U.S. patent application number 10/945237 was filed with the patent office on 2005-02-17 for automatic financial account processing system.
Invention is credited to Norris, Jeffrey A..
Application Number | 20050038737 10/945237 |
Document ID | / |
Family ID | 26810799 |
Filed Date | 2005-02-17 |
United States Patent
Application |
20050038737 |
Kind Code |
A1 |
Norris, Jeffrey A. |
February 17, 2005 |
Automatic financial account processing system
Abstract
A method and apparatus for closed loop, automatic processing of
typical financial transactions, including loans, setting up
checking, savings and individual retirement accounts, obtaining
cashier's checks, ordering additional checks, issuing credit and
debit cards, wire transferring money, and so on. The transactions
are provided from a kiosk and controlled by a computer controller
interacting with the consumer. In the case of loans, a computer
controller helps the consumer in the completion of the application,
performs the underwriting, and transfers funds. The computer
controller obtains the information needed to process the
application, determines whether to approve the loan, effects
electronic fund transfers to the applicant's deposit account, and
arranges for automatic withdrawals to repay the loan. The computer
controller reviews documentation requirements including consumer
lending and other required documentation with the consumer and
obtains acknowledgment of acceptance of terms by having the
consumer sign an electronic signature pad. Copies of documents with
a digital photograph are printed out by a printer in the kiosk for
the consumer. Finally, the kiosk has the capability of imprinting a
credit or debit card in response to a consumer request.
Inventors: |
Norris, Jeffrey A.;
(Lexington, SC) |
Correspondence
Address: |
WITHROW & TERRANOVA, P.L.L.C.
P.O. BOX 1287
CARY
NC
27512
US
|
Family ID: |
26810799 |
Appl. No.: |
10/945237 |
Filed: |
September 20, 2004 |
Related U.S. Patent Documents
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Application
Number |
Filing Date |
Patent Number |
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10945237 |
Sep 20, 2004 |
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09591073 |
Jun 9, 2000 |
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09591073 |
Jun 9, 2000 |
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09305622 |
May 5, 1999 |
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6105007 |
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09305622 |
May 5, 1999 |
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08732584 |
Oct 15, 1996 |
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5940811 |
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08732584 |
Oct 15, 1996 |
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08327653 |
Oct 24, 1994 |
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08327653 |
Oct 24, 1994 |
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08113205 |
Aug 27, 1993 |
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Current U.S.
Class: |
705/39 |
Current CPC
Class: |
G06Q 20/18 20130101;
G06Q 20/1085 20130101; G06Q 20/10 20130101; G06Q 20/108 20130101;
G06Q 20/40 20130101; G06Q 40/02 20130101; G07F 19/201 20130101;
G06Q 20/4037 20130101; G06Q 40/025 20130101; G06Q 40/00 20130101;
G07F 19/20 20130101; G07F 7/08 20130101 |
Class at
Publication: |
705/039 |
International
Class: |
G06F 017/60 |
Claims
I claim:
1. An automatic account processing system for allowing an applicant
to establish a financial account over a communication network at a
remote interface, said account processing system comprising: a. a
remote interface adapted to: i. allow an applicant to remotely
request a financial account; and ii. receive data from an
applicant; b. a data processing system with associated memory for
verifying the applicant's identity based on data obtained from the
applicant and information about the applicant obtained from at
least one database containing information about the applicant's
identity; c. a communication interface electronically coupling the
data processing system to the remote interface; and d. without
human assistance, the data processing system adapted to: i. receive
the data from the applicant at the remote interface; ii. send
documentation required by regulation regarding the financial
account to the applicant at the remote interface; iii. receive
acknowledgement of the documentation required by regulation by the
applicant at the remote interface; iv. access the at least one
database for information relevant to the applicant's identity; v.
verify the applicant's identity by comparing certain of the
information received from the applicant with certain of the
information received from the at least one database relevant to the
applicant's identity; vi. determine in closed loop and without
human assistance if the applicant's requested financial account is
approved based on the verification of the applicant's identity; and
vii. send a result to the remote applicant interface informing the
applicant whether or not establishment of the requested financial
account was approved.
2. The automatic account processing system of claim 1 wherein the
data processing system sends the documentation required by
regulation regarding the financial account to the applicant at the
remote interface after the data processing system receives the data
from the applicant received at the remote interface.
3. The automatic account processing system of claim 1 wherein the
data processing system sends the documentation required by
regulation regarding the financial account to the applicant at the
remote interface before the data processing system sends a result
to the remote interface informing the applicant whether or not
establishment of the requested financial account was approved.
4. The automatic account processing system of claim 1 wherein the
documentation required by regulation is a consumer lending law.
5. The automatic account processing system of claim 1 wherein the
documentation required by regulation is comprised from the group
consisting of regulatory requirements, the Federal Reserve Board
Regulations B and Z, Title I of the Consumer Credit Protection Act,
and the Federal Truth In Lending Act.
6. The automatic account processing system of claim 1 wherein the
documentation required by regulation comprises terms of the
financial account.
