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Velocity CRS model is based on a modular and transparent methodology. The CRS can be adjusted and updated in real-time based on significant events, such as, regulatory regime adverse rating, narcotics sanction, terror sanction, credit downgrade, terrorist attack or corruption conviction. Moreover, the methodology is based on multiple layers, where each additional layer captures an amount of risk that is reflected in the final score. Due to the highly modular and transparent equation driven calculations that the CRS model employs, all risk dimensions are readily apparent to the user, providing significant flexibility in either including or excluding a specific risk dimension, based on user’s application requirements.

Risk Management Process

Identify
Identify sources of risk component.
Evaluate
Evaluate and incorporate the risk component with the associated weight factor.
Examine
Examine sources relevant to the risk component.
Test
Test applicable components via quantitative methods.
Release
Interpretation and reporting of the risk assessment results to aid risk mitigation and key decision-making
“At its core, the Velocity Country Risk Score model is a stand-alone reality driven comprehensive risk management tool that can be used by all institutions.”

Unparalleled sources of data

CRS implements a combination of qualitative, quantitative and hybrid data which is normalized for homogeneity, processed for consistency, and corroborated via cross-verifications and triangulations. Underlying data come from a variety of sources including data bases, news reports, event descriptions, surveys and sanction lists to name a few.

In calculating the final CRS, a series of statistical modeling on data is performed to calculate weighting factors and coefficients for intermediate stages of generation of risk indices from risk scores, where a weighted average risk score gives rise to a particular risk index.

Why Unparalleled, You Ask?

CRS source data is robust and clean because of the adaptive data management used by Velocity modeling experts SMEs consult over 50 authoritative sources in conducting hierarchical and layered factor analysis in generating risk scores Besides systematically capturing risk data from authoritative sources, CRS team actively adjusts individual risk scoring based on active monitoring of current events across the globe

Multi-dimensional risk view

The global regulatory landscape is marked by a rapid increase in the volume and complexity of regulatory changes.

  • Dodd-Frank Wall Street Reform and Consumer Protection Act requires organizations to develop and embed fully functioning risk and compliance frameworks
  • Financial Services Authority (FSA) in the U.K. and a steady stream of European Union Directives, such as the European Market Infrastructure Regulation (EMIR), Liikanen Bank Reform and Basel Accords have enhanced corporations’ need to manage their regulatory risk Failure of compliance to the ever-changing regulatory landscape may heighten the legal risk of doing business in countries where such regulatory framework may be either inchoate or even insipient.
The CRS’ integrated risk tool provides a multi-dimensional risk view that assesses the potential for a lack of enforcement and support of various emerging regulatory regimes.

Comprehensive View Of Subcomponents In Systemic Regulatory Risk Index

Assessment is based on risk factors extracted from public data. Risk scores is based on in-house gap analysis in awareness and implement

  • List Rate Risk Data
  • Financial Action Task Force: AML/CTF Mutual Evaluation
  • Foreign Account Tax Compliance Act(FATCA)
  • Basel III
  • Foreign Corrupt Practices Act: Travel Act, UK Bribery Act
  • CISADA Liikanen EMIR

Red, Yellow, Green – It can’t get any simpler than this

The final risk rating for a country is displayed in 3 different color-coding schemes -

Less Distraction, More Focus

The risk score generation process is dynamic and formally reported on a quarterly basis
Risk scores are continuously monitored
Risk identification is conducted on an ongoing basis
All incoming data are checked for authenticity, quality and comprehensiveness
Weighting factors or relevance rating is attached to individually ranked data sources

Country Risk Data Management Process

  • Gather Sources/ Lists
  • Normalize Data
  • List Rate Risk Data
  • Aggregate and Scale
  • Composite Risk Rating

The Alacer Advantage

  • Industry level standards: The CRS model goes through a rigorous process and follows CMMi5 Level industry process standards
  • Comprehensive Risk Analysis: Expanded granularity in risk description provides the benefit of capturing comprehensive risk for the country being analyzed
  • Hybrid Approach: Expanded granularity in risk description provides the benefit of capturing comprehensive risk for the country being analyzed
  • Robust results: The risk review is based on verifying the quality of data, comprehensiveness of coverage, consistency of methodology, and robustness of risk ratings