adults. Employers may consider these unprotected convictions as relevant when assessing an applicant’s suitability for a role.

What convictions are never spent?

In the UK, there are certain convictions that are never considered “spent” under the Rehabilitation of Offenders Act. These include serious offenses such as murder, manslaughter, rape, and offenses related to terrorism. Convictions that are never spent will always be disclosed on a DBS certificate, regardless of the time that has elapsed since the offense occurred.

Do arrests show up on DBS?

Arrests, by themselves, do not typically show up on a DBS check. However, if an arrest led to a conviction or caution, those offenses will be included in the DBS record. Additionally, for enhanced DBS checks, relevant information from local police forces may be disclosed, which could include details about arrests or ongoing investigations, even if they did not result in a conviction.

Neotas Social Media Check and Social Media Screening

At Neotas, We understand the importance of conducting thorough and compliant Social Media Screening Checks, and our team of experts is dedicated to ensuring that the process is safe and reliable. Receive accurate and up-to-date information while complying with all relevant regulations, including GDPR and FCRA. Our advanced OSINT technology and human intelligence allow us to uncover valuable insights that traditional checks may miss.

Schedule a call today!

We highlight behavioural risks identified across social media profiles and the wider internet. Supplements the background screening process. Learn more about how we can help you conduct social media screening and background checks in a safe and compliant manner.

Related Content on Social Media Screening, Background Checks, and Social Media Background Check

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Neotas use OSINT For Good to Support Environmental Investigation Agency

Neotas are proud to use OSINT for good (#OSINTForGood) to support and assist Environmental Investigation Agency (EIA) in their efforts to investigate environmental crime.

The recent report published by EIA highlights the threat towards Asia’s leopard population due to illegal killings in aid to meet the demand for their body parts. A number of Chinese pharmaceutical companies named in the report list leopard bone as an ingredient for their medical products.

“The illegal killing of leopards for their body parts in Asia is driving the species towards extinction. They have already disappeared from Laos, Vietnam and Singapore and are on the brink of extinction in several other countries. Demand for their bones, primarily from Chinese consumers, is one of the drivers of the trade. Leopard bone is used in similar ways to tiger bone, steeped in rice wine to produce health tonics and used in other traditional medicines.” – EIA, Bitter Pill To Swallow, March 2020

Our team of in-house experts used OSINT technology to map out the international links between potential actors involved in the trade. The EIA’s research aims to highlight the leopards rapid decline and the need to revisit certain trade regulations in place.

We’re proud to have been able to support EIA and will continue to spread their message and assist their work against this issue. The support comes as part of an ongoing mission for Neotas to join the worldwide community using #OSINTForGood, which also includes taking part in a global competition to help uncover missing persons information.

You can access the full EIA report here.

Over the Easter weekend a team of Neotas Analysts participated in the Tracelabs Global Missing Persons Capture The Flag competition. The aim of the competition is to use Open Source Intelligence (OSINT) to help locate missing people around the world. Information identified ranges from social media profiles to deep web documents and dark web databases, with more points scored depending on the relevance of the information. At the end of the 6 hours, the information is collated and sent to law enforcement to assist with their search.

With the competition hosted in Canada, the Neotas team worked between 11pm to 5am using a spectrum of investigative OSINT techniques to locate information relating to 15 different missing people. Each person was unique, with their own online presence, relationships, hobbies and story. One case led to social media profiles under a completely different name, whilst forum posts displaying personal and sensitive information were uncovered for another individual. In some cases, significant individuals were identified, including people with whom one individual had started talking online a few days before going missing. Previous addresses and vehicles were submitted, as well as information posted by strangers relating to the day the person was last seen. All of this information is useful to law enforcement in building possible leads.

At the end of the 6 hours, and after 168 submissions deemed beneficial to law enforcement, the team finished the competition in 7^th place. The top 10 finish is an incredible result in only our second global OSINT competition, and is an improvement on the 12th place finish in our debut. Other teams to feature in the top 50 included Cyber Security specialists, experienced hackers, leading private investigators and law enforcement officers. Each of the 177 teams used their skills to do OSINT For Good and have contributed to a very important cause.

A huge thank you to Tracelabs and all the volunteers for running such a successful event. Neotas will definitely be back next time, aiming for another top 10 finish and crucially another chance to assist law enforcement in bringing people home safely.

Ollie had a whale of a time competing in the latest Missing Persons #CTF with some of the @NeotasLtd team. Proud of the intel passed to law enforcement and of finishing 7th in a field of 177 teams. As always a massive thank you to @TraceLabs and all the volunteers #OSINTForGood pic.twitter.com/O1SDgoedq5

— Where is the OSINT Orca? (@NeotasOrcas) April 12, 2020

Online Reputation Screening

Avoid the cost of a bad hire with online reputation screening

Online reputation screening has become an essential component of the hiring process. It helps employers gain a comprehensive understanding of potential hires beyond what is presented in resumes and interviews. Using the full breadth and power of online reputation screening, we help companies make the right hire and open a healthy dialogue with employees about their behaviour online.

What is online reputation screening?

Online reputation screening is a pre-employment background check that scans a candidate’s full digital footprint, including social media background screening. Using publicly available data, we conduct OSINT-powered background checks to reveal the true character and behaviours of a prospective hire beyond a CV or traditional database checks.

Do’s and Don’ts of Online Reputation Screening

Do’s

1. Apply Social Media Policy Equitably: Implement your organisation’s social media policy consistently for both new hires and current employees. Allow new hires the opportunity for coaching and the chance to delete old posts that may not reflect their current behaviour or attitudes. This approach promotes fairness and gives candidates a chance to align with your company’s values.
2. Use Accredited Third-Party Providers: Engage an accredited third-party provider that adheres to relevant screening standards, such as POSS from AFODD. These providers are equipped to conduct thorough and unbiased checks, ensuring that the process is professional and compliant with legal standards.
3. Include Positive Flags: When conducting online reputation screening, it is crucial to consider both positive and negative indicators. A balanced view helps in recognising a candidate’s strengths and achievements alongside any potential risks.
4. Consistent and Structured Screening: Conduct online reputation screening as part of a consistent and structured background screening programme. Avoid ad hoc screenings; ensure that every candidate undergoes the same level of scrutiny to maintain fairness and consistency in your hiring process.
5. Inform and Obtain Consent from Candidates: Always inform candidates that open-source checks will be part of the screening process and obtain their explicit consent. Transparency in your screening practices fosters trust and ensures candidates are aware of what to expect.
6. Focus on Employment-Related Risks: Prioritise identifying employment-related risks, such as violent behaviour, sexism, hate speech, and discriminatory behaviour. These factors can significantly impact workplace safety and culture, making them critical to assess during the screening process.

Don’ts

1. Avoid Internal Social Media Checks: Do not conduct social media checks internally. This practice can introduce discriminatory bias and violate privacy standards. Internal checks are prone to subjectivity and can inadvertently lead to unfair hiring decisions.
2. Don’t Focus Solely on Negatives: Avoid concentrating exclusively on negative findings during the screening process. A balanced view that includes positive attributes and achievements provides a more comprehensive understanding of the candidate.
3. Don’t Lose Context: Maintain context when reviewing potential business risks related to employment. Understand the broader circumstances surrounding any flagged behaviour to avoid misinterpretation and ensure a fair assessment.
4. Don’t Rely on Candidates to Direct the Search: Candidates may have multiple aliases online, and relying on them to direct where to look can lead to incomplete or biased information. Use thorough and systematic search methods to uncover all relevant information.
5. Exclude Protected Characteristics: Ensure that any reports generated from the screening process do not include protected characteristics such as race, religion, gender, sexual orientation, or age. This practice is essential to prevent discrimination and uphold ethical standards in hiring.

Implementing these do’s and don’ts will help you navigate the complexities of online reputation screening effectively, ensuring a fair, legal, and comprehensive evaluation of potential hires.

Ensuring your organisation follows the rules above could lower your employment risks and help you avoid the cost of a bad hire.

We are an accredited provider of online reputation screening and adhere to the POSS standards as laid out by AFODD. We help organisations recruit with confidence and avoid bad hires by flagging employment related business risks.

Schedule a call with our team today to discuss your social media screening needs, or build a no-obligation estimate using our pricing tool.

Social Media Background Checks Do’s & Don’ts for Employers

Neotas Social Media Background Checks and Social Media Screening

At Neotas, We understand the importance of conducting thorough and compliant Social Media Screening Checks, and our team of experts is dedicated to ensuring that the process is safe and reliable. Receive accurate and up-to-date information while complying with all relevant regulations, including GDPR and FCRA. Our advanced OSINT technology and human intelligence allow us to uncover valuable insights that traditional checks may miss.

Schedule a call today!

We highlight behavioural risks identified across social media profiles and the wider internet. Neotas supplements the background screening process. Learn more about how we can help you conduct social media screening and background checks in a safe and compliant manner.

