Saxo Bank Updates Client Risk Model Rollout

Saxo Bank has been rolling out a significant update to its client risk model, with this transition set to continue over the coming months.

The new model aims to refine the evaluation of client risk profiles, leveraging advanced data analysis to enhance accuracy and compliance. For most clients, this will result in either no change or a reduction in their risk score. Consequently, there will be fewer requirements for Out-of-Due-Diligence (ODD) checks, leading to more cases processed automatically. This streamlining is expected to improve efficiency and client experience by minimizing unnecessary administrative hurdles.

Saxo Bank Updates Client Risk Model Rollout

However, the updated model also means that some clients may experience an increase in their risk scores. For these clients, this could lead to the need for more detailed due diligence and, in rare cases, potential offboarding if the risk levels are deemed too high. The decision to offboard is expected to be infrequent and reserved for cases where the risk factors are significantly elevated.

The new Anti-Money Laundering (AML) risk scoring framework at the heart of this update assesses potential financial crime risks by analyzing various criteria. These include demographic information, geographic exposure, connections to politically exposed persons (PEPs), and alignment with sanctions lists. This comprehensive evaluation allows Saxo Bank better to allocate its resources towards due diligence and surveillance activities. The ultimate goal is to ensure strict compliance with legal and regulatory requirements while mitigating financial crime threats.

In the initial phase, the rollout focuses primarily on private clients. The process will subsequently extend to joint accounts and corporate clients. At this time, asset managers are not required to undertake any specific actions related to this transition. The adjustment balances rigorous risk management with enhanced operational efficiency, contributing to a more robust and compliant financial environment.

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