How to perceive business risks systematically and comprehensively?

A universal thinking framework

Business risk perception can be divided into two perspectives. One is internal or external, and the other is active or passive. They make up a two-dimensional coordinate system that divides business risk perception into four quadrants. I will discuss each quadrant, what it means and how to build an operation mechanism.

I. External and Active risk perception (Intelligence monitoring)

This kind of perception refers to intelligence monitoring of the fraudsters' market, including key roles of industry upstream and downstream, methods and tools of fraudsters, clues of targeted business and cost and profit of fraud. 

There are usually two steps to establish an intelligence dashboard, finding the intelligence source and automating the monitoring process. 

II. Internal and Active risk perception (Data analysis)

This kind of perception refers to both daily and case data analysis. You need to pay attention to the centralized distribution and abnormal distribution of the data. 

III. Internal and Passive risk perception (Dashboard and alarm)

This kind of perception refers to building a set of data dashboards of common business and fraud detection indicators and setting important alarms based on historical data.

For example, for most businesses, it is necessary to create a dashboard for request volume and time and set some alarms such as percentage change in request volume over ten minutes and day-over-day percentage growth in request volume.

These dashboards and alarms can help us perceive business risks in time.

IV. External and Passive risk perception (Feedback and complaint)

This kind of perception refers to feedback and complaints reported by users and government departments. It usually means that the risk has been leaked and perceived by external users.

To handle the risk quickly, a process containing accept, filter, clean, synchronization, problem localization, problem-solving and result feedback should be established.

Above all, using this thinking framework can help us perceive business risks systematically and comprehensively.