Related Case Studies on Social Media Screening

• Online Screening Uncovers Explicit Content Before Onboarding A Senior Candidate
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• Identifying Difficult And Dangerous Senior Managers through Digital Screening
• Name Change Hides Involvement With Fraudulent Activity
• Management Due Diligence Reveals Abusive CEO

Related Content on Social Media Screening, Background Checks, and Social Media Background Check

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• Social Media Check for doctors and healthcare specialists
• Social Media Check for Police Officers
• How Social Media Screening Benefits Our Clients
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• Avoid the cost of a bad hire with online reputation screening
• The Truth About Social Media Screening And GDPR
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• Social Media Screening Webinar — Vero Screening X Neotas
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Neotas Social Media Screening and Online Reputation Screening Services:

• • Social Media Background Checks
  • Online Reputation Screening
  • Social Media Screening
  • Social Media Check

OSINT Due Diligence: the new litmus test for investors

Private equity firms and investors are increasingly placing focus on management due diligence and the importance of understanding people, cultural fit and capability. Due diligence that harnesses open source intelligence (OSINT Due Diligence) unlocks more meaningful insights into teams and companies, informing business decisions and protecting the financial health and reputation of investors.

Private equity dealmaking is soaring to its highest level since the lead-up to the financial crisis, as companies chase investment opportunities for a record amount of $2.5tn. With so much at stake, it absolutely pays to know more in today’s digital era.

“Perceptions have been shifting slowly across the private equity investor world so that understanding management isn’t confined just to looking at top team personalities. Instead, managing risk and increasing value is seen to rest on harnessing all available data to inform business decisions, covering top executives, team effectiveness, organisational structures and processes, people capacity and capability in target/investee companies.”
Dr. Mike Hicks, Catalysis Advisory

People are the key to the success of any deal, with the long-term strategy and direction of the firm steered and shaped by management teams. Insights into the true behaviour, character and networks of those sitting at the helm of investee firms often sit in the public domain on the Internet.

For instance, in the case of the abusive CEO, we uncovered numerous behavioural red flags via open sources available for all to see. By flagging this to the private equity firm, the reputational risk was flagged before the deal, mitigating reputational risk and equipping our client with insights that would have otherwise been missed.

Private equity firms use our OSINT-powered due diligence to know who they’re dealing with, helping lower the risks. Protect and improve the reputation and financial health of your firm. Schedule a call with our team today to discuss OSINT due diligence, or build a no-obligation estimate using our pricing tool.

Pep Guardiola’s emails hacked :

Last week, it was reported that a man is being questioned by Greater Manchester Police for his alleged involvement in hacking Manchester City manager Pep Guardiola’s emails. A contractor employed by the club through an IT firm two years ago, he has claimed that the hack was “the easiest thing I’ve ever had to do”.

The IT worker claimed to have accessed Guardiola’s account from his mobile and downloaded personal emails, confidential transfer exchanges and his entire contacts book. He also allegedly trying to sell the emails for £100,000. Manchester City had terminated the services of the consultant and the company he was contracted to two years ago, but the story is breaking now.

Insider risk is real. We have previously uncovered insider fraud at a financial services firm, with a rogue IT worker attempting to sell client data on the dark web. Our findings were reported to Greater Manchester Police. Whilst we don’t know all the details of this rogue IT worker, it brings into light the importance of employee screening that harnesses online due diligence.

Oftentimes we find potential risks relating to employees through their online behaviour. The likelihood is that if the rogue IT worker is bragging in real life, his behaviour will be mimicked online, perhaps even through multiple aliases. Online reputation screening would have potentially flagged this behaviour sooner.

We hope that this doesn’t happen again and that it has triggered proactive measures by Manchester City and the IT firm to use online reputation screening. If so, it should be carried out to the Personnel Online Screening Standard (POSS) as laid out by the Association for Online Due Diligence (AFODD).

Get in touch today to strengthen your employee screening processes and protect your firm’s reputation.

Regulators now require OSINT – what next for AML and CDD?

The regulators have called for the use of open source internet and social media checks (OSINT) in anti-money laundering (AML), enhanced customer due diligence (CDD) and conduct surveillance measures. So, if the regulators require OSINT – what are financial institutions doing to meet these regulatory guidelines?

The European Banking Authority states that enhanced due diligence (EDD) measures include “carrying out open source or adverse media searches” [EBA, p.2]. By using OSINT, banks can build a more complete customer profile, including the source of the customer’s wealth and information on any associations the customer may have in different jurisdictions.

OSINT can also bridge the gap when dealing with PEPs and high-risk customers, according to the FCA’s Financial Crime Guide “using, where available… open source internet checks to supplement commercially available databases.” [FCA, p. 186] OSINT analyses all publicly available information on the Internet and should be used to complement existing processes. This is a mean feat for in-house teams, which is where technology helps.

Our unique blend of OSINT, machine learning and natural language processing enables us to dig deeper and faster into people, entities and networks. Coupled with advanced analytics and deep industry expertise, we provide zero false positives and complete customer profiles.

The use of OSINT stretches beyond customers. In the US, FINRA have highlighted its use in conduct surveillance and monitoring employees. “Monitoring traders, registered representatives, employees…structured data and unstructured data…social media profiles and other communications”. [FINRA]. Here, OSINT and social media screening can pinpoint people risk faster, for instance by uncovering aliases and cached data, helping to protect firms in the digital era.

Financial institutions use our open source enhanced due diligence to strengthen their compliance programmes. Make sure you have a defensible position back to the regulator.

Schedule a call with our team today to discuss OSINT due diligence, or build a no-obligation estimate using our pricing tool.

Locating Missing People: A Crowdsourced and Global Use of OSINT

At the beginning of February, Neotas Analysts took part in a global competition in which they contributed to active global missing persons investigations. They joined a community of 140 teams of OSINT practitioners from around the world, ranging from law enforcement officers to threat intelligence analysts and information security bounty hunters, in a Capture-the-Flag event organised by TraceLabs.

With the competition hosted in Canada, it meant snacks and energy drinks were at the ready for a 6-hour nocturnal challenge as the team set out to gather intelligence on 7 live missing persons cases from Canada, USA and Australia. Points were scored for any information which could lead to the location of the missing person, including social media profiles, IP addresses, activity on the dark web, recent friends and associates, unique identifiers, and geolocation of activity.

The event was a fantastic way of harnessing both the skills and curiosity of experts in the field in a concerted effort to support law enforcement teams often lacking in resources. Over 6 hours, hundreds of participants submitted pieces of intelligence which could be collated and passed on to law enforcement to aid in their investigations.

Finishing in 12^th place out of 140, we are thrilled to have contributed to the collection of valuable intelligence and finishing so high up on a leaderboard which was full of OSINT specialists from around the world was an added bonus. Our team made over 120 submissions to the event total of 5000+ – a record total amount of submissions from such an event and a significant achievement from a volunteer-run challenge.

We are proud to see yet another application of #OSINTForGood and its community growing so quickly. Thank you to TraceLabs for putting on a very worthwhile and successful event, we will see you at the next one!

Orla is full of pancakes and taking a well earned break – but can you tell us where she’s gone? #Osint #Geolocation #Verification #CTF pic.twitter.com/Hnr9A6cdmv

— Where is the OSINT Orca? (@NeotasOrcas) February 26, 2020

Social media screening in the spotlight after government controversy

Social media background screening is again in the spotlight after the latest controversy involving a UK government official. The UK Government is once again under scrutiny for its hiring and vetting process, following the “reprehensible” and “racist” comments online of Downing Street adviser Andrew Sabisky.

Online reputation screening and social media background checks remain absent from the official public sector hiring guidelines. As a result, high profile, avoidable controversies such as this continue to crop up. With the likelihood being that there are still unsavoury comments out there in the public domain, waiting to be found – surely, it’s time for governments to introduce social media screening to its background check policies?

Mr. Sabisky, who has since resigned as the PM’s top aide, recently prompted fury with his views on eugenics, race and women. In 2014, he wrote that to stop unplanned pregnancies from creating a “permanent underclass”, there should be legal enforcement of contraception. His comments online also suggested that black Americans had lower IQs than white Americans.

Ian Lavery, the chairman of the Labour Party wrote in a letter to the PM, “there are unanswered questions about how someone with such abhorrent views was ever considered for employment in the first place.” The spotlight is now focused on the Government, with their recruitment and vetting processes very much in question. Business minister Kwasi Kwarteng has also stated that the Government’s hiring process should be “looked at”.

It is no surprise that when unsavoury comments are discovered online, the reputational damage and public outcry can be huge. As we’ve stated before, a proactive attitude towards online reputation screening could have mitigated risk from the outset and informed the hiring process.

Our message to any employer would be that if it’s out there for all to see, wouldn’t you want to see it first? We just hope the Government seriously considers online reputation screening, following the footsteps of the Federal Government in the US.

