4.12.1 Adjusting the Risk Scores
Customer Screening calculates a risk score and a Politically Exposed Person (PEP) risk score for every alert created during screening. The risk score is a relative measure of the risk posed by an individual or entity out of a maximum score of 100. The PEP risk score identifies the relative risk of the individual or entity when the individual or entity is considered as a PEP. Since the risk score can be different from the PEP risk score, the same algorithm is used to derive the risk score and PEP risk score but the underlying scores and weightings on which the calculations are based are different.
The overall risk score of a potential match is calculated as a weighted average of the risk scores generated for the watch list, customer, and external entity records in the match. The risk scores for the watch list, customer, and external entity records are calculated as a weighted average of the risk scores of the contributing risk elements. A risk element is a data field, such as Country of Operation or Occupation, and a risk score is assigned to the risk elements based on its value.
- Risk scores and relative weightings of the risk elements.
- Relative weight of the watch list risk score, customer risk score, and external entity risk score.
- Reference data tables of the specific watch list used in the screening process.