Automated political risk management
A risk management method and system for facilitating analysis and quantification of risk associated with politically exposed persons is disclosed. A computerized political risk management system maintains a database relating individuals to politically sensitive positions and world events. A rating system is used to assess risk based upon criteria such as a position held, historical data and/or interpretation of world events. The system can generate a risk quotient or other rating based upon a weighted algorithm applied to the criteria. The risk quotient is indicative of risk associated with an account. Actions commensurate with a risk quotient can be presented to an institution to help the institution properly manage risk associated with a politically exposed person. A log or other stored history can be created such that utilization of the system can mitigate adverse effects relating to a problematic account. Mitigation can be accomplished by demonstrating to regulatory bodies, shareholders, news media and other interested parties that corporate governance is being addressed through tangible risk management processes.
1. A processor-implemented method for facilitating management of risk related to political exposure associated with a financial transaction, comprising:
receiving data relating to a financial transaction involving a politically identified person;
structuring the received data according to political risk quotient criteria;
calculating, via a processor, a political risk quotient based on the structured data;
comparing the political risk quotient with a risk quotient threshold to determine a suggested action for proceeding with the financial transaction; and
facilitating the financial transaction with the determined suggested action.
2. The method of claim 1 , wherein the political risk quotient comprises a plurality of political risk scores.
3. The method of claim 2 , wherein the financial transaction is associated with a financial institution, the method further comprising:
aggregating the political risk quotient with a plurality of political risk quotients associated with a plurality of financial transactions associated with a financial institution;
comparing the aggregate political risk quotient to a risk quotient threshold to assess exposure of the financial institution to political risk; and
generating, based on the assessment, a suggested action for the financial institution.
4. The method of claim 1 , wherein the suggested action is at least one of: (i) a recommendation to decline the financial transaction; (ii) a recommendation to gather additional information associated with the financial transaction; (iii) a recommendation to monitor the financial transaction; and (iv) notifying an authority.
5. The method of claim 1 , wherein the political risk quotient criteria further comprise:
a position held by an account holder, a country in which the position is held, how long the position has been held, a strength of the position, a veracity of previous dealings with persons from the said country, and a propensity of people in similar positions to engage in unlawful or unethical transactions.
6. The method of claim 1 , wherein the financial transaction is at least one of: (i) a request to open a new financial account; and (ii) a financial transaction associated with an existing financial account.
7. The method of claim 2 , wherein the financial transaction is associated with a financial institution, the method further comprising:
calculating a mean political risk quotient for the financial institution through analysis of a plurality of political risk quotients; and
generating, based on the mean political risk quotient for the financial institution, a suggested action for the financial institution.
8. A processor-implemented method for facilitating management of risk related to political exposure associated with a financial transaction, comprising:
calculating, via a processor, a political risk score for each of a plurality of political risk categories based on financial transaction data associated with a financial transaction;
calculating, based on the plurality of political risk category scores, an overall transaction political risk quotient associated with the financial transaction;
comparing the overall transaction political risk quotient with a risk quotient threshold to determine a suggested action for proceeding with the financial transaction; and
facilitating the financial transaction with the determined suggested action.
9. The method of claim 8 , wherein the financial transaction is associated with a financial institution, the method further comprising:
aggregating the overall transaction political risk quotient with a plurality of political risk quotients associated with a plurality of financial transactions to determine an aggregate political risk quotient associated with the financial institution; and
generating, based on the aggregate political risk quotient associated with the financial transaction, a suggested action for the financial institution.
10. The method of claim 8 , wherein the overall transaction political risk quotient is further calculated based on weights applied to each of the plurality of political risk categories.
11. The method of claim 8 , wherein the suggested action is at least one of: (i) a recommendation to decline the financial transaction; (ii) a recommendation to gather additional information associated with the financial transaction; (iii) a recommendation to monitor the financial transaction; and (iv) notifying an authority.
12. The method of claim 8 , wherein the financial transaction is at least one of: (i) a request to open a new account; and (ii) a transaction associated with an existing account.
13. The method of claim 8 , wherein the financial transaction is associated with a financial institution, the method further comprising:
calculating a mean political risk quotient for the financial institution though analysis of a plurality of political risk quotients; and
generating, based on the mean political risk quotient for the financial institution, a suggested action for the financial institution.
14. The method of claim 8 , wherein the overall transaction political risk quotient comprises a scaled numeric or a scaled alpha- numeric value.
15. A system for facilitating management of risk related to political exposure associated with a financial transaction, comprising:
a memory;
a processor disposed in communication said memory, and configured to issue a plurality of processing instructions stored in the memory, wherein the processor issues instructions to:
receive data relating to a financial transaction involving a politically identified person;
structure the received data according to political risk quotient criteria;
calculate a political risk quotient based on the structured data;
compare the political risk quotient with a risk quotient threshold to determine a suggested action for proceeding with the financial transaction; and
facilitate the financial transaction with the determined suggested action.
16. The system of claim 15 , wherein the financial transaction is associated with a financial institution and wherein the processor issues instructions to:
aggregate the political risk quotient with a plurality of political risk quotients associated with a plurality of financial transactions associated with the financial institution;
compare the aggregate political risk quotient to a risk quotient threshold to assess exposure of the financial institution to political risk; and
generate, based on the assessment, a suggested action for the financial institution.
17. The system of claim 15 , wherein the suggested action is at least one of: (i) a recommendation to decline the financial transaction; (ii) a recommendation to gather additional information associated with the financial transaction; (iii) a recommendation to monitor the financial transaction; and (iv) notifying an authority.
18. The system of claim 15 , wherein the political risk quotient criteria comprise: a position held by an account holder, a country in which the position is held, how long the position has been held, a strength of the position, a veracity of previous dealings with persons from the said country, and a propensity of the people in similar positions to engage in unlawful or unethical transactions.
19. A system far facilitating management of risk related to political exposure associated with a financial transaction, comprising:
a memory;
a processor disposed in communication with said memory, and configured to issue a plurality of processing instructions stored in the memory, wherein the processor issues instructions to:
calculate, via a processor, a plurality of category political risk scores based on financial transaction data associated with a transaction;
calculate based on the plurality of category political risk scores an overall transaction political risk quotient associated with the financial transaction;
compare the overall transaction political risk quotient with a risk quotient threshold to determine a suggested action for proceeding with the financial transaction; and
facilitate the financial transaction with the determined suggested action.
20. The system of claim 19 , wherein the financial transaction is associated with a financial institution, wherein the processor issues instructions to:
aggregate the overall transaction political risk quotient with a plurality of political risk quotients associated with a plurality of financial transactions to determine an aggregate political risk quotient associated with a financial institution; and
generating, based on the aggregate political risk quotient associated with the financial institution, a suggested action for the financial institution.
21. The system of claim 19 , wherein the overall transaction is political risk quotient is further calculated based on weights applied to each of the plurality of political risk categories.