Online Reputation Screening should be provided by independently accredited providers to ensure it is conducted in a legal and compliant manner, such as those accredited by the Association For Online Due Diligence (AFODD). Only employment-related business risks should be flagged such as terrorism, violent content, and hate and discriminatory behaviour. Online reputation screening helps firms to recruit with confidence and gives employers the opportunity to open up a healthy dialogue about their behaviour online.

If you would like to know more about social media screening, please feel free to schedule a call with our team here. Alternatively, you can build a no-obligation quote using our pricing tool here.

Guide for SRA-regulated firms: Offensive Communications Online:

As our online and offline personas increasingly converge, the spotlight is being shone on law firms and the online behaviour of their members. The SRA has recently updated its guidance, warning “the same ethical obligations of professional conduct apply in an online environment”. We take a look at what this means in practice and how law firms can ensure compliance today.

What online behaviour is offensive?

The SRA has experienced a significant increase in the number of complaints concerning inappropriate communications, including the use of social media inside and outside of practice. The regulator expects professionals to “behave in a way that demonstrates integrity and maintains the trust the public places in you and in the provision of legal services”. Examples of the type of behaviour they have investigated (and referred to the SDT) include hate and discriminatory behaviour, the use of derogatory language, sexually explicit comments and abusive comments directed towards other firms or clients. The list goes on.

Who is at risk?

Managers of firms hold the responsibility to ensure that their members do not cross these lines. SRA-regulated firms “must take all reasonable steps to ensure that the firm complies with [our] regulatory arrangements”, including “identifying, monitoring and managing all material risks to the business”.

If a member of your firm sends or posts an inappropriate or offensive communication, it not only puts you at risk under the SRA Principles, but it also has the potential of causing significant reputational and financial damage. For example, if clients react by withdrawing their business or are deterred from instructing your firm. In some circumstances, you could also be liable for your employee’s actions if the communication amounts to victimising or harassing a third party.

How can you ensure compliance and mitigate risk now?

1. Put a social media policy in place

There is no one-size-fits-all approach here. You should ensure you have a policy that feels in line with company culture as well as ensuring compliance and best practice. Also, consider the nature and size of your firm to determine whether you need to put further systems or controls in place.

2. Only identify business-related risks

Only posts that fall within agreed risk categories should be captured and reported on, which would typically include issues such as racism, sexism, illegal activity, or anything that could bring the firm into disrepute.  By ensuring a robust approach to checks it will now be easy to ensure that new hires, promotions and scheduled reviews can all be screened quickly and any risks will be highlighted without becoming intrusive.

3. Make use of technology and trusted third parties

Here technology can help. Don’t spend significant time internally trying to monitor as you will not be efficient or compliant and will undoubtedly review content that you don’t want or need to see.  A trusted third party will save you time, ensure you only see business-relevant information and will deliver an auditable, robust process that will meet the Regulator’s expectations.

4. Beware of online pseudonyms

As the SRA points out, “anonymity is not guaranteed; material which you post under a pseudonym may still be traced back to you”.  The technology goes far beyond a simple name check and we routinely identify multiple online aliases tied to one individual.  Having a very corporate account on Twitter for example and a second “angry” account under a different username does not mean that the rules won’t apply.

As the regulator and the press are increasingly picking up on conduct issues, social media best practice and online reputation screening becomes critical in mitigating the risk for firms.

If you’d like to know more about how to quickly implement a compliant and cost-effective approach to help protect your firm and its members, please give us a call on 0208 090 2622.

Bad hires: Don’t become another victim

We all know that bad hires can have detrimental effects on your business. The cost is significantly higher than just their salary as the negative impact on reputation or team moral can be challenging to say the least. A high turnover of staff creates instability within a business and can affect its day to day functioning of a business, slowing everything down.  In short, smart hiring decisions will always be a critical challenge for any business. 

So, should we do more when screening new hires?   

We now live in a digital age and there is more information about all of us than there has ever been, but some processes have not evolved to capitalise on this.  Employee references and data base checks only show a part of the picture. There is a wealth of open source data on an individual, from social media to wider media sources that that can reveal more about a person.  By utilising open source data and technology you can uncover an individual’s “online footprint” and gain an understanding of how they choose to engage with the world.  While most people that we screen at Neotas meet the requirements of any employer’s robust social media policy, there are an important percentage that fall dramatically short. 

In the past few months we have seen racism, sexism, graphic content and illegal activity, to name just a few of the categories we include.  While the final decision to hire always falls to the prospective employer, some of these candidates clearly showed behaviour that could be genuinely damaging to the prospective team.  Yet almost all of this information is missed by the more traditional background screening process.  What may be more surprising is bad behaviour appears at all levels of seniority, from the second Twitter account a CEO used to make highly political and vitriolic statements ,to senior managers caught on video for football hooliganism, to more junior hires that are perhaps “angry online” but would benefit from some coaching on how our online and real-world personal brands are now closer than ever. 

It’s time to know more about the cultural fit of your candidates BEFORE they join and the technology, speed and cost of these makes that makes it more practical than ever before.  Don’t be the last one to see information that is freely available for your customers, colleagues or competitors to view online. Make sure you “Know More” when it matters.    

If you want to know more about compliant, easy to implement social media checks or deeper dive reputational checks, including how social media checks can enhance your due diligence process, please give us a call on 0208 0902 622.

The Campaign Crisis: MPs and their Mishaps :

As election day looms, we look back at what has been a tumultuous campaign for MP candidates from all parties. As is becoming the norm in British politics, online blunders and revelations have once again ended several political careers. In a previous blog post we highlighted the mistakes made by Change UK, but here we explore how political parties have failed to grasp the importance of online due diligence and social media checks. 

The SNP dropped a candidate over anti-Semitic posts shared on Facebook, whilst offensive tweets from a prospective Lib Dem MP were deemed to have brought the party “into disrepute”. Having formed in January, the Brexit Party found themselves in a scramble to produce hundreds of MP candidates to stand across the United Kingdom. In this rush to field candidates, any semblance of due diligence went out of the window.  

Stoke North candidate, Daniel Rudd, was dropped after the emergence of homophobic and racist tweets from his personal account. In a bizarre attempted show of support for animal rights, he also suggested conducting pharmaceutical testing on ‘Remainers’ instead. He has since deleted his Twitter profile. 

Brighton Kemptown candidate, Dr Graham Cushway, came under fire for his past involvement in a ‘Nazi vampire’ themed heavy metal band. A simple Google search of his name will lead you to articles from 2012 describing his acrimonious departure from the band. Once the connection is made, you can find the candidate (under his stage name of Graham Lord Pyre) sporting the SS Totenkopf insignia on his Gestapo-style costume in photos on the band’s website. 

Candidate Jill Hughes also faced increasing scrutiny for the disparity between claims on her social media profiles and her actual accomplishments and accolades. For example, she listed herself as the ‘CEO’ of Money Magnet on her LinkedIn since November 2017 but only registered the company on 10 October this year.  

These were avoidable slip-ups, as adverse content was there for anyone to find. Political parties and candidates face greater scrutiny in the press, and the lack of due diligence conducted led to a great deal of wasted time and money. We have highlighted the need for online reputation screening to help build a complete picture of job candidates, but this should be no different for political candidates. 

Sharing is Caring. Right?

The emergence of sharing economy companies, such as Uber, Airbnb, and Bolt has brought a question mark around the level of due diligence conducted on service providers. Does the very nature of the sharing economy, which has called into question the regulatory system surrounding it, provide a platform for crimes to be more easily committed?

A spate of crimes has caused calls for more stringent background checks to be completed. One piece of research  has found that 30% of platform providers have “serious inconsistencies in their licensing and identities”, with even taxi drivers admitting that checks need to be more stringent. Uber also lost its London licence after TfL found drivers faked their identity, and a government report found that licenses were issued to criminals convicted of serious crimes.

So, what is currently being done to combat these issues? Well, Uber state on their website that background checks “vary from city to city” and Airbnb’s website states their “limited background checks” are on the condition of “if we have enough information” and “cannot guarantee” they will identify “all criminal convictions or sex offenders”. The very wording clearly shows these platforms know their checks aren’t stringent enough. Surely if consumers are expected to take a ride in someone’s car or stay in someone’s home, we should be able to trust them and the companies in which employ these people. So, what can companies do to maintain this trust?

The answer is simple – more stringent checks. Open Source Intelligence (OSINT) checks can delve deeper than standard database checks to highlight clear risk indicators. There is a clear need for regulatory reform through the issues highlighted throughout the industry. Personal safety charity Suzy Lamplugh Trust notes that “the highest level of criminal checks is not required in law” allows a “minority [to slip] through the net”. In the ‘Age of the Internet’, checks need to keep up with this online society that has been created, and OSINT provides an extra step for that extra layer of security.

Assurance for the Insurance Sector: SMCR and beyond

Today the Bank of England tells insurance companies to improve their working cultures after revelations about sexual harassment and bullying in the industry.

