Creating a risk model

A risk model enables you to assess the risk of your customers against the same criteria. You can only have one active risk model at a time. By default, the newest risk model is used. 

To create a risk model, you need to follow these steps:

1. Create a new risk model and choose which customer type it applies to.
2. Add attributes to the risk-scoring categories. For example, one category is 'basic information'. You can give this category a 'profession' attribute to assign risk scores based on the customer's profession. 
3. Set category-level thresholds. This enables you to assign a risk level (low, medium, high, or prohibited) based on the category's risk score across all attributes. 
4. Set category weightings. This enables you to decide how much each risk category affects the overall risk score. 
5. Set overall risk level thresholds. This enables you to assign a risk level (low, medium, high, or prohibited) to the customer based on the weighted category risk scores. 

You can rename or edit the risk models you have created.

Creating a new risk model

1. Log in to ComplyAdvantage Mesh. 
2. Click the Settings cog in the top-right corner. The default page in settings is Risk models. This page shows all the risk models in your account, ordered by the created date.
   
   
3. Click Create at the top right.
4. Type the name of your new risk model into the pop-up. The name must be unique.
   
5. Choose which customer type it applies to, person or company.
6. Click Confirm.
7. The Categories page opens. Here, you choose which attributes (from across five categories) will be checked when this risk model is used.

For more details, see: Creating a risk model

Adding category attributes

The categories page has five category tabs. You assign attributes to each category that you want to include in your risk score.

Below is a screenshot of the attributes for the category 'Basic information'.

Add your attributes and scores. For example, for the 'source of wealth' attribute, you can add a 'salary' value with a score of 5 and a 'savings' value with a score of 2. 

For more details, see: Adding category attributes

Setting category thresholds

A risk level is assigned to the category, depending on the attribute scores. After you have added at least one attribute to a category, you can set the category's risk level thresholds. 

Our example above set scores of 5 and 2 for parameters in the 'source of wealth' attribute. That means the maximum score available is 5. In the screenshot below, we assign a category risk level of 1 for scores of 0 to 1, medium for 2 to 3, and high for 4 to 5.

If you add more attributes to the category, the scores are added together.

Set thresholds for the categories you want to include in your risk model. If you do not want to include a category, you can leave it blank.

For more details, see: Setting category thresholds

Changing category weightings

After you have added all your attributes and set your category thresholds, the next page enables you to adjust the category weightings. 

This allows you to put more emphasis on a category that is more important to you. The overall risk score is calculated by multiplying the category score by the category weighting. The default weighting for each category is 1.

For more details, see: Changing category weightings

Setting overall risk level thresholds

The final step is to set overall risk level thresholds. Based on the calculated risk score, they decide which risk level to assign to a customer. 

Bearing in mind the weightings you set, you have to define upper boundaries for each risk level yourself.

For more details, see: Setting overall risk level thresholds

Make your risk model active

After you've set up your risk model categories and thresholds, you need to finish creating the risk model and make it active.

Once your risk model is active, any new risk scores will be calculated using this risk model.

For more details, see: Making a new risk model active

Editing or renaming a risk model

You can rename or edit a risk model. Editing a risk model allows you to change the settings of a previous risk model and to save a new version of it. The previous version is kept for audit purposes. 

For more details, see: Editing or renaming a risk model