The data showed that there was a minor increase in the percentage of consumers that had a new inquiry compared to a year prior, and a material increase in those that opened a new account.[Read More]
We included telecommunications providers in the cybersecurity survey carried out on our behalf by independent research company Ovum. What did we find?[Read More]
As a result of several recent policy developments, talk of achieving meaningful US financial regulatory reform is getting louder.[Read More]
Several top global banks have made it into the press again — for the wrong reasons, reasons to do with international money laundering schemes. From facilitating trading with companies in sanctioned countries, to moving cash for Russian launderers to channeling Mexican drug money, these banks were caught and assessed steep fines by regulators. Even worse is the reputational damage that comes from not . These banks probably thought they were taking the “risk-based approach” that is at the center of most anti-money laundering (AML) regulations and know your customer (KYC) appraoches. But were they doing enough? Did they truly know the customer, their business and the relationship? Did they understand who stood behind the customer – where the funds were coming from? Over the past years, regulatory pressure on banks has increased and resulted in more sophisticated risk-based approaches that require banks to consider much more information on the customer... [Read More]
In a previous post, we noted that the majority of consumers who had a 7-year-old delinquency purged from their credit file saw improvements in their FICO® Scores. Now let’s look at whether these consumers’ credit-seeking behavior changed after the delinquency was purged and their score recovered. Were they more likely to apply for credit? Get approved and open new accounts? To assess this, we looked at the proportion of the “delinquency purge” population (those that had a delinquency removed from their credit report between May 2016 and July 2016) that had a new inquiry or opened a new account in the three months following the purge window (August through October 2016). In Figure 1, we compared those values to the same period a year earlier, to avoid capturing seasonal changes in credit habits. The data showed that there was a minor increase in the percentage of consumers that had a... [Read More]
Data breaches are in the news on an almost daily basis and telecom companies are not immune to attack – indeed, cyber-attacks have led to the loss of almost 50 million customer records in the past 10 years. For telecom businesses it’s not only the frequency and number of records that are breached that is of concern, it’s also the type of data that can be lost. Telecom companies are guardians of a rich set of customer data, including financial information. They also hold a valuable set of behavioural data about their customers based on how they use their services. This rich data set is a honey pot for cybercriminals – particularly those using data to fuel identity theft. We included telecommunications providers in the cybersecurity survey carried out on our behalf by independent research company Ovum. What did we find? A full assessment of our findings for the Telco industry... [Read More]
As a result of several recent policy developments, talk of achieving meaningful US financial regulatory reform is getting louder. The passage in the House of the Republican-backed Financial CHOICE Act of 2017 (Choice Act), the ongoing federal agency activity in response to a number of regulatory reform-related Executive Orders by President Trump, and the positive results from the Fed’s annual supervisory stress tests of large banks are examples of efforts that appear to be moving the reform movement forward. Yet formidable political obstacles remain, leading many to ask: What is achievable and what path will regulatory reform follow? Here is my take. A Legislative Solution Is Not on the Horizon … at Least Not Any Time Soon In June, the House adopted, along a party line vote, the Choice Act, which aims to make broad changes to the 2010 Dodd-Frank statute. While Democrats and Republicans have both discussed their willingness... [Read More]
To commemorate the silver jubilee of FICO’s use of artificial intelligence and machine learning, we asked FICO employees a question: What does the future of AI look like? The post below is one of the thought-provoking responses, from Chahm An, a lead analytic scientist at FICO, working in San Diego. Artificial intelligence, like human intelligence, uses observations from the past to learn a general model that can be used to make predictions about future similar occurrences. The future I see for AI is based on current work being done in this field, and grounded in what I saw 20 years ago, when I first began to study AI. What’s Really Accelerating AI? In 1997, and IBM’s Deep Blue had just defeated reigning world champion Garry Kasparov at the game of chess in what was seen as a landmark event of artificial intelligence surpassing a human champion at an intellectual challenge.... [Read More]
FICO regularly tracks the national FICO Score distribution as an important gauge of US consumer credit behavior. When I last blogged about this topic based on data from April 2016, the key takeaway was “the beat goes on.” US consumers continued to show improvement in managing their debts, which began shortly after the bottoming out of the economy in 2009-2010. We have pulled the latest FICO Score distribution information based on a snapshot of millions of US consumers’ credit data as of April 2017, and can report that consumer credit health and responsibility continue to be strong! For the first time since we’ve been tracking these stats, the average national FICO Score reached the 700 threshold — some 10 points above what it was just prior to the recession in October 2006. Let’s dig a little deeper by examining the score distribution over the past 10+ years. The movement in... [Read More]
When it comes to cybersecurity, crooks need a way into our businesses and often someone gives it to them – mostly unintentionally. An understanding of who the unwitting accomplices are will help IT security to protect the organization. In a recent survey conducted for us by research company Ovum, we asked senior security executives which employees or third parties posed the highest cybersecurity risk to their firm. Although 77% of respondents said that their employees have sufficient information on how they can contribute to prevent breaches, internal staff were still perceived to present the biggest threat to cybersecurity. Interestingly, most respondents saw the highest risk as coming from their internal IT function – they highlighted their own departments as the weak link. While most do think they have educated employees well, we had many comments regarding the need for further education programmes. The need to secure employees devices, particularly in... [Read More]
A company that solved an “unsolvable” wind farm optimization problem. An automaker that uses analytics to keep more delinquent customers in their cars. An airline that uses optimization throughout its business to improve customer service and efficiency. These are just some of the past winners of the FICO Decisions Awards – and now it’s time to find the next set of innovators. We’re looking for companies that are achieving outstanding success using FICO analytics and decision management solutions. Awards will be presented in six categories: Artificial Intelligence and Machine Learning Customer Onboarding and Management Debt Management Decision Management Innovation Fraud Control Regulatory Compliance. Winners will receive recognition at FICO World, which will be held April 16-19, 2018, in Miami. Winning implementations will be featured in conference activities, and two representatives of each winning company will receive complimentary conference passes. Nominations are due September 1, and winners will be announced in... [Read More]
We are addicted to our phones from the time we wake up until we go to bed — and apparently, even after that. According to recent reports: One in three UK adults – and half of 18-24 year olds – said they checked their phones in the middle of the night, with instant messaging and social media the most popular activities One in 10 smartphone owners admitted reaching for their phone as soon as they woke up – with a third grabbing the device within five minutes of waking. Given this, the best way to contact a customer is clearly by phone, particularly the smartphone as it has a range of channels available on a single device. This would also be the ideal way to quickly alert a customer to a potential fraudulent transaction. But this raises a critical question: How secure are the channels of communication with each customer?... [Read More]
To commemorate the silver jubilee of FICO’s use of artificial intelligence and machine learning, we asked FICO employees a question: What does the future of AI look like? The post below is one of the thought-provoking responses, from Imran Ali, a senior engineer in our Tools Department, working in Bangalore. “I propose to consider the question, Can machines think?” Artificial intelligence has come a long way since that opening statement was made by A. M. Turing in his seminal 1950 paper Computing Machinery and Intelligence. AI has become very popular because it has metamorphosed from being of theoretical interest to something that is creating value in business. To gain further success, AI has to answer an important question that every business has to answer. Consumers will ask, “You are good at what you do, but should I trust you?” Can I trust you with my money to trade with? Can... [Read More]