The Prudential Regulation Authority has flagged recent instances of alleged abuse as of “deep concern” and said bad behaviour could result in senior managers being banned from the sector.

The Senior Managers & Certification regime (SMCR) was rolled out to insurance firms late last year and will hold senior managers to account.

Patrick Butler, co-founder of the Culture and Conduct Academy at UK Finance:

“As regulators become more expert as to how senior managers can and should drive better conduct, they will become less tolerant of senior managers’ inability, or unwillingness to find ways to measure and manage culture effectively.”

Tools specifically designed with conduct risk and behaviour in mind offer a rigorous and systematic approach to gain insight on clients and staff. This will give firms the ability to link behaviour to value and give accountable managers tangible ways to move the dial on conduct and culture.

The spotlight isn’t just on insurance companies, but the message is clear: there is more work to do to stamp out bad behaviour, evidence compliance with SMCR and give leaders confidence.

SMCR is not just limited to the insurance and banking sector. With the 9^th December deadline fast approaching for insurance brokers, wealth and asset managers, there are opportunities to build trust, inspire staff to control risk and create sustainable business value.

Neotas help leaders across the financial service industry to pinpoint people risk and build positive cultures. Find out more at neotas.com

From our vision to traction, Planet Compliance shine the spotlight on Neotas.

1. What can you tell us about your company and your products & services?

Neotas is an online due diligence company. We provide deep insight on risk by interrogating social media, the deep and the dark web. We help our clients reduce fraud, avoid bad hires and comply with the latest regulatory guidelines. Our services are scalable, cost-effective and apply a unique blend of AI technology and human analytics for smarter risk management.

2. How did you come up with the idea and what drives you?

Our CEO & Co-founder Vipul Mishra is an ex-Head of Information Security at a leading hedge fund. Having dealt with a number of fraud cases in his day-to-day role, it soon became apparent that more proactive measures were needed to really tackle fraud and financial crime. The idea for Neotas was borne out of a passion for technology and fueled by deep industry expertise in financial services and fraud prevention.

3. What is it that makes your company different from others?

Our unique blend of machine learning, natural language processing and image analytics enables new insight into global risk. When coupled with multi-lingual analytical capabilities and deep industry expertise, our solutions become cost-effective and highly scalable. We complement and augment existing due diligence processes. Our approach to risk management is different. We take a proactive approach by looking at unstructured and otherwise underutilized data that sits across the largest dataset of them all – the Internet.

4. Where are you based?

We are headquartered in London. Our clients are global and we offer multi-lingual capabilities.

5. When was the company launched?

Neotas was founded in February 2017.

6. What traction have you made? Can you tell us about your biggest achievements so far?

We have over 70 clients across the financial services space, including wealth managers, private equity firms, banks and insurance companies.

At the beginning of 2019, Neotas was selected as a top 20 start-up to join the FinTech Innovation Lab 2019, run by Accenture. The intensive accelerator programme, supported by 35 financial services companies, enabled Neotas to connect with the industry’s most senior banking and insurance executives, driving both scalability and innovation.

More recently, Neotas was awarded a grant from Innovate UK to back a Knowledge Transfer Partnership with the internationally renowned AI Department at the University of Essex.

7. What advice could you give to other entrepreneurs and start-ups?

Be procurement ready, especially for incumbent banks as the sales cycle can be much longer. The best bit of advice Neotas Co-founder Ian Howard was given as an entrepreneur has been “Don’t burn bridges. You’ll be surprised how many times you have to cross the same river.”

8. What can you tell us about your team?

Our team brings together cyber intelligence, financial services, risk management and legal backgrounds. This blend of skills and expertise provides a fresh insight and invaluable perspectives on the due diligence landscape; that blended with our technology is what keeps us ahead of the curve.

9. What’s next for your company?

As part of the Knowledge Transfer Partnership, we will be refining our contextual analysis and further integrating AI into the process. The incorporation of AI will enable our intelligence platform to take account of the context in which words or images are used – for example, to be able to tell the difference between an individual on a clay pigeon shoot, or a terrorist armed with a gun.

10. How do potential customers and investors get in touch with you?

Get in touch with us directly or visit www.neotas.com for more information. Our solutions are scalable, fast and cost-effective.

This article was originally published on Planet Compliance

Click here to find our more about how enhanced due diligence can keep you compliant.

As a recruiter, how often do you question a candidate’s accolades and accomplishments? In the case of Ms. Antoniadou, it seems this all happened too late. The story hit the press earlier this year and the case raised a few important points for hiring managers and recruiters when screening candidates.

Exaggerating credentials and overinflating accolades is something that is becoming more widespread in a competitive job market. So what’s the difference between over-exaggeration and fraud? What can be done in a world where 90% of HR Directors have found exaggerations on a CV or job application?

According to the story published in UAE, “In the days before widespread internet use, social media and the ability to vet someone’s profile online, it was easier to inflate past accolades to climb the greasy pole”

Do your online due diligence

The cost of a bad apple can be substantial. According to Bradford D. Smart in “Topgrading”, the cost of a bad hire can be anything up to 23 times their starting salary. If a candidate is willing to lie about their past achievements and education on a CV, how much are you willing to pay for the wrong candidate?

The recruitment landscape is shifting and in an increasingly digital world, there is a vast amount of information that can be gleaned online to help build a fuller picture of a candidate. It can also help flag reputational risks sooner.

Do it right and don’t discriminate

It’s important to vet and screen candidates with rigour, but it’s equally important not to involve any discriminatory bias in the process. Our online reputation screening is designed to enable recruiters to screen candidates safe in the knowledge that protected characteristics remain protected.

In the case of Ms. Antoniadou, online reputation screening could have raised flags sooner. A simple search online would have shown contradictory statements and news outlets raising a discrepancy. The company that Ms. Antoniadou claims to run successfully does not have an active Internet domain – another flag that would have been raised through online checks.

Online reputation screening is not there to catch people out. It can provide context and a more complete picture of the candidate.  For example, we found charitable work spanning the year that was missing off an IT candidate’s CV. What we uncovered helped to build a picture of the candidate and provided better insight into the candidate for the role in question.

The story of Ms. Antoniadou serves as a reminder and the benefits of online reputation screening have never been clearer

Conclusion: CV Shortcomings 

it’s crucial to acknowledge and understand the shortcomings of CVs in the recruitment process. While CVs provide a valuable snapshot of a candidate’s qualifications and experience, they often fall short in fully capturing a candidate’s true potential, personality, and suitability for a role. These limitations include the inability to showcase soft skills, lack of context for achievements, and potential biases in the selection process.

Putting the “Intelligence” back into AI :

Artificial Intelligence (AI) has transformed our daily lives to drive better customer experiences, from connected home devices to retail experiences. But what will it take to unlock the power of AI in the commercial due diligence process?

| 1 in 3 said the ability to harness the information with data analytics would help to accelerate the due diligence process (Merrill).

However, despite AI applications becoming crucial in M&A in the coming years, those working within the sector may feel in the dark about its true benefits and limitations.

Machine learning (ML) is an application of AI technology that has provided sectors with invaluable insight. For example, in fraud prevention and AML processes, ML can increase the accuracy and speed in which fraudulent activity is flagged and processed.

What are the limitations and opportunities?

Training ML platforms and human intervention is a problem often raised, as well as algorithmic bias, overestimating capabilities, and reputational risk. Hence, with all the benefits and wonders of AI, it still needs to be coupled with the human touch to fully appreciate and aid its applications.

So how can AI benefits be unlocked without compromising data reliability or losing the human cognitive function? Well, combining these factors can allow humans (for all our faults) to supplement AI and ML to remove false positives and provide contextual analysis. AI should complement, not supersede the current decision-making processes.

Providing a whole greater than the sum of its parts61% of M&A professionals expect technology to change due diligence by supporting deeper analytical capabilities. An intelligence cycle that combines Open Source Intelligence (OSINT), Natural Language Processing (NLP), and human analytics, is powerful.

However, a full switch to AI may not be favourable. Instead, finding a hybrid process which combines technology with human intelligence can drive deeper insights, and faster, more informed decisions for a competitive edge.

Contact us today to find out how you can leverage AI for more informed risk-based decisions.

Passport programme in the Pacific faces criticism

The citizenship programme in Vanuatu was launched in 2016 and since then, it has raised more than $200 million in government revenue. 1,800 passports were handed out in 2018 alone and the scheme generated a THIRD of government revenues last year. But what has the fallout been?

Concerns have been raised over inadequate due diligence measures and lack of screening of applicants, which could ultimately undermine visa-free access Vanuatu enjoys with the EU. Under Vanuatu’s scheme, successful applicants can become citizens within a matter of months, and there’s no requirement to reside in the country or even to set foot on Vanuatu soil at all.

The job of screening an applicant’s criminal and financial backgrounds is performed by the Government’s Financial Intelligence Unit. In this week’s story published in the FT, Vanuatu’s minister for foreign affairs commented:

We are getting some negative implications as a result of the lack of due diligence on applicants to get citizenships, which is affecting our bilateral relations with other countries”.

