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Risk scoring for non-bank financial institutions
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  • Percy Venegas
Percy Venegas
Economy Monitor
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Abstract

We propose a method to assess the risk of dealing with non-banking financial institutions that utilizes data mining, machine learning, and, historical proxies of KYC (Know Your Customer) screenings. The risk scores are suitable to evaluate both traditional money services businesses and Fintech companies (including cryptocurrency payments and blockchain infrastructure operators). The main users are banks and businesses worldwide that need to assess counter-party risk under uncertainty, as non-banks are often less regulated than other financial institutions.