Automated Credit Card Customer Classification System
Find Innovative SolutionsGenerate Solutions
Solution Overview
Problem
Credit card issuers face inefficiencies in manually classifying customers as consumers or business users, leading to time-consuming and error-prone processes that hinder targeted marketing and risk assessment.
Innovation Solution
A computer-based method calculates an adjusted index based on customer spending across merchants, comparing it to a cut-off value to classify customers, with optional re-classification using merchant information or transaction data, enabling automated sorting and categorization.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Measurement precision
If manual inspection of customer charge records is performed, then customer classification can be achieved, but the process becomes time-consuming and error-prone
Solution Approach 1:
The patent replaces the mechanical manual inspection process with an automated computer-based system that calculates an adjusted index from charge records and automatically classifies customers. This substitution eliminates human time investment and subjectivity while maintaining consistent classification criteria through algorithmic processing of spending patterns and merchant categories.
Solution Approach 2:
The classification system performs self-service by automatically processing customer charge records without requiring manual intervention. The system calculates the adjusted index, compares it against thresholds, and generates classifications independently, enabling high-volume processing of customer data without proportionally increasing human resources.
2Productivity
If manual classification is performed by multiple inspectors, then classification can be completed, but results vary depending on who performs the inspection
Solution Approach 1:
The patent transforms subjective manual judgment into objective parameter-based classification by calculating an adjusted index from quantifiable charge record data. The system uses consistent mathematical formulas and predetermined thresholds that remain unchanged across different processing instances, ensuring that the same customer data always produces the same classification result regardless of who or what processes it.
Solution Approach 2:
By replacing human inspectors with an automated computer-based classification system, the patent eliminates variability introduced by different individuals. The automated system applies uniform classification logic consistently across all customers, ensuring reliable and reproducible results while maintaining high processing throughput.
3Adaptability or versatility
If credit card issuers offer specialized cards for specific customer types, then customer needs can be better met, but the ability to identify customer types becomes critical
Solution Approach 1:
The patent replaces difficult manual assessment of customer types with automated analysis of charge record patterns. The system calculates an adjusted index based on objective data points including spending amounts, merchant categories, and transaction frequencies, making customer type identification straightforward and scalable without requiring subjective judgment or complex manual investigation.
Solution Approach 2:
The classification system performs preliminary identification of customer types using existing charge record data before targeted marketing or service customization is implemented. By pre-calculating the adjusted index and determining customer classifications in advance, the system enables credit card issuers to proactively offer appropriate specialized cards and incentives matched to identified customer needs.
Data Source
AI summary
According to embodiments of the present invention there is provided a computer-based method and a computer program product for automatically sorting customers who make purchases from merchants using a credit card. The computer-based method includes the following steps. An adjusted index is calculated for a customer based on an amount of money the customer spent across merchants during a time period. The adjusted index is compared to a cut-off value. The customer is classified based on the comparison of the adjusted index to the cut-off value. In an embodiment, the method also includes re-classifying the customer based on at least one of (i) information about the merchants, or (ii) a number of transactions in a predetermined industry.