Consumer Spend Capacity Estimation via Credit Bureau Intermediary
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Solution Overview
Problem
Current methods fail to accurately estimate consumer spend capacity and identify industries where consumers are likely to spend, due to limited access to comprehensive financial data and incomplete information from credit bureaus, leading to inaccurate targeting of spending opportunities.
Innovation Solution
A method to calculate the 'size of wallet' for consumers across multiple financial institutions, correlating industry spend with lifestyle characteristics to model consumer behavior and target specific offers to increase industry share of wallet, using a combination of internal and external data sources.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Measurement precision
If a financial institution monitors only its own customers' account balances to estimate spend capacity, then the data access is simple and direct, but the estimation accuracy is insufficient due to inability to detect balance transfers and lack of comprehensive financial picture
Solution Approach 1:
The patent employs credit bureaus as intermediaries to access comprehensive consumer financial data across multiple institutions. The credit bureau receives data from various financial institutions, standardizes it, and provides aggregated credit reports to the target financial institution, enabling accurate spend capacity estimation without direct complex multi-institution data collection
Solution Approach 2:
The patent combines internal account balance data with external credit bureau data to create a comprehensive view of consumer spend capacity. By merging these data sources and analyzing the differential, the system achieves accurate estimation of available spend capacity while accounting for balance transfers and other factors invisible to single-institution monitoring
2Measurement precision
If comprehensive financial data from multiple institutions is collected to achieve complete picture of consumer purchasing ability, then the estimation accuracy improves, but access is restricted by consumer privacy laws and security concerns
Solution Approach 1:
Credit bureaus serve as regulated intermediaries that comply with privacy laws and security requirements. They aggregate data from multiple financial institutions under standardized protocols and provide information to consumers and authorized parties, enabling comprehensive spend capacity analysis while maintaining compliance with privacy regulations and security standards
Solution Approach 2:
The patent extracts only the necessary aggregated credit information from comprehensive financial data through credit bureau reports. Rather than accessing or storing detailed account information from multiple institutions, the system extracts key metrics such as total credit limits, utilization rates, and payment history, achieving accurate estimation while minimizing privacy and security exposure
3Ease of manufacture
If simple monitoring of own institution's account balances is used, then the implementation is straightforward, but the ability to identify true spending opportunities is limited due to balance transfer invisibility
Solution Approach 1:
The patent merges internal account monitoring with external credit bureau data retrieval through automated workflows. The system combines simple balance monitoring with periodic credit report analysis, automatically calculating the differential to identify true spend capacity and spending opportunities while maintaining implementation simplicity through standardized integration processes
Data Source
AI summary
Consumer spend by industry is modeled based on the industry sizes of wallet of consumers having a high share of wallet with a financial institution. A size of wallet is calculated for each consumer in a plurality of consumers. A share of wallet for each consumer is also calculated. A subset of the plurality of consumers whose share of wallet is above a given percentage of their size of wallet is then determined. For each consumer in the subset, an industry size of wallet is determined. A correlation between the industry size of wallet of a given consumer and one or more characteristics of the given consumer is then derived using the industry size of wallet for the consumers in the subset.