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Developing Seller Risk Profiles

Once the various departments within the investor organization have identified key performance indicators Seller Risk Administration is responsible for the development of risk profiles for assigning a risk ranking and/or grade for its sellers. This is an iterative process and as previously indicated a key performance indicator and the associated risk will vary depending on whom you ask within the investor organization. In the development of seller risk profiles there are two (2) major approaches.
  • Approach 1 - Each key performance indicator or selected key performance indicators are individually weighted and scored. A final risk ranking is presented for the seller based on the weighted score of all performance indicators being considered in the risk profile.
  • Approach 2 - Performance categories are created and given a statistical weight. Individual key performance indicators are then assigned to a performance category and given a statistical weight inside of the performance category.


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