KYC Compliance Risk Level Calculator
Assess the KYC compliance risk level of a customer based on key due diligence factors including country risk, business type, transaction volume, PEP status, and adverse media exposure.
Formula
Composite Risk Score (CRS) is calculated as a weighted sum of normalised factor scores:
CRS (0–100) = 100 × [ (0.25 × Ncountry) + (0.20 × Nbusiness) + (0.15 × Ntxn) + (0.20 × Npep) + (0.15 × Nadverse) + (0.05 × Nsource) ]
Where each Nfactor = Raw Score ÷ Maximum Raw Score for that factor (normalised to 0–1).
Transaction Volume Scoring:
- < $50,000 → Score 1 (Low)
- $50,000 – $499,999 → Score 2 (Medium)
- $500,000 – $4,999,999 → Score 3 (High)
- ≥ $5,000,000 → Score 4 (Very High)
Risk Level Thresholds:
- 0–30 → Low Risk (SDD)
- 31–55 → Medium Risk (CDD)
- 56–75 → High Risk (EDD)
- 76–100 → Very High Risk / Decline (EDD or Rejection)
Automatic Escalation Rules: Sanctions/Watchlist match forces score ≥ 75; Foreign PEP forces score ≥ 65, regardless of weighted calculation.
Assumptions & References
- Methodology is based on a risk-based approach (RBA) as recommended by the Financial Action Task Force (FATF) Recommendations (2012, updated 2023).
- Country risk ratings align with FATF Grey List / Black List designations and the Basel AML Index.
- PEP definitions follow FATF Glossary and the EU's 4th/5th/6th Anti-Money Laundering Directives (AMLD).
- Factor weights are illustrative and should be calibrated to your institution's specific risk appetite and regulatory jurisdiction.
- This calculator does not replace a full Customer Due Diligence (CDD) programme or legal/compliance advice.
- Adverse media screening should be conducted against recognised databases (e.g. Refinitiv World-Check, Dow Jones Risk & Compliance, LexisNexis).
- Source of funds documentation requirements follow FATF Recommendation 10 (Customer Due Diligence).
- All Suspicious Activity Reports (SARs) must be filed in accordance with local jurisdiction requirements (e.g. FinCEN in the USA, NCA in the UK).