The review of the programme comes amid wider worries in the west over Chinese influence in the Pacific.

Spotlight was also previously placed on Vanuatu when six Chinese nationals were arrested and deported back to China at the request of Beijing law enforcement officials. The group was allegedly running an online financial scam targeting people back in China. Of the group, four had successfully applied for Vanuatu citizenship and obtained passports.

Earlier this year, Vanuatu’s founding president Sokomanu commented:

“We achieved our name and now put it on sale and people are coming in and we don’t know [who] we’re inviting”.

The passport granted through the Vanuatu scheme provides visa-free access to 129 countries, including the EU. This more cautious sentiment is not limited to Vanuatu nor will it be the only passport scheme under increasing scrutiny. The Balearics for instance want an end to the ‘Golden Visa’ scheme, citing that some of the money may have a ‘dubious origin’.

With the world’s heads increasingly turned towards passport and visa schemes, we would argue that there is a huge risk of not knowing who the applicants really are or where their money really comes from. Due diligence measures that delve deeper (into the applicants’ source of funds and networks for instance) on a case by case basis are going to help government officials make informed decisions. In the case of Vanuatu, it may all be too little too late.

Data Driven FCA

As we approach the anniversary of the FCA’s first published set of aggregated results, it is a good time to review what that means for risk managers across the UK and Europe.

Based on its annual financial crime survey of over 2,000 firms, firms may find the insights helpful as the data enables a comparison of their own management information against industry-wide trends and averages reported in the survey. Since 31 December 2016, the FCA has required over 2,000 firms subject to the UK Money Laundering Regulations, including all UK banks and building societies, to submit an annual financial crime data return.

The report identified that the respondent firms had a customer base of approximately 549m relationships in total.  Of these 120,000 involved ‘politically exposed persons’ (PEPs), just 0.02% of total customers, with 1.6m other ‘high-risk customers’ (an overall share of 0.29% of total customers).  While these percentages may be a small share of overall relationships their importance should not be underestimated.

It is possible that the FCA could use this industry-wide data to target firms for additional supervision in terms of AML controls. For instance, the FCA could focus on an individual firm with high-risk or PEP customer shares exceeding these industry-wide averages, such as Wealth management firms or, on the other hand, target those falling significantly below what might be expected for a firm of that size (and therefore potentially evidencing inadequate identification of high-risk customers). Adequate identification and management of high-risk customers has remained a key focus in the FCA’s 2017/18 annual report.  Enforcement activity taken in June 2018 against Canara Bank is just one example…

The challenge then is one of multiple layers.  As well as ensuring a culture of compliance there is the need to carefully apply budgets and resources to the high volume of clients and transactions that may become an issue as well as the high risk clients that need closer supervision.

The Money Laundering Reporting Officers within the surveyed firms handled 923,000 internally escalated suspicious cases in the 12-month reporting period. Following investigations, 363,000 suspicious activity reports (almost 40%) were then filed externally by firms with the UK National Crime Agency (the NCA), together with over 2,100 terrorism-related suspicious activity reports.  Only a small percentage (approximately 1%) of SARs filed with the NCA resulted in the NCA taking enforcement action.  This perhaps indicates ‘over reporting’ within the sector but the OECD has criticised the UK for the low level of corruption enforcement activity resulting from the current SARs regime. Given the large volume of SARs filed on a daily basis, and many being of ‘low quality’, investigation authorities face a challenge in detecting where the real risks lie.

In relation to country risk, the top 5 countries most often classified as ‘high risk’ by surveyed firms based on the risk of financial crime were Iran, Panama and Russia, Iraq and Laos.  The FCA emphasised that the industry rankings of country risk based on the survey results do not reflect the FCA’s views given that some firms may not have performed a risk assessment of certain jurisdictions. Despite this caveat, when viewed alongside other publicly available indexes such as Transparency International’s Corruption Perceptions Index, firms may find this useful guidance on the general views taken by their peers on country risk.

Rogue customers are perceived to be the principal perpetrators of crimes such as application fraud, insurance fraud, mortgage fraud and loan repayment fraud. Employees are similarly believed to be behind most expenses fraud and situations where fraud results from a person abusing a position of trust.

As data improves to better identify the risk so do the tools available to manage the risk.  At Neotas we utilise AI, machine learning, natural language processing and skilled analysts to ensure that enhanced due diligence is faster and more insightful than ever before.  Zero false positives, comprehensive use of surface, deep web and social media content, unlimited timelines (not just a 3 year news search!) and a number of other technological advantages ensure that our clients are better informed, and thereby more compliant than ever before.

Contact us today!

A Stewards Enquiry for Investment Due Diligence?

On Wednesday 22 May, Neotas hosted a networking evening with clients, peers and partners from across the Investment and M&A world. The evening began with an engaging panel discussion led by guest panellists, Dr. Mike Hicks of Catalysis Advisory, Carrie Osman of Cruxy & Company, and Nicholas Nicolaides of Symvan Capital. Our panellists brought unique viewpoints to the table and it was quickly apparent that parallels can be drawn between investment decisions, deal due diligence, and horse racing! So what’s the consensus on backing the jockey or the horse; or is it a combination of both? And what can we learn about deal due diligence in the digital era?

For Investment and M&A leaders, decisions are informed by insights into the company (“the horse”), including its age, network and form, the past performance and previous wins of the management team (“the jockey”), and the market landscape (“the going”). Over 70% of those in the room last week raised their hand when asked “Do you back the jockey?”, suggesting there’s a welcome shift towards considering the behaviour, network and character of the founders of companies AND the company itself (for example, through traditional commercial and financial due diligence), to inform deal decisions on today’s competitive racetrack.

“Perceptions have been shifting slowly across the private equity investor world so that understanding management isn’t confined just to looking at top team personalities. Instead, managing risk and increasing value is seen to rest on harnessing all available data to inform business decisions, covering top executives, team effectiveness, organisational structures and processes, people capacity and capability in target/investee companies” – Dr. Mike Hicks, Catalysis Advisory

It’s as important as ever for firms to feel they have a tight grip on the due diligence reins, encompassing company networks, directorships, PEPs, sanctions, plus all other data that should be readily available in today’s digital era. Reputational risks and wrongdoings are quick to cross global borders and for investors looking at jurisdictions outside of their home countries, a more informed decision based on ALL available information is paramount.

“The futility of box-ticking in due diligence means you are leaving money on the table. You miss the nuances of each market environment or business model, and fail to see the true value which can be extracted post-investment. Market data and generic interviews only show half of the story – digging deep into the ‘why’ can find the hidden weapon that will get that market to pay double and maximise your return.”  Carrie Osman, CEO & Founder, Cruxy & Company

As we shared last week, there is a vast amount of untapped intelligence available across social media, deep and dark web, that can provide a valuable piece that completes the due diligence jigsaw. Management due diligence that harnesses publicly available sources online will identify reputational risks or concerns, provide deeper insights into the jockey (including network, behaviour and performance) and according to Nicholas Nicolaides, help to pinpoint the “unknown unknowns”…

“Management due diligence remains the weakest link in VC and PE deal assessment and completion processes. Beyond the usual checks, evaluating how the team can perform under pressure is far removed from evaluating how, for example, a tech stack will perform when exposed to high-write traffic. The approach to evaluation of management is changing and shifting away from over-reliance on box-ticking. We need to consider so much more in our processes and look for the unknown unknowns.” Nicholas Nicolaides, Investment Manager, Symvan Capital

There are of course a lot of unknowns in today’s climate, including the current political landscape in the UK. With a surge in technology driven start-ups disrupting various sectors, investors are turning their attention to the hubs that are home to these firms across the globe. In doing so, there is an inherent need for the right due diligence services to be available that take into consideration the jurisdictions in which these firms operate and a deeper understanding of the market environment.

Perceptions are definitely shifting with regards to investment due diligence and more specifically, management due diligence that delves deeper into the people behind the business. Is it a stewards enquiry? We don’t think so, as in today’s world, to make informed deal decisions, confidence in both the horse AND the jockey needs to be a by-product of the investment due diligence process. Gut feeling is still a factor, but why not reinforce and verify those decisions with deeper due diligence that is built for the investors of today?

With thanks to our attendees and guest panellists who joined us on Wednesday 22 May!

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Are you an investor? Get in touch to find out what how we can lower your investment risks today.

Public Faux Pas

One of the longest standing traditions in British politics is public faux pas, often in the form of controversial, ignorant or downright outrageous statements made by Members of Parliament. In the past, apart from the most egregious of quotes, MPs only had to survive the embarrassment of the weekly news cycle before their misstep faded from memory. Before the advent of social media, many of these comments probably never even saw the light of day. They could be made offhand without the worry of ever coming back to haunt them in the future.

