Systems and methods for evaluating financial transaction risk

• US 7,620,596 B2
• Filed: 06/01/2007
• Issued: 11/17/2009
• Est. Priority Date: 06/01/2007
• Status: Expired due to Fees

• 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
• Primary Examiner(s): Abdi; Kambiz
• Assistant Examiner(s): Maguire; Lindsay M.
• Application Number:
  US11/757,255
• Publication Number:
  US 20080301040A1
• Time in Patent Office: 900 Days
• Field of Search: 705/35, 705/38
• US Class Current: 705/38
• 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 a financial transaction service provider to evaluate the risk of conducting money transfer transactions through representatives, the method comprising:

receiving information generated by a money transfer system regarding a plurality of prior financial transactions conducted by one or more representatives on behalf of the service provider, 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 prior transactions conducted by a first representative on behalf of the service provider;

establishing a plurality of risk proxies, wherein the risk proxies represent transaction risks associated with the one or more representatives, including at least an average number of money transfer transactions during a first specified time period and an average money transfer volume amount during a second specified time period, and establishing a plurality of specified risk values for each risk proxy, each specified risk value indicating a risk score associated with that risk proxy; and

using the risk processor to perform an analysis of the risk element data related to prior transactions conducted by the first representative, wherein the risk processor is configured to process the risk element data into a one or more risk element value corresponding to each risk proxy and to the transaction risk represented by that risk proxy, and is further configured to calculate a Transaction Risk Index for the first representative, by comparing each specified risk element value of the first representative to the corresponding risk proxy to determine the risk score associated with the first representative for that risk proxy and by then combining the determined risk scores to produce the Transaction Risk Index for the first representative.

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 transactions conducted by another representative on behalf of the service provider, 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 farther 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 a 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. The method of claim 1, wherein the first specified time period and the second specified time period are the same.

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

receiving information generated by a money transfer system regarding a plurality of prior financial transactions conducted by one or more representatives on behalf of the service provider, 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 prior transactions conducted by one or more representatives on behalf of the service provider;

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

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

retrieve each risk element value for one representative from the risk element value database and compare the risk element value to a risk proxy that represents a specified level of risk to calculate a corresponding risk score for each risk element value for that representative, wherein the risk proxy represents transaction risks associated with the one or more representatives and is selected from a group comprising (a) representative complicity data, (b) consumer biographical data, (c) high volume index data, and (d) historical SAR-MSB compliance data; and

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

10. A system for a financial transaction service provider to evaluate the risk of conducting financial transaction through representatives, the system comprising:

a money transfer system adapted to generate information regarding a plurality of prior financial transactions conducted by one or more representatives on behalf of the service provider, 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 prior financial transactions conducted by a first representative on behalf of the service provider, 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 the first representative by comparing one or more of the risk values of the first representative to risk proxies that each represents a specified level of risk;

wherein the risk proxies are 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.

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

12. The system of claim 10, wherein the risk processor is configured to retrieve risk element data from the transaction database related to prior transactions of another representative of the service provider, and to perform an analysis of the risk element data to calculate a Transaction Risk Index for said other representative.

13. The system of claim 10, 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 a 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.