Fund Allocation Modeling for Insurance Coverage and Capacity
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Solution Overview
Problem
Current deposit systems face challenges in accurately predicting and managing fund movements and available capacity across multiple depository institutions, particularly in ensuring government-backed insurance coverage and optimizing capacity utilization within stratified account balances.
Innovation Solution
A method and system that access electronic databases to aggregate account information, calculate stratified balances, and allocate funds across depository institutions to maximize insurance coverage and capacity utilization, using algorithms to adjust parameters such as client accounts, institutions, and insurance limits based on current and projected balances.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If funds are allocated across multiple depository institutions to maximize insurance coverage, then government-backed insurance coverage is improved, but system complexity increases
Solution Approach 1:
The patent segments client accounts into different strata based on balance amounts and allocates funds from each stratum to different depository institutions. This segmentation allows the system to maximize insurance coverage by distributing funds across multiple institutions while maintaining manageable complexity through structured allocation rules for each stratum.
Solution Approach 2:
The system changes parameters such as insurance limits, capacity caps, and stratum definitions to optimize the allocation of funds across depository institutions. By adjusting these parameters, the system can adapt to different scenarios and maximize insurance coverage without requiring complete redesign of the allocation framework.
2Reliability
If capacity caps are reduced to ensure full insurance coverage, then insurance coverage reliability is improved, but capacity utilization deteriorates
Solution Approach 1:
By dividing client accounts into strata with different capacity caps, the system can apply more restrictive caps to higher-balance accounts (ensuring full insurance coverage) while allowing more flexible utilization for lower-balance accounts. This segmentation resolves the contradiction by enabling differentiated capacity management across account types.
Solution Approach 2:
The system applies different capacity cap rules to different strata of accounts based on their specific characteristics. Higher strata with larger balances receive more conservative allocation to ensure full insurance coverage, while lower strata can utilize capacity more aggressively, optimizing overall system productivity while maintaining reliability for critical accounts.
3Adaptability or versatility
If the number of depository institutions is increased to accommodate more client accounts, then adaptability is improved, but excess capacity increases
Solution Approach 1:
The system performs preliminary calculations and modeling to predict future fund movements and capacity requirements before allocating funds. This allows the system to add depository institutions proactively based on forecasted needs rather than reactively, reducing excess capacity while maintaining adaptability to handle growth.
Solution Approach 2:
The system continuously monitors actual fund movements and capacity utilization across depository institutions, using this feedback to adjust allocations and identify underutilized institutions. This feedback mechanism allows the system to maintain adaptability while minimizing excess capacity by consolidating funds in high-utilization institutions when appropriate.
Data Source
AI summary
A method, system and program product, the method comprising accessing, databases, comprising: aggregated account information for FDIC accounts; client account information for each of the respective client accounts, wherein the client account represents funds of the respective client held in the one or more aggregated deposit accounts holding funds of the respective client, the client account information; capacity caps; and obtaining, high, second and lowest stratification balances held in respective depository institutions; calculating for depository institutions a respective total balance in the program; calculating respective excess capacities for respective depository institutions; modifying, parameters selected from the group of a number of client accounts, additional client account funds, a total number of the depository institutions participating in the program, and the capacity caps for one or more of the depository institutions.