7. The automatic account processing system of claim 1 wherein the
acknowledgement of the documentation required by regulation by the
applicant at the remote interface is an electronic signature.
8. The automatic account processing system of claim 7 wherein the
electronic signature is received from a signature pad.
9. The automatic account processing system of claim 1 wherein the
data processing system is further adapted to electronically deliver
the documentation required by regulation to the applicant at the
remote interface.
10. The automatic account processing system of claim 1 wherein the
remote interface is adapted to print the documentation required by
regulation using an internal printer or through a printer port
coupled to the remote interface.
11. The automatic account processing system of claim 1 wherein the
data processing system will not approve the financial account if
acknowledgement of the documentation required by regulation by the
applicant at the remote interface is not received.
12. The automatic account processing system of claim 1 wherein the
data processing system is further adapted to open the financial
account at the financial institution upon approval.
13. The automatic account processing system of claim 1 wherein the
data processing system is further adapted to open the financial
account at the financial institution upon approval and
acknowledgement by applicant of the documentation required by
regulation.
14. The automatic account processing system of claim 1 wherein the
data processing system is further adapted to effect a funds
transfer to an account at a financial institution from the approved
account.
15. The automatic account processing system of claim 1 wherein the
remote interface comprises a personal computer monitor.
16. The automatic account processing system of claim 1 wherein the
data processing system interface is further adapted to
electronically deliver financial account documentation to the
applicant at the remote interface.
17. The automatic account processing system of claim 1 wherein the
data processing system is further adapted to communicate a
financial account number to the applicant at the remote interface
if the financial account is approved.
18. The automatic account processing system of claim 1 further
comprising a card issuing device located at the remote interface
and adapted to configure a card based on the applicant and
financial account information wherein the data processing system is
further adapted to effect issuance of a transaction card associated
with the financial account from the card issuing device after
approval of the financial account.
19. The automatic account processing system of claim 1 wherein the
data processing system has associated memory having establishment
criteria bearing on the ability and willingness of the applicant to
comply with account requirements for establishing and holding the
financial account at a financial institution based on the data
obtained from the applicant and information about the applicant
obtained from at least one database containing information about
the applicant relevant to the ability and willingness of the
applicant to comply with financial account requirements; and the
data processing system is further adapted to: compare certain of
the information received from the applicant and certain of the
information received from the at least one database relevant to the
applicant's ability and willingness to comply with the financial
account requirements; and determine in closed loop and without
human assistance if the applicant's requested financial account is
approved based on the information relevant to the applicant's
ability and willingness to comply with the financial account
requirements.
20. The automatic account processing system of claim 19 wherein the
establishment criteria is weighted and the data processing system
is further adapted to: provide a score based on the comparison of
certain of the data received from the applicant and certain of the
information received from the at least one database relevant to the
applicant's identity and the ability and willingness of the
applicant to comply with the financial account requirements; and
determine whether or not to approve the financial account request
based on the score.
21. The automatic account processing system of claim 1 wherein the
financial account is one of the group consisting of a checking
account, savings account, retirement account, interest bearing,
non-interest bearing account, and credit account.
22. The automatic account processing system of claim 1 further
comprising a printer located at the remote interface for printing
checks, the data processing system further adapted to cooperate
with the remote interface to effect printing a negotiable
instrument having an assigned value to be drafted against the
financial account.
23. The automatic account processing system of claim 1 wherein the
data processing system is further adapted to effect ordering
negotiable instruments associated with the financial account.
24. The automatic account processing system of claim 1 further
comprising an electronic signature pad located at the remote
interface and adapted to electronically receive the applicant's
signature to indicate acceptance of the financial account.
25. The automatic account processing system of claim 19 wherein the
at least one database includes credit bureau information relating
to the applicant.
26. The automatic account processing system of claim 1 wherein the
data processing system is configured to electronically transmit an
image of a financial account agreement to the remote interface for
display on the remote interface.
27. The automatic account processing system of claim 1 wherein the
data processing system sends a result to the remote interface
informing the applicant that the decision regarding the financial
account approval is delayed if the financial account was not
approved.
28. A method for providing automatic closed loop financial account
processing over a communication network at a remote interface,
comprising the steps of, without human assistance: a. receiving
data about the applicant applying for a financial account from the
remote interface; b. sending documentation required by regulation
regarding the financial account to the applicant at the remote
interface; c. receiving acknowledgement of the documentation
required by regulation by the applicant at the remote interface; d.
accessing at least one database for information relevant to the
applicant's identity; e. verifying the applicant's identity by
comparing certain of the information received from the applicant
with certain of the information received from the at least one
database relevant to the applicant's identity; f. determining in
closed loop and without human assistance if the applicant's
requested financial account is approved based on the verification
of the applicant's identity; and g. sending a result to the remote
applicant interface informing the applicant whether or not
establishment of the requested financial account was approved.
29. The method of claim 28 wherein said step (b) is performed
before said step (a).
30. The method of claim 28 wherein said step (b) is performed
before said steps (d)-(g).
31. The method of claim 28 wherein said step (b) is performed after
said step (d).
