XOR Data Exchange awarded patent for ‘measured reciprocity’ model

Austin-based data and analytics startup XOR Data Exchange has been awarded a U.S. patent for developing a new data exchange model which ensures fair and equal exchange practices among companies that share data with each other.

The data sharing scheme — which XOR calls “measured reciprocity” — differs from traditional give-to-get practices by allowing data owners to assign a value to types of information based on its quality or usability.

For example, a group of banks sharing data for credit reporting or authentication purposes may assign a higher value to data based on how recently it was collected, whereas historically a 10-year-old piece of information could be exchanged for one that is 10 days old.

Mike Cook

Mike Cook

“If I exchange a $100 bill with another person who has a $1 bill, it might look from a distance like the trade is fair and equal,” stated Mike Cook, founder and CEO of XOR Data Exchange. “Similarly, industries that rely on shared data to operate or meet regulatory standards may be losing value as a result of legacy practices.”

Although most industries share data in some form to maintain daily operations, XOR’s longstanding relationships in the U.S. finance and telecom industries suggest that banks and wireless carriers will likely be the first to employ this technology. Both of these industries answer to federal regulators regarding their data sharing practices, and often share certain pieces of information about their customers with the country’s national credit reporting agencies and with each other for fraud and operational purposes.

“We can expect data sharing practices between companies to continue growing during the coming years, and it’s important we work now to ensure consumers and data owners are protected,” Mr. Cook said. “This type of reciprocity will allow companies to meet the requirements of regulators and the needs of customers without sacrificing the upper hand to competitors.”

The measured reciprocity model can be integrated into XOR-built data exchange platforms or licensed to third-party software developers. Among XOR’s sharing platforms are the Small Business Risk Exchange, which helps business service providers identify fraud and credit risk, and the Compromised Identity Exchange, which has received praise from the finance industry in recent years for enabling a significant reduction in fraud caused by data breaches.