The current algorithms vary in the way risk is calculated,
grouped or summed up across entities and related parties. We have some risk
models that work on the average such as “Maximum Category Average”, the
“Average Category Average with Weights” and many more. Some models of risk work
based on a combination of average and maximum scores such as the “Maximum
Category Average Score”.
KYC Portal CLM allows you to setup the risk algorithm model to
be different across programmes, allowing for use cases where your risk
perception varies between one product/service and another.
All of these risk models however allow clients to have the
full flexibility of defining and managing all risk parameters, weights, risk
categories, bands as well as rules of permutations giving you full flexibility
to manage your version of KYC Portal CLM based on latest requirements.
This new feature is delivering yet another risk model as
part of the product offering called the “Maximum Entity Risk Band”. This
scoring method is only available at Application Level (meaning the entire counterparty with all the related parties). This algorithm assesses the scores of all the entities (related
parties) within the application (including the root entity itself). This
algorithm picks the highest scored entity within the application, takes the
equivalent band score (example HIGH) based on your configuration, and displays
that band as the score of the entire Application.
As an example.
You set the risk brackets in KYC Portal CLM as per following.
- Low 0 – 30
- Medium 31 - 80
- High 81 - 100
If you have an
application with the following entities in the structure and their respective
Company A (Root Entity) with score of 25% (Low
- UBO 1 with score of 20% (Low risk band)
- UBO 2 with score of 85% (High risk band)
Score would be High (as UBO 2 has the highest score out of all the entities and
it has a High band score).