Automated political risk management

• US 7,711,637 B2
• Filed: 02/07/2007
• Issued: 05/04/2010
• Est. Priority Date: 01/30/2001
• Status: Expired due to Term

• Current Assignee: Regulatory DataCorp, Inc. (Moody's Corporation)
• Original Assignee: Goldman Sachs & Company (Goldman Sachs Group Incorporated)
• Inventors: Lawrence, David
• Primary Examiner(s): Oyebisi, Ojo O
• Application Number:
  US11/672,373
• Publication Number:
  US 20070276751A1
• Time in Patent Office: 1,182 Days
• Field of Search: 705/38
• US Class Current: 705/38
• CPC Class Codes: G06Q 10/067 Enterprise or organisation modelling
• CPC Class Codes: G06Q 20/04 Payment circuits
• CPC Class Codes: G06Q 20/4016 involving fraud or risk level assessment in transaction processing
• CPC Class Codes: G06Q 20/403 Solvency checks
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

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.

Claims

1. A processor-implemented method to facilitate management of risk related to political exposure associated with a financial transaction, comprising:

calculating by a processor a first category political risk score based on financial transaction data associated with the transaction;

calculating a second category political risk score based on the financial transaction data;

calculating, based on the first and second category political risk scores, an overall transaction political risk quotient associated with the financial transaction;

aggregating the overall transaction political risk quotient with a plurality of overall transaction political risk quotients associated with a plurality of financial transactions to identify an aggregate political risk quotient associated with a financial institution;

comparing the aggregate political risk quotient with a risk quotient threshold;

determining a suggested action associated with the financial transaction; and

facilitating the transaction with the determined suggested action.

2. The processor-implemented method of claim 1, wherein the first catergory political risk score includes a first numerical value that is an indication that a participant in the financial transaction is at least one of:

(i) an elected official, (ii) a bureaucrat, (iii) a political appointee, (iv) a World Bank Official, and (v) a military personnel.

3. The processor-implemented method of claim 1, wherein the overall transaction political risk quotient is further calculated based on weight to said first and second numerical values.

4. The processor-implemented 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 processor-implemented method of claim 1, 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.

6. The processor-implemented method of claim 1, wherein the financial transaction is associated with the financial institution, the method further comprising:

calculating an average risk quotient for the financial institution; and

generating, based on the average risk quotient for the financial institution, a suggested action for the financial institution.

7. The processor-implemented method of claim 1, wherein the financial transaction is associated with the financial institution, the method further comprising:

calculating a mean risk quotient for the financial institution; and

generating, based on the mean risk quotient for the financial institution, a suggested action for the financial institution.