Then along came Twitter. Politicians jumped at the chance to create a social media presence and tweet their thoughts and opinions to the world. Twitter was a perfect platform to bounce policy ideas off of the general public and get in plenty of political point scoring at the same time. Unfortunately for them, every terrible or ridiculous tweet was now a fixture in their profile’s history, publicly available for anyone to view, no matter how long ago it was posted.

In the last week alone, several politicians who have recently increased their political prominence have fallen afoul of old tweets resurfacing into the public spotlight. Brand new political party, Change UK, has seen two of its European Parliament candidates face intense scrutiny.

Within hours of Ali Sadjady’s unveiling as a candidate, an offensive tweet from November 2017 was uncovered, in which he commented on ‘Romanian pickpockets’. He has already resigned. Joseph Russo had only been Change UK’s lead candidate in Scotland for 24 hours when several offensive tweets from 2012 re-surfaced and started to do the rounds. He has also stepped down.

Whilst social media has become an invaluable part of modern politics, it has opened up a whole new avenue of potential pitfalls. It’s more important than ever for MPs, and others in the public spotlight, to be aware of their online reputation, the permanence of what they share online and how it can have serious repercussions on their professional image. A proactive attitude by political parties towards online reputation screening and social media checks could have mitigated their risk from the outset and saved the fall-out in the press.

Modern Slavery and human trafficking are some of the most widespread crimes in the world. An estimated 40.3 million people are victims of human trafficking, with 24.9m of these estimated to have been exploited for labour and 15.4m in forced marriage (according to the International Labour Organisation).

STOP THE TRAFFIK plays a central role in spreading awareness of modern slavery and putting in place effective crime prevention measures.

Intelligence-led prevention measures

Among the partners that are helping STOP THE TRAFFIK in its mission to prevent human trafficking, Neotas are playing a pivotal role through pro-bono analytical and advanced intelligence support. We are providing actionable intelligence that draws on insights from publicly available information.

We are applying the open source intelligence (OSINT) tools and techniques that we utilise every day to conduct in-depth due diligence. From network mapping across social media channels, to building out motivators and behavioural insights (of both victims and perpetrators), this intelligence-led approach aids the creation of effective awareness campaigns and the prevention of modern slavery.

The role of social media

Social media is increasingly becoming a part of our everyday life and enabling communication across borders, with an estimated 2.77 bn users in 2019. This means that it provides the same opportunity to traffickers and is often used to recruit their victims. Open source intelligence and social network analysis plays a central role in gaining an understanding of overall trends, hotspots and means used by traffickers.

As indicated by STOP THE TRAFFIK, this is crucial for the effective awareness campaigns that specifically target at-risk communities and individuals, using the power of OSINT for good.

Modern Slavery – Financial Crime

Collaboration with STOP THE TRAFFIK has enabled Neotas to support a charity that aims to make a real impact on the lives of millions of victims. While helping STOP THE TRAFFIK in its mission, it also serves as a reminder of modern slavery’s intrinsic ties to financial crime and illicit flows.

There is an increasing focus on tackling financial crime and preventing money laundering at an institutional level, going beyond regulatory compliance.  Implicit in this is the importance of pinpointing any risk factors across the supply chain and it calls for more collaboration from financial institutions, regulators and governmental bodies, and the wider ecosystem, to help combat financial crime at the source.

What’s next?

Our partnership with STOP THE TRAFFIK has proven to be both exciting and mutually enriching. To be able to have such a profound impact on the lives of those suffering from modern slavery is truly an inspiring thing.

With key projects already delivered, we look forward to continuing our partnership with STOP THE TRAFFIK and using the power of OSINT for good to try to prevent human trafficking.

Relevant Links

• Find out more about STOP THE TRAFFIK and their incredible work here
• Follow Neotas here for live updates on our partnership with STOP THE TRAFFIK
• Learn more about the intelligence delivered via our ORCA platform here

Is it time to get your act together online?

Recent news has covered a string of incidents involving public figures in relation to their activity online. Yesterday, an actress was fired by a TV soap series due to historic and offensive tweets. What she had shared on a computer screen led to the producers taking her off screen.  So in today’s world, how important is your digital reputation?

Not only is your online behaviour treated as a reflection of your real character, but it’s out there for all to see; not limited by location, audience or time zones. And it’s no different for celebrities and high-profile figures.

Emmerdale actress Shila Iqbal was fired by her employer given the nature of the tweets that were shared in 2013 when she was 19 years of age. This follows another case involving The Colour Purple actress being dropped from the musical over homophobic comments. The Australian rubgy player Israel Folauls is also to be sacked in relation to his homophobic and hateful social media outburst and refusal to accept the code of conduct for prominent sports figures such as himself.

Having since deleted her Twitter account, Ms. Iqbal issued sincere apologies, acknowledged that she was young but that “I, like everyone else, have a responsibility about the language I have used on social media as well as in conversation”.

“Your online digital reputation defines how people perceive you without ever having a single conversation with you” – Sylvie De Guisto, professional speaker

Celebrities and high-profile figures have to be mindful of their conduct and behaviour, as in this case and many similar, it can have far-reaching repercussions.

There are no exceptions in the online world: Social media influencers, footballers and prominent sports figures, politicians, CEO’s, and indeed all of us are all held accountable for our behaviour online and managing our reputational risk.

Companies are increasingly focused on their own digital reputations, encompassing the behaviour of their staff.  We saw it last week after the BBC’s response to its employees sharing personal views online.

Individuals’ online behaviour will always be challenging to monitor, but there is an opportunity for organisations to instil a culture of trust whilst managing their reputational risk from the outset.

In the case of Ms. Iqbal, the tweets were only flagged to the employer after she was hired. What would have happened if the tweets had been flagged sooner?

For us all as individuals, this serves as a reminder we should be mindful of our online behaviour (that goes to keyboard warriors too!) For organisations, the time is ripe to start placing more emphasis on this when they hire staff and onboard clients. In this digital world, protecting your online reputation has never been so important.

Abuse of children

A recent story highlighted the need to constantly maintain and review safeguarding controls.  An associate head teacher admitted to the crimes of gathering over 2000 images showing the sexual abuse of children, as well as owning Class A drugs. It is reported that the recruitment process at the time acted in accordance with all safeguarding requirements, including an appropriate criminal record check, but did not extend into checking his online footprint for signs of adverse behaviour. Therefore, if this current process hits the safeguarding requirements, shouldn’t it be time to raise the standard?

Improving the vetting process in institutions such as schools and hospitals is two-fold. Firstly, schools can collaborate with charities such as the Lucy Faithfull Foundation, which runs the Stop it Now! Advice Helpline reporting concerning behaviour toward children. The charity referred 148 offenders between 2016-17, including individuals who have been hired into ‘high-risk’ positions. Secondly, screening procedures must become more rigorous. An individual’s digital footprint can be an invaluable source of insight into employment-related risk indicators. Tapping into this publicly available data source can reveal information not available in a criminal record check. Collaboration between schools and charities, coupled with raising the bar in online screening standards, will provide a more complete picture of the individual and thereby increase the chances of adverse behaviour and red risks being flagged before it’s too late.

The role of government, and departments such as Ofsted, is to establish guidelines that keep our children safe, to protect vulnerable people by ensuring a stringent vetting process. By redefining the processes currently in place to recognise the evolving challenges, they can better help to prevent the wrong individuals from being hired and better safeguard the vulnerable.  In light of the case of Mr. Newbury, we would pose the question: are current checks inadequate for the education sector and is it time to ramp up efforts across the whole ecosystem to ensure the safety of the individuals these institutions are accountable for?

In PART 2 of the Courage, Culture and Conduct series, Patrick Butler shared his views on courage as the foundation of a value-focused culture  >> READ HERE

The question we are most often asked at the Conduct and Culture Academy (CCA) is, “how do you measure behaviour, given it is subjective and nebulous?” Delegates often comment that this is frequently used as an excuse not to invest in long-term behavioural initiatives “because we cannot produce the management information that shows it works”.

Indeed, in the FCA Discussion Paper on Transforming Culture in Banking in February 2018, Jonathan Davidson remarked that:

“… leaders can manage culture even if they can’t measure it very well”.

Yet an inability to measure culture is no longer the case. There are now some startlingly effective tools emerging to strengthen MI beyond vague sentiment surveys and the standard, superficial profiling of staff and customers, such as the advanced intelligence platform developed by Neotas and the Alderbrooke Group (CultureScope). These tools offer a rigorous and systematic approach to gain insight on clients and staff, linking behaviour to value and giving accountable managers tangible ways to move the dial on conduct and culture. Curiously, many decision makers seem to be wary of using these tools. Could this be because of what they may show? Perhaps, but this should not be the case.

The emerging regulatory approach is to expect leaders to have courage and, as we see from the sandbox approach to FinTech companies, be more tolerant of honest failures if the decisions are well-thought out, i.e. made with the integrity of the market, long-term good outcomes and the protection of clients and customers in mind.

This may need some difficult truths to be accepted and new skills to be developed, but leaders who develop a more sophisticated behavioural approach to managing their firms for the long-term will ultimately create trust, productivity and thus success for their firms – as well as themselves.

