Systems and methods for scoring bank customers direct deposit account transaction activity to match financial behavior to specific acquisition, performance and risk events defined by the bank using a decision tree and stochastic process

• US 7,296,734 B2
• Filed: 06/02/2004
• Issued: 11/20/2007
• Est. Priority Date: 06/02/2004
• Status: Expired due to Fees

• Current Assignee: Robert Kenneth Pliha
• Original Assignee: Robert Kenneth Pliha
• Inventors: Pliha, Robert Kenneth
• Primary Examiner(s): Le; Thien Minh
• Application Number:
  US10/858,745
• Publication Number:
  US 20050273430A1
• Time in Patent Office: 1,266 Days
• Field of Search: 235/380, 235/379, 235/382, 235/382.5, 235/375, 705/39, 705/43, 705/35, 705/40, 705/38
• US Class Current: 235/379
• CPC Class Codes: G06Q 20/108 Remote banking, e.g. home banking
• CPC Class Codes: G06Q 20/1085 involving automatic teller machines [ATMs]
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03

Abstract

A financial scoring system for forecasting the financial behavior of a bank customer holding a direct-deposit-account, commonly referred to as a checking account, to forecast the probability of being a cross sell or up sell acquisition candidate, a default candidate on a loan repayment account, a default candidate on a credit card payments, a default candidate on an off-line debit card transaction, an account closing, attrition, candidate, or a potential fraud candidate, such as money laundering. The financial scoring system can assist the bank in determining profitable and non-profitable account activity and customer groups. The financial behavior scoring will help banks to attract retailers to participate and co-sponsor marketing initiative based on the financial score achieved for a specific group of bank customers.

Claims

1. A method of forecasting and scoring the financial behavior of direct-deposit-account (DDA) customer stored in a banks Customer-Information-File (CIF) achieves by measuring the variations in cash transaction activity and spending behavior to predict the financial patterns that match the acquisition, performance, and risk criteria and parameters defined by the bank, comprising:

the cash transaction occurring in a customer'"'"'s demand-deposit accounts (DDA);

the cash transaction occurring in a customer time-deposit accounts;

the cash transaction occurring in a customer'"'"'s loan accounts;

the cash transaction occurring in a customer on-line and off-line debit card accounts;

the cash transaction occurring in a customer'"'"'s credit card accounts.

2. The method of claim 1, of calculating the total amount of discretionary cash processed monthly through a customer demand-deposit account (DDA), comprising:

the beginning and end cash balance each month;

the total amount of the on-us checks processed each month;

the total amount of on-us to on-us checks processed each month;

the total amount of the transit checks processed each month;

the total amount of the Automated-Clearing-House (ACH) transactions processed each month;

the total amount of the wire transfers processed each month;

the total amount of automatic interest transfers processed each month;

the total amount of online debit card transactions processed each month;

the total amount of offline debit card transactions processed each month;

the total amount of automated-teller-machine (ATM) transactions processed each month;

the total amount of bank charges, including DDA Statement Processing, Non-sufficient funds (NSF), Overdraft (OD), Dormant Account, ATM, FDIC charges, incurred during each months processing.

3. The method of claim 1, of calculating the total amount of household expense cash processed monthly through a customer demand-deposit account (DDA).

4. The method of claim 1, of calculating the total amount cash processed monthly through a time-deposit account held by a DDA customer, comprising:

the total time-deposit account balance;

the total amount and date of monthly interest payment;

the maturity date of the time-deposit account.

5. The method of claim 1, of calculating the total amount cash processed through a loan account held by a DDA customer, comprising:

the total loan account balance;

the total monthly loan payment and date;

the total amount of the monthly loan fees paid;

the total amount of monthly loan disbursement and date;

the effective date of an interest rate increase;

the total amount of the interest rate increase;

the maturity date of the loan account;

the total amount of the reserve loan prepaid.

6. The method of claim 1, of calculating the total amount cash processed through the debit card held by a DDA customer, comprising:

the total dollar amount of the monthly debit card transactions;

the total number of monthly debit card transactions;

the average monthly debit card purchase amount;

the total amount of the monthly debit card transactions at a specific Point-of-Sale location;

the average monthly debit card purchase amount at a specific Point-of-Sale location.

7. The method of claim 1, of calculating the total amount cash processed through the credit card, single or multiple, held by a DDA customer, comprising:

the total dollar amount of the monthly credit card transactions;

the total number of monthly credit card transactions;

the average monthly credit card purchase amount;

the total amount of the monthly credit card transaction at a specific Point-of-Sale location;

the average monthly credit card purchase amount at a specific Point-of-Sale location.

8. The method in claim 1, of capturing the demographic parameters for a DDA customer, comprising:

the primary resident ZIP CODE of the DDA customer;

the age of the DDA customer;

the annual income of the DDA customer;

the occupation of the DDA customer;

the single or married status of the DDA customer;

the size of the family of the DDA customer;

the age of family members of the DDA customer;

the number of automobiles held by the DDA customer;

the retirement status of the DDA customer;

the house market value owned by the DDA customer.

9. A method of claim 1, of determining and assigning a weighted value to each cash transaction and demographic type stored in the invention database to predicts and scores a DDA customers financial behavior that matches the acquisition, performance, and risk criteria and parameters define by the bank, comprising;

the weighted variable assigned to the DDA transaction types;

the weighted variable assigned to the time-deposit-account transaction types;

the weighted variable assigned to the loan-account transaction types;

the weighted variable assigned to the debit card transaction types;

the weighted variable assigned to the credit card transaction types;

the weighted variable assigned to the demographic parameters.

10. A method of claim 9, of determining and assigning the weighted value based on the target criteria and parameters defined by the bank.

11. A method of claim 9, of determining and assigning the weighted value based on the target criteria and parameters defined by the retailer.

12. The method in claim 1, of using a statistical and decision tree model installed in a computer system configuration, singular or combinational, to weight, and measure the cash and demographic predictor variables extracted from a DDA customers CIF achieve to predict, match, and score the financial behavior based on the criteria and parameters defined by the bank or retailer, comprising;

the use of a Linear Regression model;

the use of a Logistic Regression model;

the use of an Automatic Interaction Detection (AID) model;

the use of a Chi-Square Automatic Interaction Detection (CHAID) model;

the use of a Classification and Regression Tree (CART) model;

the use of a Rule Induction model;

the use of a Neural Network model.

13. The method in claim 12, of using a stochastic process defined by the mathematical formula, Predicted Target=F0+B1*T1(X)+B2*T2(X)+ . . . +BM*TM(X), to enhance the predictive financial behavior results of the statistical and decision tree model to predict, match, and score the DDA customers financial behavior based on the criteria and parameters defined by the bank or retailer.

14. The method in claim 13, of using an enhance stochastic formula that is derived from the generation of a DDA customer'"'"'s financial behavior that matches the criteria and parameters defined by the bank or retailer.

15. The method in claim 12, of printing reports from a computer station that displays the predictive segment financial behavior results, response probability, and return-on-investment forecasting that match the bank or retail predictive criteria.