Automated Fraud Risk Assessment and Challenge Delivery

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Solution Overview

Problem

Existing fraud assessment processes for new transaction accounts are time-consuming and inconvenient, often requiring manual verification, which can lead to dropped applications and excessive demands on technical resources, and pose challenges in confirming ownership of phone numbers or email addresses.

Innovation Solution

An automated system calculates fraud risk levels based on identity-based data, determines authentication challenge delivery channels and types, transmits authentication challenges, verifies responses, and generates outcomes, thereby streamlining the fraud review process and reducing manual intervention.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Reliability

If manual verification is used to assess fraud risk, then authentication accuracy is improved, but processing time and operational workload increase

Engineering Contradiction:

Improveauthentication accuracyVSAvoidprocessing time

Core Design Contradiction:

ReliabilityVSLoss of time

Solution Approach 1:

The verification process is segmented into automated identity-based data comparison (performed by system) and manual verification (performed by agents). The automated segment handles routine checks against stored data, while manual segment handles complex cases, reducing overall processing time while maintaining accuracy.

Inventive Principle:

Principle #1Segmentation

Solution Approach 2:

An automated verification system acts as an intermediary between the applicant and human agents. It pre-processes applications by comparing identity data against stored records, filtering out clearly valid cases before they reach manual reviewers, thus reducing processing time without compromising authentication accuracy.

Inventive Principle:

Principle #24Intermediary (Mediator)

2Reliability

If manual verification processes are implemented, then fraud detection capability is improved, but operational workload and resource demands increase

Engineering Contradiction:

Improvefraud detection capabilityVSAvoidoperational workload

Core Design Contradiction:

ReliabilityVSProductivity

Solution Approach 1:

The system enables self-service verification by automatically comparing applicant identity data against stored internal data. The system serves itself by performing initial fraud assessment without human intervention, reducing operational workload while maintaining fraud detection capability through automated data matching.

Inventive Principle:

Principle #25Self-service

Solution Approach 2:

Manual mechanical verification processes are replaced with automated electronic data comparison systems. The automated system electronically matches identity-based data against stored records, substituting human agents for machine-based verification, thereby reducing operational workload while preserving fraud detection capability.

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

3Reliability

If traditional authentication methods are used, then verification thoroughness is improved, but applicant convenience and completion rates worsen

Engineering Contradiction:

Improveverification thoroughnessVSAvoidapplicant convenience

Core Design Contradiction:

ReliabilityVSEase of operation

Solution Approach 1:

Traditional mechanical phone-based verification is replaced with automated electronic authentication challenges delivered via multiple channels (SMS, email, instant messaging). The system electronically delivers challenges and automatically processes responses, maintaining verification thoroughness while significantly improving applicant convenience through automated, multi-channel delivery.

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

Solution Approach 2:

The authentication system is designed with multi-functionality, supporting multiple delivery channels (SMS, email, instant messaging, phone) and various challenge types (one-time passwords, predefined passwords, driver's license numbers, IMEI, transaction card numbers). This universal approach maintains verification thoroughness while accommodating applicant preferences and improving convenience.

Inventive Principle:

Principle #6Universality (Multi-functionality)

4Productivity

If high volume contemporaneous verifications are processed, then system capacity is improved, but technical resource demands and system stability worsen

Engineering Contradiction:

Improveverification volume capacityVSAvoidsystem stability

Core Design Contradiction:

ProductivityVSStability of the object's composition

Solution Approach 1:

Legacy dialer systems are replaced with automated electronic verification systems that can handle high volumes of contemporaneous verifications through software-based processing. The automated system processes verification requests electronically without the mechanical constraints of traditional dialers, increasing system capacity while maintaining stability through automated resource management.

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

Data Source

PatentUS20220284082A1Authentication challenges based on fraud initiation requests

Publication Date: 2022.09.08 AMERICAN EXPRESS TRAVEL RELATED SERVICES CO INC

AI summary

Systems for issuing authentication challenges based on fraud initiation requests are provided. The system may calculate a fraud risk level based on a fraud initiating request comprising identity-based data. In response to the fraud risk level indicating a risk of fraud, the system may determine an authentication challenge type. The system may cause a display on the client device of an authentication challenge and verify an authentication challenge response received from a client device.