Without this approach, as regulators become more expert as to how senior managers can and should drive better conduct, they will become less tolerant of senior managers’ inability, or unwillingness to find ways to measure and manage culture effectively.

With it, the forward-thinking leaders will become the catalysts for sustainable value for their firms and the rehabilitation of the finance industry. With the rebuilding of trust will come a greater confidence and so greater participation, reducing volatility and driving growth. With finance as the lifeblood of the economy, I need hardly spell out what this will do for standards of living.

Consistent with the value offered by fostering cognitive diversity – i.e. with more information to hand – senior leaders can equip themselves to drive the right Culture to underpin success by:

• Seeking a culture of openness and transparency by proactively managing and measuring cultural change by clearly defined metrics
• Driving better decisions and enhanced decision-making processes and capabilities, e.g. defining, developing and rewarding characteristics that enable you to manage Conduct and Culture, right through all parts of your firm
• Leveraging new technology fearlessly to measure and foster behaviours that build trust and inspire all staff to control risk and create sustainable business value
• Treating this strategy, not as a defensive control mechanism, but as an opportunity to innovate and so boost the success of your company

They will then be truly successful. In the words of Simon Sinek:

“if the challenge we face doesn’t scare us, then it’s probably not that important.”

Stay tuned for the video soundbites from the Courage, Culture and Conduct Series >>  live updates here

First published on www.neotas.com > helping organisations to harness digital intelligence, measure behaviour and mitigate people risk.

______________________________________________________________________________

About this Series:

The concepts in this series and some of the new tools available to manage culture will be discussed further at the UK Finance Culture eats Strategy for Breakfast event on 14 March for Board level executives. They will also be explored in more detail within the fourth cohort of the Conduct and Culture Academy beginning at the end of March.

About the Author:

Patrick Butler is co-founder of the Conduct and Culture Academy at UK Finance and founder of Calitor Limited. A former Diplomat, Investment banker, Operating Officer, Head of Compliance, he now advises and coaches senior management and future leaders to enhance behavioural understanding underpinning practical solutions to meet the changing regulatory landscape and build competitive advantage.

View the Free Webinar >> Managing Culture to Deliver Strategic Success: Converting the Regulatory Imperative into Business Success.

In PART 1 of the Courage, Culture and Conduct series, Patrick Butler shared his views on overcoming the fear factor to drive success.  >> READ HERE

PART 2: Courage as the foundation of a value-focused culture

Cognitive bias can cause fear of new ideas and new ways. We see examples of specific behavioural models (Confirmation bias, Framing, Anchoring etc), when decision makers…

• rely on instincts and practices developed over years that result in downplaying or ignoring uncomfortable messages
  focus on what is easy to measure, or provides positive evidence for past decisions, rather than seeking out ways to measure the more important warning signs
• deprioritise active learning, questioning behaviour to find new ways to measure, and so foster less tangible but fundamental behavioural drivers of success
• ignore innovations that may give better insight to clients or staff and so be able to predict and better influence their likely future behaviours to benefit all stakeholders.

Instead, we need to foster courage at every level of the firm, from the board downwards, to:

• challenge the status quo in both the firm’s and their own thinking to drive an open, aspirational culture – rather than one of over-control, blame and fear
• show humanity and integrity (by which we mean authenticity) to set the example and inspire staff to do likewise
• be open about failures in order to encourage lessons to be learned
• speak up when something does not look right, or with fresh ideas that may enhance the firm’s ability to succeed in the long term, even if they may have a short-term cost.

This may be intuitive, but shareholders demand financial returns , not measures of collaboration. ‘Humility’ does not pay pensions that are due or provide expected investor returns. However, without the strong foundation of these qualities, you risk a Carillion, a Nokia, a Lehman, Bear Stearns, a Patisserie Valerie, Tesco, LIBOR, Interest Rate Swaps… etc. etc.

Thus, managers who have the courage to have open discussions with boards and shareholders to demonstrate the link between good conduct, good business practices and longer-term confidence in order to take better strategic decisions, will build trust, productivity and thus success for their firms – as well as themselves.

Forward-thinking leaders can become the catalysts for sustainable value for their firms and the rehabilitation of the finance industry, greater confidence and participation in the market, reducing volatility and driving growth. With finance as the lifeblood of the economy, I need hardly spell out what this will do for standards of living.

So, what can senior managers do – in practice?
• Can they, in fact, measure culture?
• How might they really build a better understanding of their colleagues’ motivations, to align personal goals with the values of a firm and interests of shareholders and customers alike, to ensure long-term success?

Instilling cultural and behavioural change from the ‘ground up’ can be challenging, but by aligning measured approaches and gathering insights that are honest and true, managers can foster better decision making that will benefit clients, colleagues and shareholders alike.

The key to this is finding reliable ways to measure the behavioural drivers…

In Part 3 of the Courage, Culture and Conduct series, we’ll take a look at the ways in which we can measure culture. CLICK HERE to follow us and receive live updates.

About this series:

The concepts in this series and some of the new tools available to manage culture will be discussed further at the UK Finance Culture eats Strategy for Breakfast event on 14 March for Board level executives. They will also be explored in more detail within the fourth cohort of the Conduct and Culture Academy beginning at the end of March.

About the author:

Patrick Butler is co-founder of the Conduct and Culture Academy at UK Finance and founder of Calitor Limited. A former Diplomat, Investment banker, Operating Officer, Head of Compliance, he now advises and coaches senior management and future leaders to enhance behavioural understanding underpinning practical solutions to meet the changing regulatory landscape and build competitive advantage.

At the end of 2018, a £13.8m contract was awarded to a ferry company, Seaborne Freight, in preparation for the potential consequences of a ‘no-deal’ Brexit. The company is expected to run ferry services between Ramsgate and Ostend from March onwards. However, in a very public outing, it was revealed that there was a string of potential risks in association with this company. We ask the question; how did this one slip through the net and would there have been any areas of concern or potential risks that our management due diligence would have flagged?

Initial searches into the company’s Directors show a clear potential risk indicator almost immediately. John Edmund Paul Sharp (also known as Ben Sharpe) was the director of Mercator International Ltd, Mercator Ship Chartering Ltd and Mercator Platforms Ltd. These companies were all subject to compulsory liquidation, and Mercator International Ltd showed debts of £1.46m at the time of dissolution in 2016.

The company’s website also displays other areas of concern, for instance the website’s ‘Portal Login’ is only an image and not interactive. This may have potentially indicated even higher risks associated with signing a large contract deal. The Terms and Conditions on the company website appeared to be copied directly from a food delivery website. This has since been amended, but cached versions of the web page can still be found that reference “placing a meal / order”. Another potential area of interest, entails the company’s Twitter page – it only includes weather forecasts from June to September 2018.

According to Chris Grayling, the Secretary of State for Transport, due diligence checks were carried out and searches were conducted on the Directors. These searches raised nothing of interest that would have prevented a contract from being signed or the deal being questioned at the due diligence stage.

Andy McDonald, the Shadow Transport Secretary, said: “Awarding a contract to a ferry company with no ships is yet another disgraceful misuse of public money by the transport secretary.”

For a sizeable deal of almost £14m, it is unsurprising that deeper due diligence checks (including management due diligence) were expected to be taken regarding the company and its Directors. The checks that were claimed to have been made had been considered satisfactory. And yet, in the fall-out, numerous issues have surfaced.

Conducting more rigorous checks for a new contract deal, on the company and its directors, provides an added layer of protection against fraud and reputational risk, better inform the decision-making process and ultimately safeguard any investments. The case of Seaborne Freight is just one example of the limitations of existing due diligence processes. It calls for management due diligence that delves deeper, especially for government contracts.

>>>

How well do you know the people and companies you invest in?  

By leveraging the latest technology and advanced analytical capabilities, Neotas is setting new standards in due diligence and reducing the number of investment deals gone wrong. Find out more about our Management Due Diligence >> click here. 

The behavioural theories that underpin the regulators’ approach to mitigate misconduct, are also fundamental to driving success. If we focus on the behaviours that drive value in the long term, this will align interests of employees, managers, boards and shareholders with those of customers and simultaneously crowd out misconduct.

This long-term focus critically changes leaders’ priorities. It means that leaders need to articulate clearly what these long-term goals look like (rather than focus on short-term returns demanded by just one stakeholder – usually an activist shareholder, or the fund manager supposedly representing myriad silent small shareholder, such as pensioners, but often driven by personal targets. This requires the courage to define the fundamental values of a firm that will achieve those goals, and then challenge themselves to work out how to manage the drivers of those values.

These drivers are not backward-looking measures such as financial accounting measures, or HR defined metrics. They are behaviours that drive future outcomes and are the core levers by which leaders (at every level) may embed a Culture that will be both a safety net and an engine of success. At the UK Finance Conduct and Culture Academy (CCA) we explore the link between behaviours and financial value including how to build financial models that can be powerful tools for firms to deliver their strategy.

