Trusted Sender Database Bypasses Duplicate Fraud Detection
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Solution Overview
Problem
Current fraud detection mechanisms in real-time payment transactions require duplicate efforts from both sender and recipient financial institutions, slowing down the process and increasing complexity, especially when transactions involve trusted senders.
Innovation Solution
A system that simplifies fraud detection by determining a sender's status through a preapproved sender database, using fuzzy logic to match sender information with preauthorized records, allowing the recipient financial institution to bypass transaction fraud detection mechanisms for trusted senders and facilitating real-time payment processing.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If both sender and recipient financial institutions perform fraud detection, then fraud detection coverage is improved, but processing time increases and real-time payment speed decreases
Solution Approach 1:
The system performs fraud detection preliminarily at the sender's financial institution before the transaction reaches the recipient's institution. By completing the sender-side fraud check in advance and marking trusted senders, the recipient's institution can skip duplicate fraud detection for these pre-verified accounts, thereby maintaining fraud detection coverage while significantly improving payment processing speed.
Solution Approach 2:
The system introduces a shared fraud detection database as an intermediary between sender and recipient financial institutions. This database stores fraud status information of senders, allowing both institutions to access and verify trusted sender status without performing duplicate real-time fraud detection algorithms, thus resolving the contradiction between comprehensive fraud detection and processing speed.
2Reliability
If recipient financial institutions perform duplicate fraud detection for all senders, then fraud detection thoroughness is improved, but system complexity increases
Solution Approach 1:
The system applies different fraud detection requirements to different senders based on their trust status. For trusted senders (those with positive fraud detection history stored in the database), the recipient's institution skips duplicate detection. For unverified senders, full fraud detection is performed. This localized quality approach maintains thoroughness where needed while reducing complexity for trusted accounts.
Solution Approach 2:
The system enables the sender's financial institution to perform self-verification of sender trustworthiness through the shared database before transactions occur. By allowing senders to be pre-verified and stored in the database, the recipient's institution can rely on this self-service verification and avoid duplicate complex detection processes for trusted senders.
3Reliability
If sender accounts are verified multiple times by different institutions, then fraud detection reliability is improved, but processing time increases
Solution Approach 1:
The system performs sender verification preliminarily at the sender's financial institution and stores the results in a shared database. This preliminary action ensures that when the recipient's institution receives the transaction, the sender's trustworthiness is already established, eliminating the need for time-consuming duplicate verification while maintaining high reliability through the shared verification record.
Data Source
AI summary
A system comprising one or more processors and one or more non-transitory computer-readable media storing computing instructions configured to run on the one or more processors and perform various acts. The acts can include: (a) receiving, through an electronic network, a payment authorization from a sender financial institution and on behalf of the sender; (b) obtaining a sender status of the sender based on sender information of the sender associated with the payment authorization; (c) when the sender status is preauthorized: instructing, through the electronic network, a recipient financial institution to bypass a transaction fraud detection mechanism associated with the sender and instructing, through the electronic network, the recipient financial institution to post a payment amount to a recipient account at the recipient financial institution. Other embodiments are described.