32. The method of claim 28 wherein said step (b) is performed after
said step (e).
33. The method of claim 28 wherein said step (b) is performed after
said step (f).
34. The method of claim 28 wherein the documentation required by
regulation is a consumer lending law.
35. The method of claim 28 wherein the documentation required by
regulation is comprised from the group consisting of regulatory
requirements, the Federal Reserve Board Regulations B and Z, Title
I of the Consumer Credit Protection Act, and the Federal Truth In
Lending Act.
36. The method of claim 28 wherein said step of receiving
acknowledgement is comprised of receiving an electronic signature
of the applicant from the remote interface.
37. The method of claim 28 wherein said step of receiving
acknowledgement is comprised of receiving an electronic data file
transmission from the remote interface.
38. The method of claim 28 further comprising electronically
delivering financial account documentation to the applicant.
39. The method of claim 28 further comprising printing the
documentation required by regulation using an internal printer or
through a printer port coupled to the remote interface.
40. The method of claim 28 wherein further comprising not approving
the financial account if acknowledgement of the documentation
required by regulation by the applicant at the remote interface is
not received.
41. The method of claim 28 further comprising opening the financial
account at the financial institution upon approval.
42. The method of claim 28 further comprising opening the financial
account at the financial institution upon approval and
acknowledgement by applicant of the documentation required by
regulation.
43. The method of claim 28 further comprising effecting a funds
transfer to an account at a financial institution from the approved
account.
44. The method of claim 28 further comprising electronically
delivering financial account documentation to the applicant at the
remote interface.
45. The method of claim 28 further comprising communicating a
financial account number to the applicant at the remote interface
if the financial account is approved.
46. The method of claim 28 further comprising effecting issuance of
a card associated with the financial account from a card issuing
device located at the remote interface after approval of the
financial account.
47. The method of claim 28 further comprising: comparing certain of
the information received from the applicant and certain of the
information received from at least one database relevant to the
applicant's ability and willingness to comply with the financial
account requirements; and determining in closed loop and without
human assistance if the applicant's requested financial account is
approved based on whether the information relevant to the
applicant's ability and willingness to comply with the financial
account requirements meets establishment criteria in memory in the
data processing system.
48. The method of claim 47 wherein the establishment criteria is
weighted and further comprises: providing a score based on the
comparison of certain of the data received from the applicant and
certain of the information received from the at least one database
relevant to the applicant's identity and the ability and
willingness of the applicant to comply with the financial account
requirements; and determining whether or not to approve the
financial account request based on the score.
49. The method of claim 28 further comprising printing a negotiable
instrument at the remote interface having an assigned value to be
drafted against the financial account.
50. The method of claim 28 further comprising ordering negotiable
instruments associated with the financial account.
51. The method of claim 28 further comprising electronically
receiving the applicant's signature to indicate acceptance of the
financial account from a signature pad located at the remote
interface.
52. The method of claim 47 wherein the at least one database
includes credit bureau information relating to the applicant.
53. The method of claim 28 further comprising electronically
transmitting an image of a financial account agreement to the
remote interface for display on the remote interface.
54. The method of claim 28 further comprising sending a result to
the remote interface informing the applicant that the decision
regarding the financial account approval is delayed if the
financial account was not approved.
Description
BACKGROUND OF INVENTION
[0001] 1. Field of the Invention
[0002] The present application is a continuation in part of Serial
No. 113,205 filed on Aug. 27, 1993.
[0003] The present invention relates generally to closed loop
financial transactions. More specifically, the present invention is
a method and apparatus for processing financial transactions
automatically, including loans, applications for credit,
establishment of accounts and other transactions that typically
take place at banks.
[0004] 2. Discussion of Background
[0005] Currently, consumers go to banks, credit unions and other
types of financial institutions for a wide variety of services. At
these institutions, one can deposit and withdraw money, transfer
finds from one account to another, establish checking and ravings
accounts, arrange for automatic deposits to and withdrawals from
accounts, apply for credit and debit cards, establish and fund
individual retirement accounts, purchase certificates of deposit
and savings bonds, obtain cashier's checks, and order checks for
checking accounts. Although the numbers and types of financial
institutions have proliferated, going to these during normal
working hours is still a chore.
[0006] For years, night deposit boxes have made it possible for
businesses and individuals to deposit money in a bank after hours.
The advent of automatic teller machines make some of these
financial services, particularly withdrawal of funds from checking
accounts and the obtaining of cash advances against a credit car
limit, possible both during the day and after normal banking hours.
Of course, many financial transactions can still be handled through
the mail. Nonetheless, there remains a significant number of
services that can only be provided to a consumer if he or she is
willing and able to go to a financial institution to get them.
[0007] An example of one such service is borrowing money. Borrowed
money is essential to facilitate commerce and personal finance.
Individuals and businesses borrow money on both a short term and a
long term basis for better management of their day-today financial
transactions and to obtain the goods and services they need when
they need them. If the need to borrow money is anticipated, the
arrangements for borrowing can be made in advance of the need. But
financial needs are sometimes not foreseen, and the extent of a
financial need is not always known or knowable in advance.
