Automated political risk management

• US 8,099,357 B2
• Filed: 02/02/2010
• Issued: 01/17/2012
• 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:
  US12/698,896
• Publication Number:
  US 20100138262A1
• Time in Patent Office: 714 Days
• Field of Search: 705/35, 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 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.