Encrypted Identity Code Matching for Financial Crime Detection
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Solution Overview
Problem
Financial institutions face challenges in identifying common suspicious customers across different institutions without violating privacy protection laws, as they are restricted from sharing identification information due to laws like the Gramm-Leach-Bliley Act, which hinders early detection of financial crimes.
Innovation Solution
A computerized method and apparatus that uses encoded or encrypted 'identity codes' derived from partial identification information, allowing multiple parties to match and identify common customers without disclosing original identification details, ensuring privacy protection and compliance with regulations.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If financial institutions share identification information to identify common customers, then the ability to detect financial crimes is improved, but privacy protection is violated
Solution Approach 1:
The patent introduces an intermediary system (third-party service) that enables financial institutions to compare customer identification information without the institutions themselves directly sharing or storing the actual identification data. The intermediary performs the matching operation and returns only the result (whether a match was found), thereby enabling crime detection while preserving privacy through data minimization and centralized control.
Solution Approach 2:
The patent segments the identification information into two parts: the actual identification data (kept private by each institution) and the encoded/encrypted representation (shared through the intermediary). This segmentation allows the system to perform matching operations on segmented data representations rather than on the full identification information, enabling detection capability while maintaining privacy protection.
2Productivity
If financial institutions post customer identification information on a shared network, then the ability to identify common customers is improved, but the risk of identity theft increases
Solution Approach 1:
The intermediary system acts as a secure mediator that processes identification information temporarily for matching purposes and then discards it, never storing or exposing the actual customer identification data to the financial institutions or the network. This enables efficient customer identification through the shared network while eliminating the identity theft risk associated with posting raw identification information publicly.
Solution Approach 2:
Instead of posting the original identification information on the shared network, the system creates and posts only a derived copy (encoded or encrypted representation) of the identification data. This copy is sufficient for matching purposes but contains no usable information for identity theft, thus enabling productivity while eliminating the harmful effect.
3Object-affected harmful factors
If financial institutions do not share identification information, then privacy protection is maintained, but the ability to jointly investigate crimes is reduced
Solution Approach 1:
The intermediary system provides a mechanism that enables financial institutions to perform joint investigations by comparing customer identification information without directly sharing the actual data. Each institution maintains its own private identification databases while the intermediary facilitates the comparison process, thereby maintaining privacy protection while enabling the reliability of joint crime investigation capability.
Solution Approach 2:
The patent replaces the traditional mechanical approach of directly sharing and storing identification information between institutions with an information-theoretic approach using encoding and encryption. This substitution allows the system to achieve the functional equivalent of data sharing (enabling investigation) while maintaining the functional equivalent of data privacy (protecting information), thus resolving the contradiction between these two requirements.
Data Source
AI summary
A computerized method and apparatus are established to identify a subject of common interest among multiple parties without releasing the true identity of any subject. Furthermore, a computerized network provides different parties at different locations with a mechanism to conduct cooperative activities concerning such a subject of common interest without exposing that subject to possible identity theft.