Furthermore, these arrangements are usually somewhat of a necessary
inconvenience because they take time and effort to complete.
[0008] When an individual needs to borrow money, the lender will
not only expect repayment, but will also want to have confidence
that the amount lent can be repaid on time. The effort by the
borrower to provide the lender with this confidence level will
depend on the amount lent. For example, a loan of less than one
hundred dollars might be made simply on the basis of knowing that
the individual to whom the money is lent has a job. For lending
millions of dollars, the leader may want to take a security
interest in assets that have a value in excess of the amount lent,
to cover fluctuations in the values of those assets during the time
the loan is being repaid.
[0009] Not only will the borrower have an obligation to convince
the lender that the borrower is creditworthy, the lender also has
obligations to the borrower. For example, in consumer loans, laws
the lender to carefully explain certain aspects of the terms of the
loan, and, if the borrower's application for the loan is turned
down, the reasons why.
[0010] When time and foresight permit advance arrangement of loans,
the act of borrowing can be made much simpler. When time is short
and the need for the loan was not anticipated, the act of going
through the process of borrowing may be so time-consuming that
obtaining the loan may not be possible at all.
[0011] Typically, a business and an individual will either borrow
relatively small amounts using credit cards, with pre-approved
credit limits or go to a lending institution for larger sums, where
the pos of completing documentation for borrowing money takes
longer and is subject to conditions that must be fulfilled before
the loan can be made. Naturally, for large loans the safeguards for
the lender take time. But for smaller loans, those above credit
card limits but still below a level where there might be a
significant concern of the ability of the leader to repay the loan,
there exists a need for greater convenience.
[0012] Other services offered by banks, such as applying for credit
cards, are similar to borrowing money insofar as applications must
be completed and processed for approval. Others are essentially
administrative, such as opening a checking or savings account,
obtaining additional checks and obtaining a debit card. All such
services must be obtained by going to a bank and completing the
necessary documentation, with the attendant inconvenience.
SUMMARY OF THE INVENTION
[0013] According to its major aspects and briefly state the present
invention is a method and apparatus for closed loop processing of
financial transactions such as, especially, a loan or credit card
application, including completion of the application, underwriting,
and transferring of funds. The term "closed loop" means that all
the steps involved are performed by a computer that is programmed
to make the decision to approve or disapprove the request and to
complete all aspects of it, including complying with regulatory
requirements, on behalf of the financial institution within minutes
of the time the consumer initiates the request for the particular
service. In loan application processing, for example, the closed
loop includes the steps of transferring the funds to the borrower
and arranging for repayment, as well as completing the loan
application and underwriting it, including execution of regulatory
requirements related to consumer financing, all done without human
intervention. In the primary examples presented in the present
invention, for loans and credit cards, the apparatus uses a
computer controller and a telecommunications link, plus other
electronic communications equipment, to enable the complete,
automated processing of the application; namely: (1) the exchange
of information with the applicant, preferably using "touch-screen"
or voice recognition technology; (2) the underwriting, which means
the evaluation and, importantly, approval of the application, plus,
most importantly; (3) immediately transferring electronically the
funds from a source of funds to the deposit account designated by
the applicant; (4) completing of consumer financing regulatory
requirements; and, optionally, (5) automatic withdrawals from the
applicant's account to repay the loan.
[0014] With respect to financial transactions generally, the
present invention is the closed loop performance of financial
functions via a computer and monitor mounted in a kiosk, located in
convenient places and using "touch-screen" or voice recognition
technology, for the consumer to indicate choices and provide
information, and an electronic signature pad to obtain the
signature of the applicant indicating understanding and acceptance
of the terms of the transaction.
[0015] In the example of a loan or credit card, an applicant
applies via a variety of communication and electronic routes to
make contact with the computer, which responds to the applicant and
obtains information using touch-screen technology, in which the
consumer applicant indicates a choice or supplies information by
touching a computer monitor at the locations provided or voice
recognition technology, where the consumer simply states a choice
or other appropriate response recognizable to the computer
controller. In the case of a touch screen monitor, the computer
controller can sense touching of the screen electronically and
determines the location touched. Information about the applicant is
also obtained via electronic transfer of data to the computer from
one or more databases, including those that provide name and
address based on a caller's telephone number, and from credit
bureaus that provide credit reports on an applicant given an
applicant's name, a social security number and an address.
[0016] In a preferred embodiment, the computer capability of the
present invention also contains evaluation criteria in the form of
underwriting models, that are used to "score" the application; that
is, to make a determination of whether to approve the application
based on a computer analysis of factors deemed important in
assessing the would-borrower's ability and willingness to repay the
loan and to quantify the risk of its not being paid.
[0017] Finally, the loan agreement and other documentation,
important for assuring that regulatory requirements have been met,
are signed by the consumer using the electronic signature pad, and
copies of the agreements with the electronic signature set in place
are printed out for the consumer. The processing of the application
is done completely and automatically, without human
intervention.
