Tiered Credit Request Routing System

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Solution Overview

Problem

Large financial institutions face a bottleneck in processing credit requests due to a small number of credit executives, leading to delayed decision-making and potential errors in evaluating high-risk transactions.

Innovation Solution

Implementing a tiered system where credit requests are categorized into three tiers: third-tier for low-risk, computer-processed requests; second-tier for requests with predefined criteria delegated to junior personnel; and first-tier for high-risk requests manually reviewed by executives, with the option to reallocate credit lines and adjust credit limits based on usage history.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Reliability

If a small number of credit executives manually review all credit requests, then the integrity and accuracy of credit decisions are maintained, but the processing speed and productivity decrease significantly

Engineering Contradiction:

Improveintegrity of credit decisionsVSAvoidprocessing speed of credit requests

Core Design Contradiction:

ReliabilityVSProductivity

Solution Approach 1:

The patent segments credit requests into three distinct tiers based on risk characteristics: first-tier (high risk) reviewed by credit executives, second-tier (moderate risk) reviewed by junior personnel, and third-tier (low risk) processed automatically by computers. This segmentation allows the system to maintain high integrity for complex requests while rapidly processing simple requests, resolving the contradiction between reliability and productivity.

Inventive Principle:

Principle #1Segmentation

Solution Approach 2:

Different levels of review quality are applied to different tiers of credit requests. High-risk first-tier requests receive comprehensive executive review, moderate-risk second-tier requests receive standard junior personnel review, and low-risk third-tier requests receive automated processing. This local differentiation of quality ensures appropriate scrutiny is applied where needed while maintaining efficiency elsewhere.

Inventive Principle:

Principle #3Local quality

2Productivity

If more junior personnel are empowered to approve credit requests, then the processing capacity and productivity increase, but the risk of erroneous approvals and reliability decrease

Engineering Contradiction:

Improvenumber of processed requestsVSAvoidaccuracy of credit decisions

Core Design Contradiction:

ProductivityVSReliability

Solution Approach 1:

Junior personnel are assigned to review only second-tier credit requests with moderate risk characteristics, while first-tier high-risk requests remain with executives and third-tier low-risk requests are automated. This segmentation ensures junior personnel operate within their competency zone, increasing productivity without compromising the integrity of high-risk decisions.

Inventive Principle:

Principle #1Segmentation

Solution Approach 2:

The system performs preliminary classification and risk assessment of credit requests before routing them to appropriate reviewers. By pre-categorizing requests into tiers based on their risk characteristics, the system ensures junior personnel only handle appropriate cases, maintaining reliability while enabling broader participation in the review process.

Inventive Principle:

Principle #10Preliminary action

3Productivity

If computer automation is used to process credit requests, then the processing speed and productivity increase significantly, but the ability to handle complex high-risk requests and reliability decrease

Engineering Contradiction:

Improveprocessing volume of credit requestsVSAvoidhandling of complex transactions

Core Design Contradiction:

ProductivityVSReliability

Solution Approach 1:

The patent assigns third-tier low-risk standardized requests to computer automation, while first-tier high-risk complex requests remain under executive review. This segmentation leverages the speed and efficiency of automation for simple cases while preserving human judgment for complex decisions, resolving the contradiction between productivity and reliability.

Inventive Principle:

Principle #1Segmentation

Solution Approach 2:

Computer systems replace human reviewers for processing third-tier low-risk credit requests, eliminating manual effort for standardized simple cases. This substitution maintains high productivity while the system retains human oversight for complex first-tier requests, balancing automation benefits with the need for human judgment.

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

Data Source

PatentUS7844518B1Method and apparatus for managing credit limits

Publication Date: 2010.11.30 JPMORGAN CHASE BANK NA

AI summary

A system and method for evaluating financial transactions, which may involve credit requests, is provided. Credit requests are categorized into three tiers: the third-tier is for requests capable of being processed by computers, the second-tier is for requests that meet predefined criteria and cannot be categorized as third-tier requests, and the first-tier is for requests that cannot be categorized as second-tier or third-tier requests. The first-tier requests are manually reviewed by a credit executive. The second-tier requests are delegated to more junior credit personnel via an inventive pre-approval procedure. The third-tier requests are processed, at least in part, by computers. Additionally, requests that exceed a credit line, or limit, may be approved by reallocating credit from other credit lines.