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Home/ Affinity Risk Model (ARM) – Enrich Financial Risk Assessment
Uncover Hidden Financial Risk from Customer Affinity

Affinity Risk Model (ARM) solution for Banks and NBFCs

Watch Out! There still exist hidden risks due to Customer Affinities. Despite KYC and credit evaluation process as prescribed by regulatory authorities for on-boarding customers and processing loan applications. Nihilent ARM solution helps banks, NBFCs and other lending institutions to uncover the hidden financial risk due to customer affinity and to take pre-emptive measures. The solution also predicts probability of default and aids tracing transaction of the customers through the affinities, which is crucial for financial forensics.

BUYC (Better Understand Your Customer)

For assessing risk of a customer (individual or corporate / organisation) the bank or financial institution follows KYC, AML and credit evaluation techniques, processes and other guidelines and regulations as directed by the regulatory authorities. Still there exist risks which are hidden, and crucial to be revealed in time to the bank or financial institution for taking faster and corrective measure.

KYC is key to establish customers existence and identity before customer (individual or corporate / organisation) is onboarded. But the KYC information becomes outdated almost as soon as the process of onboarding is complete. Nihilent’s ARM enhances existing KYC to BUYC (Better Understand Your Customer ), building context around account-holder through affinity generation.

How Does It Work

Affinity Risk Model (ARM) creates single view of the customer with its affinities. Thus ARM uncovers hidden relationships and reveals the connection of any account holder (Individual, Corporate etc.) and role it plays in the relationship that impacts financial behaviour.

Identifies risk quantitatively of a customer due its affinity and its impact on their financial behaviour. This is not normally seen due to current silo view

ARM identifies the quantum of risk a customer induces due to its financial behaviour to its affinities.

Due to capability of uncovering latent risk, ARM can predict defaults of its customers

ARM has the capability of predicting fraud, as it can identify affinities and their influence and tracking of financial flow [This is part of future release].

How Does It Help

Nihilent’s ARM helps in the following ways:

ARM provides quantitatively latent risk over and above traditional other risk assessment done while onboarding. This enables the onboarding institution to take more informed decision. The latent risk dynamically changes and can be assessed anytime after onboarding, and can be used by the institution as and when required to take appropriate decision.

ARM can provide complete track of financial / fund flows within the institution. If it is from or to outside the institution, the flow source or desitnation respectively will be mapped.

Provides probability of default by the customer in paying EMI will be provided before the due date. This would assist the institution to take necessary proactive steps.

The ARM clearly helps associated entities of an customer and tracking of funds from them. This would aid AML tracking easily and faster.

ARM is perfect tool to aid forensic audit. Its capability to provide entities associated with an customer and the track of the financial flow is extremely useful for forensic audit.

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