[0018] In a preferred embodiment, the user-interface is a kiosk
housing a computer controller, at least one telecommunications
link, a monitor or "touch-screen" monitor, a camera to make a
digital photograph of the applicant, a bank card reader to identify
an applicant and activate the computer controller, and means for
electronically transferring the signature and a photograph of the
borrower onto the loan or credit card agreement. The kiosk may be
established at a convenient location, such as an airport terminal,
a bank, a shopping area or a store selling goods that might carry a
price higher than a typical credit card limit, such as a jewelry
store or computer sales store, for example. The kiosk can enable
the consumer to establish checking and savings accounts, apply for
and be immediately issued or sent credit and debit cards, establish
and fund individual retirement accounts, obtain savings bonds and
certificates of deposit, arrange for automatic deposits to and
withdrawals from accounts, obtain cashier's checks, and order
checks for checking accounts.
[0019] An important feature of the present invention is the extent
to which the financial transactions are processed by the computer
controller and without human intervention. Computes are used to
assist in processing applications routinely, but the extent of use
here significantly exceeds that known in the art. Here, the
processing by computer controller includes underwriting the
application and deciding to make or deny the loan (or delay loan
approval until more information is provided) or credit, and the
issuance of funds in the form of an electronic fund transfer from a
source of funds controlled by the computer controller or printing
of a check by the printer housed in the kiosk, or issuance of a
transaction card, such as a credit, debit or "smart" card,
imprinted with the necessary information. The use of the computer
to access certain information not within its own memory via
telecommunications link also eliminates the need for human-based
processing. Avoiding human intervention not only saves processing
time and reduces errors, but also eliminate bias in the decision to
approve or deny the application.
[0020] The use of a kiosk to make available to borrowers the
communications capability for applying for a loan or credit card is
another important feature of the present invention. Kiosks, placed
in convenient locations, will contain electronic equipment that
facilitates and speeds all of the steps of the application.
Importantly, because fluids are deposited directly into the
borrower's bank account rather than dispersed directly to the
borrower from an automatic teller machine, the obtaining of funds
from such a kiosk is safer than obtaining funds from a teller
machine.
[0021] Yet another feature of the present invention is the use of
an electronic signature pad to obtain signatures of consumers for
applications, for signature specimens, for indicating an
understanding of regulatorily-required disclosures, and for consent
to the various financial services provided. Because signatures can
be obtained and recorded electronically, there is no need for the
consumer to interact with a financial representative handling paper
documents, and, therefore, financial transactions can be done at
any time of the day. Documents that are to be given to the consumer
can be printed out by the printer carried by the kiosk. In fact,
the present invention greatly reduces the need for financial
institutions to maintain offices and makes it more cost effective
for them to provide kiosks in remote areas rather than branch
offices.
[0022] Yet another feature of the present invention is the
inclusion of a camera to make a digital photograph of the user for
placing the photograph on checks, credit cards and loan documents,
to prevent fraud and deter theft.
[0023] The use of "touch screen" technology, another feature of the
present invention, makes it easier, quicker and more reliable for
the consumer to indicate a selection.
[0024] Other features and advantages will be apparent to those
skilled in the art of automatic financial transactions from a
careful reading of the Detailed Description of Preferred
Embodiments accompanied by the Drawings.
BRIEF DESCRIPTION OF THE DRAWINGS
[0025] In the drawings,
[0026] FIG. 1 is a flow chart illustrating the menu of services and
the major steps of an automatic financial lending system according
to a preferred embodiment of the present invention;
[0027] FIG. 2 is a perspective view of the fount of a kiosk
according to a prefaced embodiment of the present invention;
and
[0028] FIG. 3 is an en ed view of the kiosk of FIG. 2 according to
a preferred embodiment of the present invention.
DETAILED DESCRIPTION OF PREFERRED EMBODIMENTS
[0029] The present invention is a method and apparatus for
providing closed loop financial services. In a preferred
embodiment, these services include those identified in FIG. 1:
specifically, making loans, issuing checks (such as cashiers'
checks) certificates of deposit, treasury bills, mutual fund
shares, issuing transaction cards, such as credit/debit cards and
so-called "smart" cards, and establishing new accounts and
depositing funds. The particular examples of loans and credit cards
will be described in detail. However, the other services, as will
be described presently, can also be obtained in accordance with a
preferred embodiment of the present invention.
[0030] The present invention includes making a loan or obtaining a
transaction card automatically, that is, a closed loop financial
transaction. By the term "automatically," it is meant that an
application is received and processed, the decision to grant the
loan or to issue the credit card, and the deposit of the loaned
amount to the borrower's account, is made entirely by computers in
conjunction with voice and electronic communication equipment.
Similarly, in the case of other financial transactions
"automatically" also means each step is ha ed by the computer
controller without human intervention, assistance or
decision-making.
