Identity-Based Transaction Risk Assessment Using Digital Identity Assertions
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Solution Overview
Problem
Existing methods for assessing transaction risk in identity-based transactions are inadequate, as they rely solely on account information, failing to utilize the more comprehensive data available from digital identities, which can lead to inaccurate risk assessments and increased transaction friction.
Innovation Solution
A system and method that receive an authorization request message for an identity-based transaction, determine an assertions model based on the resource provider and digital identity, calculate a risk score, and process the transaction accordingly, incorporating multiple accounts associated with the user to provide a more accurate risk assessment.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If authentication is required for each transaction, then transaction security is improved, but user convenience deteriorates
Solution Approach 1:
The system performs preliminary authentication and risk assessment actions before transactions occur. By evaluating user credentials, transaction history, and risk factors in advance, the system establishes a risk score that can be used for subsequent transactions without requiring repeated full authentication, thus improving convenience while maintaining security.
Solution Approach 2:
The system continuously monitors transaction outcomes and user behavior, using this feedback to adjust risk scores and authentication requirements. This dynamic feedback mechanism allows the system to adapt to user patterns over time, reducing the need for frequent authentication while maintaining security through ongoing risk assessment.
2Device complexity
If risk assessment uses only account information, then system complexity is reduced, but risk assessment accuracy deteriorates
Solution Approach 1:
The system merges multiple data sources including account information, user credentials from digital identities, transaction history, and external risk factors into a comprehensive risk assessment model. By combining these diverse data types, the system achieves more accurate risk assessment without creating an impenetrably complex system, as the various data sources work together synergistically.
Solution Approach 2:
The risk assessment system is designed to handle multiple types of data and transactions universally. The same risk scoring mechanism processes different transaction types, user profiles, and data sources through a unified framework, improving accuracy without requiring separate specialized systems for each data type.
3Measurement precision
If comprehensive digital identity data is used for risk assessment, then risk assessment accuracy is improved, but data processing complexity increases
Solution Approach 1:
The system segments the comprehensive digital identity data into distinct categories such as personal information, credentials, transaction history, and risk factors. Each segment is processed and evaluated separately using appropriate methods, then combined to produce the final risk score. This segmentation reduces processing complexity by breaking down the complex data into manageable portions.
Solution Approach 2:
The system transforms diverse data types into standardized risk parameters and scores. By converting various data formats and types into a unified risk scoring system, the complexity of processing comprehensive data is reduced while maintaining accuracy. The parameter transformation process standardizes the data representation, making it easier to process and compare.
Data Source
AI summary
Methods and systems disclosed herein related to analyzing the risk of an identity-based transaction and offering the identity-based transaction to a risk exchange. An identity-based transaction may be a transaction that is initiated with a digital identity, and an assertions model manager may provide assertions about the digital identity for completing the identity-based transaction. The assertions model manager may use the assertions and information about the identity-based transaction to analyze transaction risk. A risk score for the identity-based transaction can be calculated, and then the identity-based transaction may be offered on a risk exchange.