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Using the Product Risk Assessment Task

The products owned or utilized by a customer offer invaluable insights into their activities and the depth of their relationship with an institution. However, each product offered or associated to a client carries its own risk. Understanding that risk is essential for effectively evaluating and managing the overall risk exposure of both the client and the institution.

The Product Risk Assessment task provides the capability to evaluate the products, for which an entity is an owner. It calculates a risk score for each product and an overall product risk that is then outputted to the entity which may then be used in calculating the overall entity risk.

The following document details the user interaction and configuration of the Product Risk Assessment task and providers two examples as to its use.

Task Overview​

The Product Risk Assessment task offers a comprehensive visualization of an entity’s products and their risk assessment results.

Product Risk Assessment Task

The above provides an example of a completed Product Risk Assessment task. This task is a system task and will automatically run the calculations once started and when successful will automatically be completed. When completed a user may click into the task to view the results.

Each product is displayed as a row and may be expanded to view the assessment outcome for that product. The risk score and value for each product is displayed in the Risk column.

The expanded assessment outcome displays the following:

  • Risk Factor Group. In the above this is Product
  • Data base field name of each risk factor included in the risk factor group and their calculated value. Both bookingEntity and productType are risk factors. The product Business Account Premium has a booking entity of Bank – Argentina Branch and a productType of Business Account Premium
  • The columns under the assessment outcome provides the rating of each value, the weight of the risk factor and the total algorithm calculation for that Risk Factor Group.

The product illustrated above has a risk assessment score of 2.4 which is translated to a value of medium. This translation is derived from the threshold model which states that any product with a risk score between 2 – 2.99 is medium.

Product Risk Threshold Model

The products included in the task are determined by the configuration option ‘Save to Entity’ which is configured at a task level in the journey scheme.

When 'Save to Entity' is disabled, only those products that have been newly added or edited within the current journey will undergo risk assessment scoring and rating calculation. These assessed products are then displayed in the task.

Conversely, when 'Save to Entity' is enabled (with 'Only Assess Products Created/Updated Within Journey' disabled), all products associated with the entity as its owner are displayed in the finalized task. However, only products that have been newly added or edited during the ongoing journey are subject to score and rating calculation. The remaining products are displayed with their most recent verified risk score and rating (i.e. risk is not recalculated for verified products unless they are edited in this journey). If verified products should be reassessed, the 'Create Onboarded Product Drafts' task can be used to automatically create product drafts that will be included in the Product Risk Assessment..

Product Risk Calculation​

Product risk is calculated in accordance with the following.

1. Newly added or edit, owned, products are selected. The Product Risk Assessment task will identify the products for which the entity is an owner and that have been newly added or edited in the journey.

2. Risk assessment is run for each product. For each applicable product the risk assessment model, as defined in the task configuration, is run. The risk assessment model is based on the following:

  • A risk model: the risk factors to be evaluated.
  • A configuration collection: the values and scores assigned to every possible input of the risk factors.
  • A threshold model: a model that translates a numerical score to a descriptive value for example High, Medium or Low.

The model set works together to evaluate data and output a risk score. For a comprehensive explanation of risk model configuration, please refer to the risk user guide.

3. The results are combined into a single value.

In the previous step, we have produced a list of values - one numeric score for each product that was evaluated. However, if the ‘Save to Entity’ configuration option is enabled the numeric score is then combined into one value. Users can configure if that combination is going to be calculated using:

  • max: chooses the highest
  • min: chooses the lowest
  • sum: adds all values together
  • avg: calculates the average ([sum of values]/[number of values])

4. A final number is produced.

This is the overall risk score of all products. This value is saved to a data base field as defined in the task configuration and outputted to the entity.

5. The number is translated into a descriptive label.

Sometimes a number isn't enough of a description, and a label is needed to describe what the risk score means. Here the product risk threshold model is again used to translates a numerical score to a descriptive value.