[0031] The term "required documentation" or "documentation required
by regulation" refers to documents required by the lender as part
of good financial institutional practice for meeting internal
requirements and regulatory requirements. With regard to regulatory
requirements in particular, the regulations are Federal Reserve
Board Regulations B (12 CFR 202 et seq.) and Z (12 CFR 225 et seq)
promulgated pursuant to Title I of the Consumer Credit Protection
Act (15 USC 1640 et seq.) and the Federal Truth In Lending Act (15
USC 1601 et seq.), respectively. These regulations prescribe the
information to be given to a borrower or potential borrower
regarding the terms of the transaction and reasons for denial of
credit. Financial institutions usually comply with these regulatory
requirements by providing the information to consumers in writing
an obtaining the consumer's signature that the information was in
fact provided and understood.
[0032] "Transaction card," used in the context of financial
transactions, refer to credit, debit, "smart", merchant, or credit
identification cards containing information encoded in some way on
the card, such as magnetically.
[0033] FIG. 1 shows a flow diagram according to a preferred
embodiment of the present invention. The user (sometimes referred
to herein generally as "consumer" or "applicant" or "borrower" in
the case of loan applications) accesses the system by approaching a
kiosk 40 (see FIGS. 2 and 3) that has either voice recognition
capability through a voice communication processor 30 or a monitor
50 with touch screen capability. Touch screen capability in
monitors is well known. To indicate a choice presented by a
computer monitor having touch screen capability, the user simply
touches the screen at the location indicated. For example, images
of a "yes" and a "no" button will appear and, by touching the "yes"
button, the consumer indicates an affirmative answer to the
question presented.
[0034] Use of voice communication processor 30 the consumer to
state aloud a choice rather than point to one on monitor 40. This
technology is obviously more sophisticated than touch screen
technology but is also well known in several other
applications.
[0035] Touch screen monitor 50 or voice communication processor 30
enables the consumer to "talk" to the transaction processor 10. By
so communicating, information can be exchanged and the particular
types of transactions selected by the consumer can be completed.
Importantly, the consumer is interacting with transaction processor
10 without assistance from employees of the financial institution.
Interacting with a transaction processor can be viewed as
impersonal, but it can also be viewed as more private and freer of
bias.
[0036] Kiosk 40 is activated by drawing an ATM or bank card or
equivalent through a magnetically encoded card reader 70 or by
providing a member number for credit unions or a merchant number
for merchants and finance companies. The information encoded in the
magnetic stripe on the back of the card is read by reader 70 and
the information passed to transaction processor 10.
[0037] In a preferred embodiment, transaction processor 10 inquires
of the consumer as to the type of transaction desired and selects
the corresponding application or account information module 130,
140, respectively, that then assists its informational gathering
activities. If the consumer wishes to apply for a loan, credit or
to set up a new account, application module 130 is activated to
obtain die requisite information from the consumer and comply with
lending institution and regulatory requirements associated with the
particular application. If the consumer desires to withdraw or
transfer funds or to make a purchase or a deposit, transaction
processor 10 will activate account information module 140 to move
funds from an account or from one source of finds to another
account or will issue a check from kiosk 40 to the merchant or
directly to the consumer.
[0038] In either case, information must be exchanged with the user.
This information comes in part from the consumer's physically
indicated or spoken responses to inquiries and in part from a
database 60 using the borrower's telephone number for
identification. Transaction processor 10 determines caller's name
and address from database 60 based on the telephone number of the
consumer or, in a preferred embodiment, from information encoded
magnetically on a bankcard used by the consumer to activate kiosk
40. Other than confirmation that the consumer wants to apply for a
loan (or, alternatively, to initiate one of the other transactions
possible), the amount desired, and the term, transaction processor
10 initially needs only the applicant's name, address and social
security number for identification. This information is used to
obtain a credit report from a credit bureau.
[0039] The applicant's credit report is obtained from the credit
bureau by transaction processor 10, evaluated using an underwriting
model 90, to be described more fully below, and a decision is made
based on the results of the evaluation by underwriting model 90,
which result are in the form of a score and an associated risk
factor, to grant or deny the loan or credit card application.
Transaction processor 10 inform the borrower of the decision and,
if the application is granted, presents the terms of the financial
transaction to the applicant via monitor 50. If the borrower
accepts the terms of the loan or credit card, the borrower can sign
the documents electronically using an electronic signature pad 100
on kiosk. The same approach can be used to verify in writing the
fact that the borrower understood the terms of the loan or credit
card, as required by law, or, if the loan or credit card is denied,
that the borrower received a copy of the negative determination
letter with its explanation as to why the application was denied.
In each case the consumer's signature on the documentation can be
secured electronically.
[0040] When transaction processor 10 has received the credit
report, it sends the report electronically to underwriting model 90
(which could be interfaced with a "neural network," a of computer
program that adapts an underwriting model to lending experience) to
begin the evaluation of the application. The evaluation may proceed
by iterating among a set of criteria that are weighted. In the
present application, one criterion that may be used in deciding to
approve the application is that the applicant have a full time job;
this criterion may in fact have the greatest weight. However, if
the borrower owns a home and has several bank accounts, criteria
directed toward these assets might outweigh the lack of a job.
[0041] Analyzing the loan or credit card application involves
determining a score on which granting or denying the loan or credit
card will be based A typical scoring system simply assigns points
to various factors that may be considered in the loan or credit
granting determination. Preferably, however, an underwriting model
is used for scoring the application or at least for updating on a
periodic basis the points applied by a more traditional scoring
system.
