Automated global risk management

• US 8,140,415 B2
• Filed: 03/20/2001
• Issued: 03/20/2012
• Est. Priority Date: 03/20/2001
• 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, Junnarkar, Ajay
• Primary Examiner(s): Subramanian, Narayanswamy
• Application Number:
  US09/812,627
• Publication Number:
  US 20020138407A1
• Time in Patent Office: 4,018 Days
• Field of Search: 705 35- 39, 235/440
• US Class Current: 705/35
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 30/02 Marketing; Price estimation or determination; Fundraising
• 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 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis
• CPC Class Codes: G06Q 40/08 Insurance
• CPC Class Codes: G06Q 40/10 Tax strategies

Abstract

A computerized risk management method and system for facilitating analysis and quantification of risk associated with a financial transaction. An automated global risk management system maintains a database relating risk variables including world events government advisories, and other information sources with potential risk for a financial institution. The system generates a risk quotient or other rating based upon a weighted algorithm applied to the criteria, wherein the risk quotient is indicative of risk associated with a financial transaction or account. The quotient can be monitored on a periodic basis, during the course of a transaction, or on demand. Actions commensurate with a risk quotient can be presented to a financial institution to help the institution properly manage risk associated with a particular entity or transaction. A log or other stored history can be created such that utilization of the system can mitigate adverse effects relating to a problematic account.

Claims

1. A computer-implemented method for managing risk related to a financial transaction, the method comprising:

gathering into a computer storage legal and reputational risk information related to a proposed financial transaction, the legal and reputational risk information including

duty of disclosure risk information, and

financial infraction prevention information;

receiving into the computer storage transaction information relating to details of the proposed financial transaction;

structuring with a processor the received transaction information according to risk quotient criteria associated with the gathered legal and reputational risk information;

assigning a numerical value representative of risk to the structured transaction information;

assigning the structured transaction information to an associated risk category having a category weight;

calculating a risk quotient by multiplying a weighted numerical value by the category weight, wherein the weighted numerical value is derived from the assigned numerical value of the structured transaction information;

determining a suitability of the proposed financial transaction according to the received transaction information and the calculated risk quotient;

generating a suggested action in accordance with the risk quotient;

generating a structured history derived from the received transaction information; and

creating a report from the generated structured history, the calculated risk quotient, the determined suitability, and the generated suggested action.

2. The method of claim 1, additionally comprising:

storing the received transaction information, the risk quotient and the suggested action; and

generating a diligence report referencing the stored information.

3. The method of claim 2, wherein the diligence report comprises the received transaction information relating to details of the financial transaction and actions taken in response to the risk quotient.

4. The method of claim 1, wherein the suggested action is additionally responsive to the transaction information received.

5. The method of claim 1, wherein the suggested action comprises refusing to perform the financial transaction.

6. The method of claim 1, wherein the suggested action comprises blocking acceptance of an account.

7. The method of claim 1, wherein the suggested action comprises notifying an authority.

8. The method of claim 1, wherein the received transaction information comprises an identity of a high risk entity and the high risk entity'"'"'s relationship to an account holder.

9. The method of claim 1, wherein the received transaction information comprises an identity of a secrecy jurisdiction.

10. The method of claim 1, wherein the received transaction information is gathered electronically.

11. The method of claim 1 additionally comprising aggregating risk quotients relating to a financial institution to assess a level of identified risk to which the financial institution is exposed.

12. The method of claim 1, additionally comprising calculating an average risk quotient associated with the financial transaction.

13. The method of claim 1 wherein the financial transaction comprises opening a financial account.

14. The method of claim 1, wherein the risk quotient is indicative of an amount or monetary cost of defending an adverse position or a fine associated with a financial institution of the proposed financial transaction.

15. The method of claim 1, wherein the gathering of the legal and reputational risk information and the receiving of the proposed transaction information is achieved responsive to an automated data provider output, with the risk quotient being adjusted accordingly.

16. The method of claim 1, wherein the risk quotient is generated in response to an event or according to a request.

17. The method of claim 1, further comprising generating a total risk quotient by aggregating the risk quotient of all associated risk categories.

18. The method of claim 1, wherein the assigned numerical value and the category weight are user-defined.

19. The method of claim 1, wherein the gathered risk information includes information related to regulatory risk, risk advisories, historical data and world events.

20. A computerized system for managing risk associated with a financial transaction, the system comprising:

a computer server accessible with a network access device via a communications network and executable software stored on the server and executable on demand, the software operative with the server to cause the system to;

gather legal and reputational risk information related to a proposed financial transaction, the legal and reputational risk information including

duty of disclosure risk information, and

financial infraction prevention information;

receive transaction information relating to details of the proposed financial transaction;

structure the received transaction information according to risk quotient criteria associated with the gathered legal and reputational risk information;

assign a numerical value representative of risk to each structured transaction information;

assign the structured information to an associated risk category, wherein the risk category is associated with a category weight;

calculate a risk quotient by multiplying a weighted numerical value by the category weight, wherein the weighted numerical value is derived from the assigned numerical value of the structured transaction information;

determine a suitability of the proposed financial transaction according to the received transaction information and the calculated risk quotient;

generate a suggested action in accordance with the risk quotient;

generate a structured history derived from the received transaction information; and

create with the processor a report from the generated structured history, the calculated risk quotient, the determined suitability, and the generated suggested action.

21. The computerized system of claim 20, wherein the transaction information is received via an electronic feed.

22. The computerized system of claim 20, wherein the transaction information received is generated by a government agency.

23. The computerized system of claim 20 wherein the network access device is a personal computer.

24. The computerized system of claim 20 wherein the network access device is a wireless handheld device.

25. A non-transitory computer-readable medium having computer-executable program instructions residing thereon, wherein the computer-executable program instructions are issuable by a computer to:

gather legal and reputational risk information related to a proposed financial transaction, the legal and reputational risk information including

duty of disclosure risk information, and

financial infraction prevention information;

receiving into the computer storage transaction information relating to details of the proposed financial transaction;

structure the received transaction information according to risk quotient criteria associated with the gathered legal and reputational risk information;

assign a numerical value representative of risk to the structured transaction information;

assign the structured transaction information to an associated risk category having a category weight;

calculate a risk quotient by multiplying a weighted numerical value by the category weight, wherein the weighted numerical value is derived from the assigned numerical value of the structured transaction information;

determine a suitability of the proposed financial transaction according to the received transaction information and the calculated risk quotient;

generate a suggested action in accordance with the risk quotient;

generate a structured history derived from the received transaction information; and

create a report from the generated structured history, the calculated risk quotient, the determined suitability, and the generated suggested action.