Dynamic Risk Scoring assesses applicants and their activity in real-time based on applicant events (transactions, sign up, login, and so on) received via API. Each event is screened through multiple factors, each weighted differently depending on their importance to a specific company.

Such a flexible approach allows for the creation of customizable risk profiles, adapting dynamically to user-specific criteria and guaranteeing accurate and timely risk assessment.

The multi-factor risk score shows how likely a user is to engage in suspicious or fraudulent behavior. It might be calculated based on multiple factors, such as:

• Onboarding score
• Applicant location
• Payment method check results
• Number of payment accounts used
• Device fingerprint analysis
• Source of Income based on questionnaire (SoI)
• Transaction risk score
• and more

The score helps companies decide whether to investigate their users further, apply additional checks, or reject them.
You can use the risk factors to create a custom risk matrix and categorize the detected risks as low, medium, or high to help companies prioritize them.

How it works

Ongoing risk assessment utilizes risk factors represented by scoring transaction tags. You can create a tag for any risk factor related to your applicants and specify the weight for it.

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Note

The transaction tags differ from the applicant tags as they are associated particularly with transactions versus that of applicant tags, which are always associated with your applicants. The applicant tags can be set up on the Tags page in the Dashboard.

Scoring transaction tags will be added to the rules, letting Sumsub to summarize their weights and produce the final risk score associated with an applicant as a separate output tag.

Here are some tag examples that you can use to express risk factors:

Set up dynamic risk scoring

To set up dynamic risk scoring:

1. Create transaction monitoring tags representing risk factors that you need, like the ones described above, and the name of the tag which will represent the total score, e.g. Total Risk Score.
2. Navigate to Transaction Monitoring Settings -> Tags and select the Score applicant checkbox near the tag.
3. Add the tags you created above to your rules to start scoring transactions based on the transaction type.
4. Create and install a post-scoring rule Calculates applicant assessment aggregates that will constantly summarize the scores from all the rules with the scoring tags and calculate the final score based on the tags weights.
5. Assign the output tag (Total Risk Score) to the post-scoring rule to display the total score.

Step 1: Create tags

To create a tag:

1. In the Dashboard, open the Tags page and click Add tag. The first tag should represent the total score of the dynamic risk assessment.
2. Enter the tag name (Total Risk Score), choose the bar color, and select the Score applicant checkbox to use the tag for scoring applicants as part of ongoing risk assessment, and keep weight to 100%.
3. Save your changes.

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Important

To use tags for ongoing risk assessment, make sure to select the Score applicant checkbox when creating the tag.

Step 2: Add tags to rules

To add a tag to a rule:

1. Create a rule and set up its condition. Let’s imagine the following scenario: we need to track financial risk by alerting all transactions >€5k in the rolling 24h and checking if the applicant residence country belongs to a high-risk countries list.
2. Navigate to Add tags to the transaction and add the necessary scoring tag to rule (GEO in our case for the first rule, and Txn risk for the second).
3. Set up the score for each rule, which will be taken into the calculation of each risk factor.

Now let’s specify the logic of the Total Score calculation:

1. Install the post-scoring rule Calculates applicant assessment aggregates from the Rules Library.
2. Switch to Edit mode.
3. Scroll down to Tag Configuration.
4. Indicate the Output tag which will represent the total sum of all score factors (Total Risk Score in our case)
5. Select the Input tags (risk factors) from the drop-down list (GEO and Txn risk in our case).
6. Save your changes.

Review results

To view the score, navigate to the Transactions section of the applicant profile and check the Assessment block.

Each time the rule containing the scoring tag is triggered, the total risk score in the applicant profile is updated as per the most recent transaction.