1. Introduction to Groups

Groups are an essential feature within the system, allowing users to categorize entities based on predefined criteria. They serve as a fundamental component in risk assessment, enabling organizations to apply rules efficiently and manage entity risk at scale.

1.1 Purpose of Groups

Groups help organizations:

• Apply Rules to Specific Entities: Determine which groups a rule should apply to or exclude.

• Manage Risk Classification: Assign a baseline risk score (0-100) to groups, reflecting the inherent risk associated with entities belonging to that group.

• Automate Entity Assignments: Automatically add or remove entities from groups when certain conditions are met, such as rule triggers.

• Align with Business-Wide Risk Assessment (BWRA): Transfer inherent risk from BWRA-defined assessments to specific entities.

2. Defining Groups in the System

Users can create and manage groups through the system interface, specifying key parameters to define their functionality.

2.1 Group Parameters

• Name: Each group requires a unique name to identify its purpose.

• Baseline Score: The risk score assigned to the group, ranging from 0 to 100. This score represents the estimated probability of an entity within the group being linked to criminal activity.

Example:

Group Name: "High-Risk Jurisdictions Entities"
Baseline Score: 80

2.2 Group Associations

Entities can be mapped to one or multiple groups. This allows:

• Flexible Risk Assignment: Entities can inherit different risk levels depending on the groups they belong to.

• Dynamic Adjustments: Entities can be added or removed from groups based on rule triggers or manual updates.

• Compliance Enforcement: Groups help enforce regulatory compliance by segmenting entities based on predefined risk assessments.

3. Group Management Features

3.1 Creating a Group

To create a new group, users must provide:

• Name (String, must be unique)

• Score (Integer, 0-100) representing the baseline risk level

Upon creation, the system assigns a unique identifier to the group.

3.2 Applying Rules to Groups

• Rules can be configured to apply to specific groups or explicitly exclude certain groups.

• At rule trigger, the system can add or remove groups to/from involved entities dynamically.

3.3 Updating a Group

Users can modify existing groups by:

• Renaming the group to reflect new classification criteria.

• Adjusting the baseline score to align with updated risk assessments.

• Adding or removing entities based on business needs or regulatory changes.

3.4 Deleting a Group

Groups that are no longer relevant can be removed from the system. Deleting a group will dissociate all linked entities, so careful review is recommended before deletion.

4. Groups and Risk Assessment

The baseline score of a group is directly tied to the risk evaluation framework. This means:

• Higher baseline scores indicate higher inherent risk associated with the group’s entities.

• Groups act as a bridge between BWRA risk assessments and operational rules applied to entities.

• By assigning entities to groups, organizations can transfer inherent risk and adjust monitoring efforts accordingly.

5. Summary

Groups provide a structured way to classify and manage entities, ensuring that risk-based rules are applied effectively. By defining groups with baseline risk scores, users can align their risk management framework with regulatory requirements and automate entity segmentation. The ability to dynamically add or remove entities from groups ensures that risk assessments remain up-to-date and responsive to changing compliance needs.