[0042] Underwriting model 90 is established by first identifying
criteria that might have a bearing on the ability and willingness
of the borrower to repay the loan or credit card. Then historical
data is gathered to determine the influence, or weight, to be given
to each criterion. The data is examined and the initial set of
weighting factors are applied to develop estimates of the actual
outcome of the data. The model's estimates are compared to the
actual outcome, and the weights are adjusted to make the estimates
closer until the outcome predictions have been optimized.
Underwriting model 90 uses information calculated from the credit
report, such as the ratio of debt to liquidity. An underwriting
model designer will also make a judgment on how few criteria are
needed to make a sufficiently accurate prediction. There are
commercially available computer programs, known to those skilled in
the art of computer decision-making, that can be used to develop
underwriting models for the lending model upon entering the
criteria and initial weighting factors.
[0043] If the analysis of underwriting model 90 determines that the
loan should be made or the credit card issued, additional
information is confirmed by transaction processor 10 from data
obtained from database 60 or a credit bureau or is obtained from
the borrower using transaction processor 10, namely, the borrower's
deposit account number, the caller's facsimile number, and the
callers acceptance of automatic withdrawal. Then, the terms and
conditions of the loan or credit card must be established in
writing and the borrower's signature obtained. Obtaining the
signature of the borrower an be accomplished using an inkless
electronic signature pad 100 and electronic pen 105 that, when the
borrower ma a signature while hold pen 105, recreates, through
digit technology, the signature of the borrower on the signature
line of the documents displayed on the personal computer
monitor.
[0044] A camera 10 carried by kiosk 40 can be used to take a
photograph of the applicant digitally. A digitally generated
photograph of the applicant can be placed on documents near the
signature location. The signed documentation is printed using a
facsimile or a laser printer (not shown) in kiosk 40. The
documentation may include a copy of the digitally-generated
photograph next to the signature and is issued through a printer
port 120.
[0045] Transaction processor 10 then issues an electronic
instruction to a source of funds such as lending institution (not
shown) to transfer electronically the borrowed amount to the
borrower's bank account at a deposit institution (not shown).
Before the application is approved, however, there are several
checks made by transaction processor 10 to prevent fraud. For
example, the name of the applicant and the applicant's signature is
verified, both electronically. Information obtained from the
applicant including date of birth and the number of years with
present employer, is compared to that available from a credit
report or other sources such as the national death and birth
records, drivers' licenses, criminal records, etc.
[0046] In a preferred embodiment, part of the terms of the lending
agreement include permission from the borrower for the lender to
make an automatic, periodic withdrawal from the borrower's bank
account for repaying the loan. The automatic direct deposit by
electronic fund transfer to and the automatic withdrawal of payment
from the borrower's deposit account are especially important is of
the present invention because they eliminate portions of the
process from human control and delays. Also, ire borrower has an
immediate need for the loan, direct deposit will make these funds
available as quickly as possible, avoiding delays resulting from
mailing, lost checks, the time taken for a check to clear, and the
need to go to the deposit institution to make the deposit. Any
documentation requiring the borrower's signature, including
consumer lending disclosure information, will be handled as
discussed previously.
[0047] No human needs to intercede. Transaction processor 10
communicates with the borrower to exact information from data base
60 and a credit bureau; underwriting model 90 makes the decision to
lend, and transaction processor 10 obtains the signature of the
borrower on the lending agreement using signature pad 100.
Processor 10 effects the electronic fund transfer and arranges for
automatic withdrawal of monthly payments. Throughout the process,
transaction processor 10 will interact with the borrower using
monitor 50 of kiosk 40 to prompt the borrower, who can indicate on
the touch screen responses to processor 10 for the latter to obtain
the credit report and process the application. Loan or credit
documentation can be stored electronically by processor 10 in kiosk
40, or be transmitted by modem (not shown) within kiosk 40 and
connected electronically to transaction processor 10, printed using
an internal printer, and the copies of the forms issued through
printer port 120.
[0048] As an example of the prompting that can be done, transaction
processor 10 can ask: "Are you currently employed? Press `yes` or
`no`", "How much is your monthly income?", or "How much do you
spend per month?" This information, provided by way of example,
would be available from a credit report, but can be confirmed by
prompting a response. Alternatively, if the information is asked
and the responses, based on a partial analysis, indicate that the
loan cannot be made or credit not extended, the applicant can be so
informed by printing a regulatory-compliant credit denial letter,
and the time, need and cost of obtaining a credit report can be
avoided. The answers to the prompts can be input by the borrower by
using "touch screen" monitor 50 in kiosk 40.
[0049] After approving the loan or credit card application,
transaction processor 10 will review with the borrower the
information relevant to the loan or issuance of a credit card, such
as the account number to which the direct deposit will be made and
the name of the deposit institution, the account number and name of
the automatic withdrawal tion, the date of the month and the first
month the automatic withdrawal will begin, the address and payee if
the check is not intended for deposit into an account, late charges
that could apply, the finance charge, the annual percentage rate,
the total cost of all the payments, and the total amount financed.