But what behaviours? Among others: collaboration, courage, self-awareness, active learning, conformity, accountability, temperance, a tendency to be outward looking, humility, innovation, and transparency (and their opposite pairings), not the simplistic outcomes (mis-selling, unauthorised trading) often at the core of Conduct Risk Frameworks. The FCA internal model of leadership characteristics includes these sorts of attributes with which it can assess leadership of the institutions it supervises, currently informally – and I imagine soon formally – under its Senior Managers & Certification regime.

Firms can rebuild frameworks, using a behavioural lens to articulate and reward these behaviours to stimulate the innovation and productivity that drives sustainable growth. Yet few firms make this core to their strategy, preferring to continue using or slightly tweak their existing frameworks, in some cases shoe-horning Conduct into a traditional Risk framework, rather than threading it through all activities. Why is this? Could it be fear of the different, or fear of accepting sunk cost as a loss? Yet the status quo has hardly been a paragon of success.

“Fear” was a key topic of discussion at the FCA CEO roundtable in November. Although some leaders are starting to view fear as a cultural impediment to business success, many still talk more about their own fear of failure by themselves or others, or of issues they cannot control, such as Brexit.

These responses reflect findings from recent research and surveys on behaviour and culture at board level. For example, the propensity for leaders to overestimate their abilities to measure and manage culture, even though they recognise it as key to success.

Fear of unfair blame or criticism (e.g. under SMCR) tends to suppress the right behaviour, even though behavioural research by the likes of Dan Ariely demonstrates that the ability to admit failures reduces the likelihood of recurrence.  Such honesty can only be in the best interests for all stakeholders of any industry, and society.

Yet this cognitive bias may cause managers to ignore the behavioural drivers that ultimately will cause their bank to trip up or lose them the opportunity to foster those that will drive sustainable success. The courage to recognise cognitive bias is the first step for leaders to manage it and so ensure sustainable value to the firm.

At the CCA, we explore the growing discussion on Culture in Banking amongst regulators. On the surface, it may be the only way the regulators can supervise and control a constantly changing, complex interdependent global industry that constantly seems to find new ways to demonstrate misconduct. But, if we switch to the other side of the coin, courage to learn how to manage Culture proactively can in fact drive sustainable value, rather than just prevent regulatory loss.

>>> END OF PART 1 >>>

Stay tuned for PART 2 of the Courage, Culture and Conduct series: “Countering Cognitive Bias” > live updates here

First published on www.neotas.com > helping organisations to harness digital intelligence, evidence compliance and mitigate people risk.

______________________________________________________________________________

About this Series:

The concepts in this series and some of the new tools available to manage culture will be discussed further at the UK Finance Culture eats Strategy for Breakfast event on 14 March for Board level executives. They will also be explored in more detail within the fourth cohort of the Conduct and Culture Academy beginning at the end of March.

About the Author:

Patrick Butler is co-founder of the Conduct and Culture Academy at UK Finance and founder of Calitor Limited. A former Diplomat, Investment banker, Operating Officer, Head of Compliance, he now advises and coaches senior management and future leaders to enhance behavioural understanding underpinning practical solutions to meet the changing regulatory landscape and build competitive advantage.

View the Free Webinar >> Managing Culture to Deliver Strategic Success: Converting the Regulatory Imperative into Business Success.

How OSINT and AML Synergize in the Evolving Banking Landscape

Between 2-5% of the global GDP is laundered globally in one year, amounting to approximately $2 trillion in current US dollars, according to an estimate by the United Nations Office on Drugs and Crime. In the UK alone it is estimated that British banks spend £5bn each year fighting financial crime and yet, less than 1% of illicit financial flows are claimed to be confiscated by law enforcement agencies. Simply put, money laundering and financial crime is not a small issue. The monetary and reputational costs involved are extremely high, making finding and combining new methods of detection with existing anti-money laundering (AML) processes all the more important as part of the fight against illicit financial activity.

Earlier last week, a joint statement was issued by the Federal Reserve Board and four other regulatory agencies, including the Office of the Comptroller of the Currency (OCC), urging banks in the US to begin incorporating innovative approaches to AML processes. This call for innovation comes with a clear message of support. The regulatory bodies made it clear that banks who choose not to engage in pilot programmes will not be penalised. Furthermore, and more crucially, they also highlighted that banks that do test new methods will not be penalised should the outcomes of experimentation and use of new artificial intelligence tools reveal gaps in existing AML processes. Additionally, they stated that there will not necessarily be supervisory consequences or additional regulatory expectations arising from it either.

This opens a clear pathway for banks to freely pursue the implementation of new techniques, without the fear of current AML processes being criticised or highlighted as ineffective in comparison. The door is wide open to trial new technologies, even if they prove to be unsuccessful. In this move towards more collaborative efforts, the US regulatory bodies are also keen to provide platforms that promote dialogue between financial institutions and tech companies to collectively discover all the possible applications and implications of new tools.

Banks are always aspiring to evolve their approach to financial crime risk management, and this is the suggested approach. In an article published by HSBC earlier this year, Colin Bell, Group Head of Financial Crime Risk, highlighted the limitations of approaches that do not consider all available information, including those from open sources.

“Gathering together all of the relevant data …and bringing in external, publicly available data, will help us identify global patterns and systemic problems that might otherwise be invisible.”

Colin Bell, Group Head of Financial Crime Risk, HSBC

For us here at Neotas, the call for innovative approaches by regulatory bodies is a clear signal that there is room for AML processes to be enhanced and developed through the use of new technologies and techniques. What’s more, the value of open sources and external data is being recognised by banks as providing additional insights; that sometimes provide the key to unlock the AML answer. The use of open source intelligence (OSINT) and machine learning technology provides analysis of all publicly available information in a short time frame, removing false positives and supplementing insights with a considerable amount of external data to help spot and track suspicious behaviour. OSINT not only makes use of what is already visible and available, but it can provide the bigger picture to laundering operations and illicit financial flows across international borders.

Neotas are helping organisations fight financial crime through enhanced due diligence services and OSINT-based tools. In the last 18 months, we have provided insights that led to the reporting of individuals to the UK Serious Fraud Office, as well as PREVENT for suspected terrorism-related activities. In one case alone, Neotas uncovered a Director whose business had ties to a money laundering ring and involvement in arms and drugs trafficking. Amongst many red flags, Neotas uncovered numerous aliases associated with this individual, who had had various assets repossessed, was tied to modern slavery concerns and who had been reported in the Panama Papers.

We offer enhanced due diligence and advanced screening services to help reduce fraud and mitigate people risk. To receive a snapshot of Neotas’ work in this space, please contact us here.

Frequently Asked Questions (FAQs) about Anti-Money Laundering (AML) in Banking:

1. Why is AML important to the banking industry?

• AML is crucial to prevent illegal activities like money laundering and terrorist financing.
• It safeguards the reputation and integrity of financial institutions.
• Non-compliance can lead to severe penalties and legal consequences for banks.

2. What is AML in banking?

• AML in banking refers to policies and procedures to detect and prevent money laundering and other financial crimes.
• It involves customer due diligence, transaction monitoring, and reporting suspicious activities.

3. What is AML intelligence?

• AML intelligence is the information gathered to identify and mitigate money laundering risks.
• It involves data analysis, technology, and human expertise to detect suspicious patterns and behaviors.

4. What are the AML actions taken by banks?

• Customer Due Diligence (CDD): Verifying customer identity and assessing risk.
• Transaction Monitoring: Continuously watching for suspicious activities.
• Suspicious Activity Reporting (SAR): Reporting suspicious transactions to authorities.
• Enhanced Due Diligence (EDD): In-depth investigations for high-risk customers.
• Training and Education: Providing staff with knowledge to recognize potential money laundering.
• Regulatory Compliance: Following all AML laws and regulations.

5. How does AML benefit the banking industry?

• Protects against involvement in illicit activities.
• Maintains regulatory compliance and avoids penalties.
• Contributes to the stability and security of the economy.

6. What are the consequences of non-compliance with AML regulations?

• Severe penalties, fines, and legal consequences for financial institutions.
• Damage to the reputation and trust of the bank.
• Potential disruption of business operations.

7. How does AML technology assist in the banking industry?

• Automates complex checks and reduces errors for more consistent results.
• Enhances fraud detection and streamlines operations for seamless compliance.
• Centralizes data for efficient insights and clear audit trails.

8. How can banks ensure ongoing compliance with AML regulations?

• Regularly updating and implementing AML policies and procedures.
• Conducting periodic training and awareness programs for staff.
• Staying informed about changes in AML laws and regulations.

9. How does AML contribute to the overall financial system?

• Helps maintain the integrity and stability of the financial system.
• Prevents the flow of illicit funds that can undermine economic security.
• Supports international efforts to combat financial crime and terrorism.

~ by Alice Pearce, OSINT Analyst