Judging the risk associated with an entity based on profiling may provide statistically viable results, but results in unwanted false-positive and false-negative results, which business impact may be unbearable.
True risk needs to take into account the ability to dynamically defined what is an entity, how it relates to other entities, and more importantly, how does these entities impact the risk associated with the original entity. For example, John Smith may be a perfectly legitimate business person, but being the son in low of a notorious Mafia boss, is likely to significantly increase his indirect risk. A bank may want to be informed of such relationship, so guaranties can be used to mitigate that risk.
Element of Risk supports: