Circuit Breaker System for Transaction Security and Efficiency
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Solution Overview
Problem
Large institutions face challenges in managing transactions during cyber events and liquidity risks, which can disrupt automated payment processing and lead to significant financial impacts, including the need for immediate intervention to prevent widespread disruptions and ensure transaction security.
Innovation Solution
A variable circuit breaker system with a dashboard display is implemented, allowing for the identification of impacted institutions, allocation of resources, quarantine of suspicious transactions, and centralized management of transaction processing, enabling the isolation and restriction of transactions, quantification of security, and provision of real-time insights and transparency.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If automated transaction processing is implemented for large institutions, then processing speed and efficiency are improved, but the system becomes vulnerable to cyber events and liquidity risks that can cause widespread disruptions
Solution Approach 1:
The patent divides the transaction processing system into multiple independent circuit breaker modules, each responsible for monitoring specific institutions or transaction types. This segmentation allows the system to isolate and respond to cyber events or liquidity risks affecting individual institutions without disrupting the entire network, thus maintaining both high processing efficiency and robust security.
Solution Approach 2:
The circuit breaker system acts as an intermediary layer between transaction submission and processing. It monitors transaction parameters, identifies potential risks through pattern recognition, and selectively blocks suspicious transactions before they reach the core processing system. This mediator approach enables automated processing to continue at full speed for legitimate transactions while providing real-time security intervention when needed.
2Reliability
If circuit breaker systems are implemented to block suspicious transactions, then transaction security is improved, but legitimate transactions may be incorrectly blocked causing processing delays
Solution Approach 1:
The circuit breaker system dynamically adjusts its blocking thresholds and parameters based on real-time transaction patterns, institution risk profiles, and event conditions. Rather than using fixed rules, the system continuously learns from transaction data and modifies its behavior to distinguish between legitimate and suspicious transactions, reducing false positives while maintaining security.
Solution Approach 2:
The system incorporates feedback loops where blocked transactions are reviewed and outcomes are fed back into the monitoring algorithms. This feedback mechanism allows the circuit breaker to learn from its decisions, refine its risk assessment criteria, and improve its accuracy over time in identifying truly suspicious transactions versus legitimate ones that merely deviate from normal patterns.
3Measurement precision
If comprehensive monitoring of all transactions is implemented to identify cyber events, then detection precision is improved, but system complexity and computational resources increase
Solution Approach 1:
The monitoring system applies different levels of scrutiny and monitoring intensity to different transactions based on their characteristics, origin institutions, and risk profiles. High-value or unusual transactions receive more intensive analysis, while routine transactions from trusted institutions use simplified validation. This localized quality approach maintains high detection precision for critical transactions without requiring maximum computational resources across the entire system.
Solution Approach 2:
The system implements monitoring at multiple levels of depth, applying comprehensive analysis only when necessary. For most transactions, lightweight parameter checking suffices, but when anomalies are detected or risk thresholds are approached, the system escalates to more intensive monitoring and analysis. This partial action approach achieves high detection precision for problematic transactions while avoiding the excessive complexity and resource consumption of universal deep monitoring.
Data Source
AI summary
A transaction processing system capable of processing transactions and implementing a flexible circuit breaker process during an event. A circuit breaker module initiates a circuit breaker event (CBE), an account identification module identifies one or more affected account IDs, and a rule generation module generates conditional rules for evaluating each transaction presented to a transaction processing module. If a transaction presented to the transaction processing module satisfies the conditional rule, the transaction is not processed. Transactions not processed are stored in memory and groups of impacted transactions are assigned to resource modules based on common characteristics. The resource module determines if impacted transactions should be allowed to process.