Risk Scoring for Non-Bank Financial Institutions

9 Pages Posted: 18 Dec 2018

Date Written: November 8, 2018


We propose a method to assess the risk of dealing with non-banking financial institutions utilizing 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.

Keywords: financial networks, counterparty risk, systemic risk, banking, payments, cryptocurrency, fintech

JEL Classification: C38, D81, K24, G28

Suggested Citation

Venegas, Percy, Risk Scoring for Non-Bank Financial Institutions (November 8, 2018). Available at SSRN: https://ssrn.com/abstract=3280738 or http://dx.doi.org/10.2139/ssrn.3280738

Percy Venegas (Contact Author)

Economy Monitor ( email )

Costa Rica

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