How does the risk rating section work? (AML)

With this new section, you can parameterize the impact rating and frequency of risks according to your organization's methodology.

Within AML risk management, it is of vital importance to be able to customize the rating of risk frequency and impact, as these are two key dimensions to consider when assessing and managing risks effectively.

How does the risk impact rating work? 

This rating will come with a preconfigured list with the four categories of associated risks: legal, reputational, contagion, and operational. To edit this list, go to the gear icon, select AML, and then the "Risk Rating" option; there, you will find the list to edit and add associated risks.

By what methods can I get the final rating?

You can have the final grade by the method "By average," where at the end of each grade, based on the selected variables, the weight of the grade is multiplied by the weight of the option, and finally, the results of the multiplication previously done are added together. Or the "By highest rating" method, where only the variable with the highest weight is counted. 

To do this, locate under the title "Risk rating" the option "Type of calculation," choose the one you consider necessary, and click on the "Save" button.

How do we add associated risks?

In the "Risk Rating" section, you can create a list of new associated risks or modify the names and weights of the preconfigured ones. To create a risk, click the "Create Variable" button; here, you must give it a name and weight. Then, you will be able to give a description of the created risk and the impact levels.

Remember that the sum of the weights of the variables must always be 100%, and in order for the changes made in the parameterization to be reflected, it is necessary to click on the "Save" button.

How to edit and delete a variable (associated risk)?

Go to the risk you want to edit and click on the "pencil" icon; all the fields of the risk will appear so you can modify what you want. To delete any associated risk, click on the "trash can" icon, but remember that the rating of the risks to which it is associated will be affected, and if it is already assigned, it cannot be deleted.

Finally, click the "Save" button to register your changes.

How does the risk frequency rating work? 

To parameterize the risk frequency rating, you must enter the gear icon, select AML, and then the option "Risk rating," here select the option "Frequency variables." In this section, you can choose between a direct or cause rating. 

Direct rating: If you select this type of rating, the levels in the risk frequency rating will be according to the levels set in the matrix setting corresponding to the frequency (vertical axis).

Rating by causes:  In this selection, you will be able to create the levels of probability of occurrence for the causes. Click the Create Range button and create the appropriate levels by choosing a percentage between 0- and 100.

Important: You can edit the created ranges. However, you will delete an existing level or range that has been used. In that case, you must replace it with another existing one within the variable because the frequency can only be left with qualification. 

For the cause rating, you must also choose the type of calculation, by average or by highest rating. Finally, click the green "Save" button to make the parameterization effective.

Now, you can go to the risk section, create a new risk, and perform the impact and frequency rating according to the organization's methodology.

How does risk rating work in the anti-money laundering system? AML

When creating a risk, the "Impact" and "Frequency" fields will appear in the pop-up window, which can be rated according to the previously chosen settings. 

Impact: To rate the impact, the associated risks previously created will be displayed, and you must assign a rating to each one. 

Frequency: The frequency can be rated directly or by causes:

Direct: The list of all the variables determined by the organization will be displayed without more details on each one.

Causes:  Here, you can associate causes to your risk and see the previously associated causes. After associating the corresponding causes, you must give a rating to each of the associated causes; the rating options are those previously created in the parameterization section of your organization. 

After rating, click save; now, you can see your risk in the heat map.