Business transactions pose several risks to corporate organisations and given the strict regulatory landscape, no organisation should consider itself immune.
The various actions prescribed within due diligence frameworks and, in some cases required by law, are designed to ensure that unforeseen problems are prevented.
Failure to implement them could lead to fines, reputational damage, loss of revenue or even prison. Effective due diligence requires fast, convenient access to pertinent information to mitigate risk.
The type of information required includes news, company, country and industry information, regulatory and legal data, sanctions, watch lists and PEPs, as well as public records.
Due diligence tools are the best way to obtain and navigate these complex sets of information, but make sure the tool you use has all the right features to meet your needs, says Rudi Kruger, GM of LexisNexis Data Services.
A good due diligence tool supplies content that is specifically relevant to the due diligence process as opposed to a broad set of results from the worldwide web.
“We would never recommend the worldwide web as a good source of information for this particular task. A specialised solution will serve and protect your business far better,” said Kruger.
He explained that the open web is subjected to search engine optimisation – where advertising helps increase the placement of a website in search results. Additionally, critical legal and public records data, such as out-of-court settlements, judgments, liens or bankruptcies may be extremely difficult to find or verify.
For best results, the tool must have the ability to screen through negative and positive news in multiple languages and have access to news that has been archived. Look for a tool with the facility to source company family data, including ultimate parent, subsidiaries, joint ventures, affiliates, divisions, branches, groups, holdings and shell companies, to help you spot the signs of beneficial ownership.
Invest in a comprehensive solution – one that provides the information, has access to all the relevant lists, screens accurately and internationally, and can tailor-make the results to suit your needs. “Built in reporting is another important consideration when selecting a due diligence tool. Choose one that allows you to create customised reports for compliance audits,” said Kruger.
A solution from LexisNexis Data Services called NexisDiligence brings all this information together in one platform, allowing you to keep up to date on government sanctions, watch lists and PEPs. In addition to this content, you can leverage on-the-ground media reports and in-depth country risk analysis reports to identify high-risk issues before they impact your business.