Antifraud Scoring System Using Multi-Source Location Verification
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Solution Overview
Problem
Legacy banking and payments processing firms face challenges in fraud detection and user onboarding due to reliance on manual processes, vulnerability to fraudulent account creation with fake information, and difficulties in verifying user location accurately.
Innovation Solution
A system and method that utilize internet-enabled wireless mobile devices and a payments server to extract and analyze user and device data, including location information, to enhance fraud detection and user verification, while continuously monitoring for risk factors.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If manual review process is used for KYC/KYB verification, then fraud detection reliability is improved, but user onboarding speed and productivity deteriorate
Solution Approach 1:
The verification process is segmented into multiple independent checks: device fingerprinting, location verification through multiple sources (GPS, cell tower, IP), document authentication, and behavioral analysis. Each segment operates independently to contribute to the overall fraud risk score, enabling automated decision-making without manual review while maintaining high reliability.
Solution Approach 2:
The system introduces an intermediary antifraud scoring system that acts as a mediator between user submission and final approval. This intermediary automatically evaluates multiple data sources (device metadata, location information, document verification results) and produces a risk score, eliminating the need for manual review while preserving detection accuracy.
2Device complexity
If traditional location verification methods (IP address) are used, then system complexity is reduced, but measurement precision of user location deteriorates
Solution Approach 1:
The system merges multiple location verification methods (GPS coordinates, cell tower triangulation, IP address geolocation) into a unified location assessment. By combining these independent sources, the system achieves high measurement precision without significantly increasing complexity, as each method complements the others to provide redundant verification.
Solution Approach 2:
The location verification system is designed to universally accept multiple data sources (GPS, cell tower, IP) that can function independently or in combination. This multi-functional approach allows the system to adapt to different scenarios and maintain precision without requiring complex specialized mechanisms for each location source.
3Reliability
If GPS location access is forced for all users, then location verification reliability is improved, but ease of operation and user experience deteriorate
Solution Approach 1:
The system dynamically adjusts location verification requirements based on risk assessment. Instead of forcing GPS access on all users, the system selectively requests location data only when other verification methods indicate potential fraud risk, making the process adaptive and user-friendly while maintaining reliability for high-risk cases.
Solution Approach 2:
Different location verification methods are applied locally based on specific risk indicators. For example, GPS is requested only when behavioral patterns or device metadata raise concerns, while low-risk users undergo simpler verification. This localized application of verification strictness maintains reliability where needed while preserving ease of operation for legitimate users.
4Measurement precision
If multiple data sources are collected and analyzed, then fraud detection precision is improved, but device complexity and processing requirements worsen
Solution Approach 1:
The system performs preliminary collection and basic analysis of device metadata, location information, and document data during the onboarding process itself. By preparing and pre-processing this data before the actual fraud assessment, the system reduces the complexity of real-time analysis and enables faster, more precise fraud detection without overwhelming processing requirements during critical decision moments.
Data Source
AI summary
There is disclosed an antifraud system including a plurality of internet enabled wireless mobile devices and at least one payments server device, each respective internet enabled wireless mobile device including at least one respective transceiver being a respective cellular phone network transceiver, a respective non-transitory storage medium, and a respective computer program product embodied on the respective non-transitory storage medium, the respective computer program product executable on the respective internet enabled wireless mobile device to communicate with the payments server device and the payments server device including at least one internet enabled interface, a server non-transitory storage medium, and a server computer program product embodied on the server non-transitory storage medium, the server computer program product executable on the payments server device to communicate with the internet enabled wireless mobile devices. Related computer-implemented methods and computer program products are disclosed.