This information needed from the borrower regarding his or her
accounts can be obtained by transaction processor 10 after
underwriting model has made the determination to make the loan or
issue the credit card.
[0050] The preferred embodiment for enabling a borrower to complete
a loan or credit card application is housed in kiosk 40. FIGS. 2
and 3 depict kiosk 40 for use by an applicant in initiating an
application. A kiosk is basically a housing that contain all of the
equipment for a borrower to use in contacting and communicating
with a remote, centrally located traction processor 10, or,
alternatively, kiosk 40 can contain processor 10. Kiosk 40 includes
monitor 50 with touch screen capability, a magnetic bank card
reader 70 that enables a bank card to be read to identify an
applicant as well as the applicant's bank and corresponding
checking account, a magnetically encrypted card reader, an internal
printer with communications link (not shown in FIGS. 2 and 3) and,
in a preferred embodiment electronic signature pad 100 and
associated electronic pen 105 and a security camera 110. Signature
pad 100 is a surface that converts the motion of electronic pen 105
as borrower holds it and goes through the motions of making a
signature to an electronic image of a signature and transfers it
electronically to transaction processor 10. Camera 110 takes a
digital photograph of the consumer and transmits it to traction
processor 10 for application to checks, credit or debit cards,
so-called "smart" cards, and loan documents. "Smart" cards are
plastic cards with magnetically encoded information about the
bearer of the cards, including such information as name, address,
telephone number, social security number, any percent medical data,
next of kin, account information, and so on.
[0051] In use, an applicant will enter kiosk 40 and indicate using
"touch screen" monitor 50 his interest in a loan or any of the
other financial services offered. He will be prompted by
transaction processor via monitor 50 to run a credit, debit,
"smart", ATM or merchant card through a card reader 70 to identify
himself or, alternatively, may simply enter sufficient other
information to validate his identity. Transaction processor 10 will
access one or more databases 60, such as a credit bureau, to obtain
a credit report, to run a fraud analysis, for signature
verification, or to see if the consumer has written bad checks or
the card is stolen. As before, the information obtained from the
applicant and from the it report will be scored, preferably using
underwriting model 90, to determine whether or not to approve the
application. Whether approved or disapproved, the applicant will be
so informed and the loan or credit information or, if appropriate,
a loan/credit denial letter provided. The signature of the
applicant can be obtained using electronic signature pad 100, and a
signed copy of the agreement printed out through printer port 120
with a digitized photograph of the applicant. Meanwhile, the
electronic transfer of funds will have been arranged and
communicated to applicant (or to a merchant or dealer selling the
item purchased with the loan) as well as obtaining the borrower's
permission via a signed consent form done in similar fashion to
have his deposit account automatically debited to repay the loan.
All regulatory requirements will be met by presenting information
to the consumer via monitor 50 and obtaining concurrence of
understanding by a signature using signature pad 100.
[0052] As stated above, loans and credit cards are but one of many
types of services that can be provided by a kiosk of the type
described or with slight modifications. In fact, all the basic
services provided by financial institutions--depositing and
withdrawing money, transferring finds from one account to another,
establishing checking and savings accounts, arranging for automatic
deposits to and withdrawals from accounts, applying for
credit/debit/smart cards, establishing and funding individual
retirement accounts, purchasing certificates of deposit, savings
bonds, and mutual find shares, obtaining cashier's checks, and
ordering checks for checking accounts--can be done using the kiosk
and computer controller of the present invention.
[0053] For example, and referring to FIG. 3, if a consumer has a
checking or savings account with a particular bank and desires alit
card, one that enables him to debit such an account for purchases
or to obtain cash, he can use the features of a kiosk 40, including
a transaction processor 10 (see FIG. 1) and a touch screen monitor
50, its electronic signature pad 100, credit card reader 70,
document and check printer (not shown), printer port 120, and
credit/debit card port 150. In a procedure somewhat similar to
applying for a loan, the consumer can apply for a credit card with
a credit limit or a debit card that draws on his or her account.
If, instead of a loan, the applicant wants a line of credit or has
an account with a bank a credit or debit card, respectively, can be
imprinted by transaction processor, including a copy of the digital
photograph taken with camera 110 and issued from kiosk 40 through
credit card port 150 from a supply of cards kept within kiosk
40.
[0054] In establishing a checking or savings account, the consumer
can transfer finds from another account to set up the new account
or feed in a check to a scanner for deposit to the new account.
Identifying the signature specimen can be obtained by the signing
of electronic signature pad 100. Regulatory approvals can be
obtained by first displaying documents on the monitor screen,
highlighting those requiring careful explanation and obtaining both
the consumer's acknowledgment that they were explained and that he
understood them. Copies of the documents can be printed out for the
consumer to take with him by the printer carried in kiosk 40.
[0055] It will be apparent to those skilled in the art that many
modifications and substitutions may be made to the foregoing
preferred embodiment without departing from the spirit and scope of
the present invention which is defined by the following claims.
* * * * *