INTERMEDIATE // REAL TIME RESPONSE
MODULE 02 // SCORE ANALYSIS

Risk Score Processing.

Risk scores are probabilistic assessments. Learn to interpret scores correctly, set appropriate thresholds, and avoid common pitfalls in risk-based decision making.

THRESHOLD CALIBRATION

Threshold selection is a business decision, not a technical one. A 0.7 threshold might be appropriate for low-stakes actions but far too permissive for financial transactions. Each action type requires independent threshold calibration.

Start with conservative thresholds and adjust based on observed false positive rates. Track the distribution of scores for legitimate users vs confirmed fraud cases to identify optimal decision boundaries.

Implement multiple threshold tiers: approve (score < 0.3), review (0.3-0.7), and block (> 0.7). This prevents binary decisions and allows human review for ambiguous cases.

< 0.3
Low Risk
Auto-approve. Behavioral patterns consistent with legitimate users.
0.3-0.7
Medium Risk
Review queue. Patterns warrant additional verification.
> 0.7
High Risk
Block or challenge. Strong indicators of suspicious behavior.
KNOWLEDGE CHECK // Q02
Why should different actions have different risk score thresholds?
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