Neotas Due Diligence 2021 Annual Report
Risks hidden in plain sight
“2021 was another unprecedented year for Neotas. In spite of the circumstances, we enjoyed our most productive year to date and I couldn’t be prouder of the way our team overcame the challenges we faced together. “ – Ian Howard, Director
We are delighted to share our Due Diligence Annual Report for 2021, featuring insights and case studies from many thousands of enhanced due diligence investigations conducted over the past 12 months.
While the exact results of each investigation remains strictly confidential, we present an overview of our findings, including the types of ‘behaviours’ most often uncovered and some of the interesting cases we have reviewed along the way.
What We Found
Fundamentally, Neotas investigations uncover risks that are not found as part of traditional compliance checks. Put simply, we gather and analyse more data, from more diverse sources than anyone else.
In addition to the usual data sources, our investigations help identify specific non-financial risk data and behavioural risks associated with personnel, reputational vulnerabilities and much more.
A red flag defined by Neotas is a high-risk behaviour we have identified, as it relates to an individual or an enterprise. Throughout 2021, more than 9% of cases we reported back to our clients displayed at least one high-risk behaviour.
Interestingly, these red flags generally go undiscovered when conducting procedural compliance, but can hugely influence business decisions. Once reported, these cases are almost always investigated further and more deeply .
Red Flag Breakdown
Neotas have pre-built search queries (lines of investigative enquiry) that identify common high-risk behaviours, or we can customise and configure the queries to suit the industry or organisation.
Typically, these searches seek to identify illegal behaviour, reputational risks, noteworthy or concerning ‘links’ within personal/corporate networks.
Examples of the risks included in these searches:
- Directorship Undisclosed/Of Concern
- Adverse Media
- PEP/Sanction Lists
- Inappropriate or Undesirable Behaviour
- Regulatory Actions/Notices
- Employment Inconsistencies
- Court Records
- Inappropriate/Undesirable Content
- Employee/Client Reviews
- Sexually Explicit Content
- Recommended for further research
In 2021, the most common red flag uncovered was present in over 20% of cases where a high-risk behaviour was found.
Inconsistencies in employment records was also one of the most common issues found. These types of inconsistencies can cause major reputational scandals, such as the former Yahoo CEO who was found to have fabricated elements of his CV.
Links to inappropriate or undesirable content were also amongst the most common issues uncovered, and have been shown to pose major reputational threats.
All Neotas searches are fully GDPR compliant and we continue to ensure that ‘protected characteristics’ remain protected. Here are some anonymised examples of some of the most noteworthy cases from the past year:
- An investigation into a high-risk individual uncovered an abusive past and suspicious activity for this crypto-trader.
- Network analysis into an individual and associated entities revealed suspected links to money laundering and terrorist financing.
- A string of aliases did little to hide the past of a fraudster with connections to schemes that sought to launder billions.
Why conduct enhanced due diligence searches?
The challenges of Covid restrictions in 2021 exposed many organisations to new vulnerabilities and sharply increased the typical (ongoing) threats.
The risk landscape has increased dramatically and the value we add is being strongly felt by our clients. We work in partnership to assist our clients, sharing their increased volume of work and helping them be more effective in reducing the amount of time (and hassle) spent on cases.
With 9% of cases exhibiting high-risk behaviour, it’s clear that critical information is being missed by traditional compliance methods. Our advanced technology harnesses open source intelligence to deliver risk reporting without the blind spots and in a fraction of the time.
While procedural due diligence checks rely on databases that are limited by their very nature, Neotas’ ‘live’ searches incorporate 100% of online sources to help massively reduce risk exposure.
By using an investigative, technology driven approach we are able to efficiently aggregate and analyse vast quantities of publicly available online data, then connect the dots between disjointed legacy databases – delivering a new depth of insight to compliance and risk reporting.
Groundbreaking techniques and technologies combined in 2021 to deliver ongoing risk monitoring that eliminates false positives, helping risk managers focus resources efficiently and mitigate exposure to new and future vulnerabilities.
Schedule a call with our team today, to find out how enhanced due diligence checks can lower your business risks in 2022.