SYSTEMS AND METHODS FOR EVALUATING FINANCIAL TRANSACTION RISK

• US 20080301040A1
• Filed: 06/01/2007
• Published: 12/04/2008
• Est. Priority Date: 06/01/2007
• Status: Active Grant

• Current Assignee: Western Union
• Original Assignee: Western Union
• Inventors: Knudson, Sean, Cambron, Robert Allen, Nafe, Lisa Aiello, Baugh, Hollis Alford II, Newby, Blaine LaVelle, Favreau, Kevin, Bulkley, Robert Allen
• Granted Patent: US 7,620,596 B2
• Time in Patent Office: Days
• US Class Current: 705/39
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

Methods and systems are provided for evaluating the risk of conducting financial transaction such as money transfers through representatives. In one embodiment, information generated by a money transfer system regarding a plurality of financial transactions conducted by one or more representatives are received, records of the information are stored in a transaction database, a risk processor is configured to access the transaction database and retrieve risk element data related to transactions conducted by the representative and an analysis of the risk element data is performed using the risk processor. The risk processor may be configured to process the risk element data into one or more risk element values and to calculate a Transaction Risk Index for the representative by comparing one or more of the risk element values to an appropriate risk proxy.

Claims

1. A method for evaluating the risk of conducting financial transactions through representatives, the method comprising:

receiving information generated by a money transfer system regarding a plurality of financial transactions conducted by one or more representatives, wherein the information includes risk element data;

electronically storing records of the information in a transaction database;

configuring a risk processor to access the transaction database and retrieve risk element data related to transactions conducted by a first representative; and

performing an analysis of the risk element data using the risk processor, wherein the risk processor is configured to process the risk element data into one or more risk element values and calculate a Transaction Risk Index for said first representative by comparing one or more of the risk element values to an appropriate risk proxy.

2. The method of claim 1, wherein the risk element data relates to AML/BSA risk.

3. The method of claim 1 further comprising configuring the risk processor to retrieve risk element data from the transaction database related to another representative, and performing an analysis of the risk element data using the risk processor to calculate a Transaction Risk Index for said other representative.

4. The method of claim 1 further comprising using the Transaction Risk Index to take corrective action with regard to the representative.

5. The method of claim 1 wherein the risk element data is processed to obtain a plurality of risk element values for the representative, and the Transaction Risk Index for the representative is calculated by comparing each of the risk element values to an appropriate risk proxy, determining an individual risk score for each risk element value based on the comparison, and adding together the individual risk scores determined for all risk element values to obtain a total value equal to the Transaction Risk Index.

6. The method of claim 1, wherein the Transaction Risk Index is used to determine a risk classification for the representative.

7. The method of claim 6 further comprising using the risk classification to take corrective action with regard to the representative.

8. A method of determining a Transaction Risk Index for financial transaction representatives, the method comprising:

receiving information generated by a money transfer system regarding a plurality of financial transactions conducted by one or more representatives, wherein the information includes risk element data;

electronically storing records of the financial transaction information in a transaction database; and

configuring a risk processor to;

access the transaction database;

retrieve risk element data related to transactions conducted by one or more representatives;

process the risk element data into a plurality of risk element values for each representative;

store the risk element values in a risk element value database;

retrieve each risk element value from the risk element value database and compare the risk element value to an appropriate risk proxy to calculate a corresponding risk score for each risk element value; and

add together the risk scores calculated from each representative'"'"'s risk element values to obtain a Transaction Risk Index for each representative.

9. A system for evaluating the risk of conducting financial transaction through representatives, the system comprising:

a money transfer system adapted to generate information regarding a plurality of financial transactions conducted by one or more representatives, wherein the information includes risk element data, and to store records of the information in a transaction database; and

a risk processing system comprising a risk processor configured to access the transaction database and retrieve risk element data related to a first representative, wherein the risk processor is further configured to process the risk element data into one or more risk element values and calculate a Transaction Risk Index for said representative by comparing one or more of the risk values to an appropriate risk proxy.

10. The system of claim 9, wherein the risk element data relates to AML/BSA risk.

11. The system of claim 9, wherein the risk processor is configured to retrieve risk element data from the transaction database related to another representative, and to perform an analysis of the risk element data to calculate a Transaction Risk Index for said other representative.

12. The system of claim 9, wherein the risk processor is configured to process the risk element data to obtain a plurality of risk element values for the representative, and to calculate the Transaction Risk Index for the representative by comparing each of the risk element values to an appropriate risk proxy, to determine an individual risk score for each risk element value based on the comparison, and to add together the individual risk scores determined for all risk element values to obtain a total value equal to the Transaction Risk Index.

13. The system of claim 9, wherein risk element data is selected from the group consisting of representative complicity data, consumer data, transaction volume data and historical SAR-MSB compliance data, and combinations thereof.

14. The system of claim 9, wherein the risk proxy is selected from the group consisting of a specified amount of average monthly dollar volume or number of pay or send transactions;

a specified ratio of international transactions to domestic transactions;

a specified ratio of pay transactions to send transactions;

a specified number of transactions involving HRJ, HIFCA or HIDTA locations;

a specified percentage of transactions processed outside of listed business hours;

a specified number of SAR and/or MSB reports;

a specified result from an internal review procedure;

a specified proximity to suspended representatives;

a specified number of detected incidents involving suspected structuring or detection avoidance activities;

a specified number of transactions over a specified dollar amount involving a single consumer within a certain time period;

a specified number of consumers comprising a majority of a representative'"'"'s volume; and

combinations thereof.