Canonical Transaction Representation for Financial Graph Analysis

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Solution Overview

Problem

Current computer-implemented financial analysis systems face challenges in efficiently representing, storing, and analyzing financial transaction data due to varying transaction representations across different financial institutions, leading to burdensome code refactoring and error-prone reconciliation processes when new transaction types are added or modified.

Innovation Solution

A method is introduced that transforms asset transaction data into transaction objects with transaction effect objects, using a canonical transaction representation format to unify transaction types and represent financial transactions as a financial graph, enabling efficient analysis and performance calculations.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Adaptability or versatility

If transaction data is stored in institution-specific table formats with varying transaction type identifiers, then data can be obtained from multiple financial institutions, but code refactoring becomes burdensome and reconciliation becomes error-prone when new transaction types are added

Engineering Contradiction:

Improveability to handle diverse transaction types from different institutionsVSAvoidcode refactoring burden and reconciliation complexity

Core Design Contradiction:

Adaptability or versatilityVSDevice complexity

Solution Approach 1:

The patent introduces a canonical transaction representation format as an intermediary layer between institution-specific data formats and the analysis system. This canonical format serves as a mediator that translates varying transaction type identifiers from different institutions into a unified representation, eliminating the need for repeated code refactoring and simplifying reconciliation processes when new transaction types are added.

Inventive Principle:

Principle #24Intermediary (Mediator)

Solution Approach 2:

The patent transforms transaction data by changing the parameter representation from institution-specific transaction type identifiers to a canonical transaction representation format. This parameter transformation allows the system to handle diverse transaction types uniformly, reducing complexity in code maintenance and reconciliation operations.

Inventive Principle:

Principle #35Parameter changes

2Loss of information

If multiple rows with different transaction type identifiers are used to represent a single conceptual transaction, then transaction details can be captured, but data analysis becomes cumbersome and error-prone

Engineering Contradiction:

Improvetransaction detail completenessVSAvoiddata analysis efficiency

Core Design Contradiction:

Loss of informationVSProductivity

Solution Approach 1:

The patent merges multiple rows representing the same conceptual transaction into a single unified transaction record in the canonical format. By combining related transaction details (such as foreign exchange out and foreign exchange in) into one structured representation, the system preserves complete transaction information while significantly improving analysis efficiency and reducing errors.

Inventive Principle:

Principle #5Merging (Combining)

3Reliability

If institution-specific transaction representations are maintained, then data fidelity to source systems is preserved, but system-wide data consistency deteriorates

Engineering Contradiction:

Improvedata fidelity to source systemsVSAvoiddata consistency across institutions

Core Design Contradiction:

ReliabilityVSStability of the object's composition

Solution Approach 1:

The canonical transaction representation format acts as an intermediary that preserves the fidelity of source system data while establishing consistency across different institutions. The translation process maintains the essential characteristics and details of original transactions while standardizing their representation, thereby achieving both data fidelity and system-wide consistency.

Inventive Principle:

Principle #24Intermediary (Mediator)

Data Source

PatentUS11776058B2Transaction effects

Publication Date: 2023.10.03 ADDEPAR INC

AI summary

A method comprising creating and storing, in computer memory, a financial graph having nodes and edges, wherein the nodes include first nodes representing assets and second nodes representing any one or more of accounts in which one or more of the assets are held, individuals who own one or more of the assets, or legal entities who own one or more of the assets; obtaining, from an asset custodian data source, asset transaction data associated with one or more of the assets represented by the first nodes of the financial graph; transforming the asset transaction data into one or more stored transaction objects, wherein each transaction object is associated with a plurality of transaction effect objects; wherein each of the plurality of transaction effect objects is associated with a particular edge in the financial graph and represents one of a credit to an account type associated with the particular edge and a debit from an account type associated with the particular edge.