Irreversible Code Fraud Detection System
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Solution Overview
Problem
Conventional fraud detection methods fail to detect fraudulent transactions, especially when a malicious user uses a cash card from an overseas financial institution, as they cannot acquire necessary usage status information.
Innovation Solution
A fraud detection system that converts individual identification information into a unique irreversible code, storing transaction information associated with this code, and calculates a transaction estimation value based on historical data to detect divergence in transaction patterns, alerting when significant discrepancies are found.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If conventional fraud detection methods using transaction status are used, then the system can detect fraud in domestic transactions, but the system cannot detect fraud when a malicious user uses a cash card from an overseas financial institution
Solution Approach 1:
The patent introduces an intermediary mechanism that converts individual identification information into irreversible codes, serving as a universal identifier that works across different financial institutions and borders. This intermediary layer enables the fraud detection system to track and analyze transaction patterns regardless of the user's home institution, thereby resolving the inability to detect cross-border fraud while maintaining detection accuracy.
Solution Approach 2:
The system changes the parameter of identification from institution-specific card numbers to universal irreversible codes. This parameter transformation allows the system to aggregate transaction data across different financial institutions and borders, enabling the detection of fraudulent patterns that span multiple institutions while preserving the reliability of fraud detection through consistent pattern recognition.
2Measurement precision
If individual identification information is stored for fraud detection, then the system can calculate accurate transaction estimation values, but the system exposes individual information to potential security risks
Solution Approach 1:
The patent converts the potential harm of storing sensitive individual information into a benefit by transforming it into irreversible codes. These codes preserve the ability to analyze transaction patterns and calculate accurate estimation values while eliminating the security risk associated with storing actual personal identifiers. The irreversible nature of the codes ensures that even if compromised, the original individual information cannot be recovered.
Solution Approach 2:
The system extracts only the necessary identifying characteristics from individual identification information and stores them in irreversible code form. This extraction process removes the sensitive personal data while retaining the functional ability to track and analyze transaction patterns, thereby maintaining measurement precision while eliminating information security risks.
Data Source
AI summary
A fraud detection system that converts personal identification information into an irreversible code, acquires transaction information that includes transaction terminal identification information, stores the acquired transaction information in a transaction information storage unit, and calculates a respective transaction estimation value for a future transaction for each transaction terminal and each irreversible code, on the basis of the transaction information stored in the transaction information storage unit. When new transaction information is acquired the fraud detection system calculates a degree of deviation for the new transaction information on the basis of the transaction estimation value for the irreversible code and the transaction estimation value for the transaction terminal which are in accordance with the transaction terminal identification information included in the new transaction information, and outputs alert information when the degree of deviation is large.