Real-Time Fraud Alert Push System for Account Issuers
Find Innovative SolutionsGenerate Solutions
Solution Overview
Problem
Current account and risk management tools for financial institutions do not allow for real-time sharing of unsolicited data indicating account risk, leading to delayed and costly processes for fraud detection and risk management, particularly due to the need for issuers to verify permissible purpose under the Fair Credit Reporting Act (FCRA) before receiving additional information.
Innovation Solution
An advanced identification system with an application screening and fraud detection module, consumer database, and matching and alert module that monitors consumer data element level triggering events and pushes real-time alerts to issuers with presumed permissible purpose, reducing the number of transactions required to deliver information and streamlining the alert process.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If issuers verify permissible purpose under FCRA before receiving risk data, then compliance with legal regulations is ensured, but the time and number of transactions required to deliver risk information increases
Solution Approach 1:
The system performs preliminary actions by establishing permissible purpose verification at account opening time rather than at the time of each risk data request. When a consumer applies for an account, the issuer submits consumer information to the consortium, and the consortium stores this information for future alert deliveries. This preliminary verification eliminates the need for repeated FCRA compliance checks when delivering subsequent risk alerts, thereby reducing transaction time while maintaining legal compliance.
2Reliability
If traditional retroactive alert systems are used, then issuers receive fraud detection information, but the process requires multiple transactions and delayed response times
Solution Approach 1:
The system performs preliminary actions by pre-establishing consumer information in the consortium database during account opening. When risk events occur, alerts are immediately pushed to pre-identified issuers without requiring them to re-submit requests or undergo verification. This transforms the traditional reactive multi-step process into an efficient push-model system that delivers fraud detection information rapidly.
Solution Approach 2:
The system implements feedback mechanisms where the consortium continuously monitors consumer accounts and automatically pushes alerts back to issuers when risk events are detected. This feedback loop ensures issuers receive timely fraud detection information without initiating additional transactions, thereby improving alert delivery efficiency while maintaining reliable fraud detection capabilities.
3Reliability
If consumer information is shared across multiple issuers in real-time, then fraud detection accuracy improves, but data sharing complexity and regulatory compliance burden increase
Solution Approach 1:
The consortium acts as an intermediary between multiple issuers and consumers, centralizing the storage and management of consumer information. Instead of issuers directly sharing data with each other (which would create complex peer-to-peer relationships), the consortium receives consumer information from issuers during account opening and serves as the single point of contact for delivering risk alerts. This intermediary structure simplifies the data sharing architecture while enabling real-time fraud detection across multiple issuers.
Data Source
AI summary
The present invention is directed to a system, method and server to assist account issuers in managing risk, fraud and unauthorized use. A system, method and server for use in pushing advanced warning alerts to issuers based on consumer data element level triggering events and fraud and unauthorized use reports is disclosed. The ability to the push the alerts to issuers with a permissible purpose for receiving the information in the alerts provides a real-time, online and cost effective way of providing issuers with valuable risk management tools.