Anonymized Transaction Scoring System for Fraud Detection
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Solution Overview
Problem
Existing systems for processing transactions between entities lack the ability to securely exchange user scoring information without compromising client data privacy, and they are vulnerable to fraud due to limited access to recipient entity information.
Innovation Solution
A method and system that allow entities to exchange anonymized user scores without accessing each other's data, using data anonymization and encryption algorithms, and storing and updating scores on a server that cannot identify client banks.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If entities exchange user scoring information to improve transaction security and fraud detection, then transaction security is improved, but client data privacy is compromised
Solution Approach 1:
The patent extracts only the necessary scoring information from client data, separating the evaluation metrics from the underlying personal information. Entities receive and process user scores without accessing the actual client data, thereby maintaining privacy while enabling security improvements.
Solution Approach 2:
The patent introduces an intermediary mechanism where user scoring information is transmitted between entities without revealing the source or underlying client data. This intermediary layer allows security enhancements through score exchange while preserving client data privacy through anonymization and controlled access.
2Reliability
If entities access recipient entity information to detect fraud, then fraud detection capability is improved, but system complexity increases
Solution Approach 1:
The patent segments the fraud detection system into modular components: scoring generation modules at each entity, transmission mechanisms for score exchange, and evaluation modules for fraud assessment. This segmentation allows enhanced fraud detection through multiple data points while managing system complexity through structured, distributed architecture.
3Loss of information
If multiple system actors are required to be compromised to access client data, then client data privacy is protected, but transaction processing complexity increases
Solution Approach 1:
The patent segments client data access across multiple independent system actors, where no single entity possesses complete access to identifiable client information. This segmentation protects privacy through distributed security while managing processing complexity through standardized score exchange protocols.
Solution Approach 2:
The patent employs intermediary mechanisms that facilitate secure score transmission between multiple actors without requiring complex coordinated access to underlying client data. The intermediary layer simplifies the interaction model while maintaining the security property that multiple actors must be compromised to access identifiable information.
Data Source
AI summary
A method and server for processing transactions between clients of a subscriber entity and a non-subscriber entity are provided. The method comprises: receiving, from a sender entity server, a request for a transaction between the sender entity and a client of a recipient entity; in response to the recipient entity being the non-subscriber entity; transmitting a first portion of the client's ID to a first anonymizing entity server for generating a first anonymized portion; transmitting a second portion of the client's ID to a second anonymizing entity server for generating a second anonymized portion; combining the first and second portions, thereby generating the client's anonymized ID; determining, based on the client's anonymized ID, a client's evaluation score of the client of the recipient entity; and in response to the client's evaluation score being greater than a predetermined threshold, allowing the request for the transaction between the sender and recipient entities.