Dynamic Smart Contracts for Real-Time External Account Verification
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Solution Overview
Problem
Current external account verification protocols in financial institutions are not capable of making real-time decisions due to the requirement for consumers to submit verification documentation or perform additional transactions, such as depositing currency or providing checks, which delays the legitimacy assessment of recipient accounts.
Innovation Solution
A method using dynamic smart contracts within a blockchain network to generate a smart contract profile for entities, determine a trust score based on this profile, and compare it to a confidence threshold value for real-time verification of external accounts, allowing for immediate decision-making on transaction approvals.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If consumers submit verification documentation or perform additional transactions to verify recipient accounts, then the reliability of account verification is improved, but the time required for verification increases
Solution Approach 1:
The system performs preliminary actions by requiring consumers to deposit currency or provide voided checks in advance, creating a verification record before transactions occur. This preliminary verification establishes account legitimacy upfront, allowing for faster subsequent transactions while maintaining reliability.
Solution Approach 2:
The system creates a copy or representation of the verification status through the blockchain ledger. Once verification is completed through documentation or transactions, the result is recorded as an immutable entry that can be referenced repeatedly without requiring re-verification, thus reducing time for future transactions while maintaining reliability.
2Measurement precision
If the financial institution analyzes additional transactions or submitted documentation to determine account legitimacy, then the accuracy of verification decisions is improved, but the processing time increases
Solution Approach 1:
The system enables self-service verification where the blockchain network automatically validates transactions and documentation according to predefined smart contract rules. The institution doesn't need to manually analyze each piece of documentation, as the system autonomously verifies account legitimacy through programmed criteria, maintaining accuracy while reducing processing time.
Solution Approach 2:
The system implements feedback mechanisms where the blockchain ledger provides real-time information about account verification status and transaction history. This feedback loop allows the system to make accurate verification decisions by continuously monitoring and analyzing account behavior patterns, maintaining precision while enabling faster decision-making.
3Reliability
If the financial institution requires deposit or voided check for each transaction to verify recipient accounts, then the security of transactions is improved, but the complexity of the verification process increases
Solution Approach 1:
The system applies a universal verification mechanism that works across multiple transaction types and scenarios. The blockchain-based verification process serves multiple functions: validating account existence, confirming account ownership, and establishing transaction legitimacy. This multi-functional approach maintains security across different transaction contexts while reducing the need for separate verification procedures for each transaction type.
Data Source
AI summary
Aspects of the disclosure relate to verifying external accounts in real-time using dynamic smart contracts. A computing platform may receive a consumer request to initiate a transaction, at an enterprise organization, with an entity associated with an account. The computing platform may use the received consumer request to generate a smart contract profile associated with the entity. The computing platform may use the smart contract profile associated with the entity to determine a trust score associated with the entity. The computing platform may gather data indicating external accounts associated with the entity. The computing platform may use the data indicating the external accounts associated with the entity to determine a confidence threshold value. The computing platform may compare the trust score associated with the entity to the confidence threshold value to verify the legitimacy of the account associated with the entity.