Risk Values launched RV1 on 1 January 2002 and this interview was produced shortly before launch.

Q. Where did the idea for Risk Values come from?

A. After the 11 September, there were horror stories of aeroplanes being turned back if there was a bearded Muslim on board, and of financial services businesses declining to open or deciding to close or close-monitor accounts based solely on fact that the account holder had a Muslim or Arab name. That's racist and there can never be justification for any such attitude. So, I began to wonder if there was any way that a financial institution might be able to gain an insight into its account holders to assess the risk that that person might be the sort of person who might enter into an abusive relationship with the bank, insurance company or other similar business.

Q. Does Risk Values identify terrorists?

A. Not as such: Risk Values identifies people who have a greater propensity to commit financial crime : that might be fraud, money laundering or using an account to fund terrorism. It cannot tell precisely which financial crime that person might commit. The purpose is to help banks and others work out which of their millions of accounts should be subject to close-monitoring.

Q. There are already a number of established anti-money laundering software products on the market. Why is Risk Values different?

A. The first Risk Values product, RV1, is a completely new approach to customer analysis for the purposes of countering financial crime. The first difference is that we aimed to have a product that was affordable by financial services businesses in small and developing countries. So instead of tens of millions of dollars and a demand for massive computing power and support staff, RV1 sits in under half a megabyte and costs only USD1000 per branch per annum including updates. It is close to transparent in use and, in the network version, fits into the company's existing data capture and reporting systems.

The second difference is that any computer program is only as good as the data it is fed. Most so called anti-money laundering software is actually no such thing - it takes transaction data and compares it against data parameters that are dynamic and institution and customer dependent. As a result, there is a delay, sometimes as much as three to five years, before the system has sufficient data to be able to produce meaningful results. With RV1, you get a result out of the box. With one-click installation, and a simple on-line registration, the stand alone version is up and running - and giving final results - in under five minutes. All the user has to do is give it data on a case by case basis. So, the fact that RV1 does not require transaction data means that it can be used for new customers, even before the account is active.

Q. Why was usability in small and developing countries part of the design criteria?

A. Small and developing countries are the chosen frontier for regulators and treasury departments in the developed world. The requirement by regulators across the world that financial services businesses based in their jurisdiction must have a global compliance policy to a minimum of their local standard means that financial institutions with branches in, for example, Africa have a hard choice : stay in the country and, because it is impossible to comply with - for example - customer identification procedures, face the risk of sanctions at home or pull out. RV1 will allow them at least something to wave at a regulator and say "we are doing our best to vet our customers in an environment where developed country standards simply do not exist"

And the demands of Treasury departments and their representative bodies such as The Financial Action Task Force mean that there is a risk that small and poor countries will find themselves banned from international financial networks, with devastating effects on the local economy. So, by being able to demonstrate a commitment to honest business, financial institutions in those countries may be able to argue that they should not be subject to additional pressures.

I don't pretend it's a complete solution to the problems, but it is at least a step in the right direction.

Q. How does RV1 Work?

A. By applying long established principles of personality analysis to the question of how people relate to providers of financial services RV1 is able to identify a high proportion of those who would commit a fraud against the institution or use the accounts for an improper purpose such as moving money to fund terrorism or money laundering.

Q. So, will RV1 prevent money laundering?

A. Of course, not. Nothing will stop a determined criminal who makes up his mind to target a particular financial institution. Anyone who tries to tell any bank or other financial institution that they can make the business proof against money laundering is a liar. But a few months ago, an American banker asked "why can't we just monitor the accounts where the dirty money is?" RV1 makes a big stride towards that objective. After all, when regulators and others say that a financial services business should know its customers, most people interpret that as saying that they should know their customers' money.

With RV1, those businesses can now claim to know their customers, not just their money.