Analytics & Optimization Four Analytic Breakthroughs That Are Driving Smarter Decisions

Hand holding analytics

Patents are the currency of innovation, in software or any other industry. At FICO World 2016 in April, I explored how four patents we have recently been granted will enrich FICO’s product portfolio and, in turn, your business. Collaborative Profiling From cybersecurity, to payment card fraud, to marketing, companies want answers to the question, “How do we know when someone’s behavior has changed in a significant way?” And subsequently, “How do we rank those changes to focus on the most important cases?” FICO’s recent patent on Collaborative Profiling and change-point detection provides an efficient new way to answer these questions. By distilling behaviors from a large group down to a few basic “archetypes” of behavior, we can effectively determine which persons have the biggest changes in archetype mixtures. That’s a powerful capability that can also help marketers to better understand changing customer preferences. Structuring IoT Messages For the past few years... [Read More]

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Fraud & Security How to Avoid Fraud Scams at the ATM

ATM with Hacked stamp

The recent spike in ATM compromises and fraud in the US reminds us that something we do all the time — getting cash from a cash machine — can be risky business. However, with so many different types of banks and ATMs, it can be challenging to decipher what is cause for concern and what is just a trustworthy ATM. Here are four signs that an ATM has been tampered with: 1. It looks different — perhaps it has an unfamiliar layout or appears much newer or shinier than the same bank’s ATMs next to it. Criminals are adept at placing card or cash capture devices and PIN compromise devices in or around ATMs to get quick access to consumer funds. Some even install entire false fronts to ATMs to capture people’s PINs and money. These are often so well disguised that they can be extremely difficult to detect, so... [Read More]

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Fraud & Security Bloomberg TV Malaysia Video: Dealing with Cyberheists and Financial Crimes

Bloomberg Malaysia Video Financial Crime 1

In an interview with Bloomberg TV Malaysia, FICO’s Subhashish Bose talks about the recent cyberheist of the Bangladesh central bank where criminals routed stolen funds to a casino in the Philippines as a way to launder money. He explains that rules and policy are important but meaningless if organizations aren’t following them or they aren’t enforced. Bose also emphasizes that cross-border fraud is a problem because criminals look for the weakest links and try to exploit them. Bose says this makes the FATF (Financial Action Task Force) frameworks and recommendations especially important. Adopting a risk-based approach to certain types of transactions ensures banks are able to better manage and more closely monitor suspect dealings. Click on the image above to view the video or view it here.

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Customer Engagement Are You on the Right Path to Customer Experience Maturity?

Customer Experience Maturity Path - Featured Blog

In my last post, I discussed the eight disciplines critical for companies looking to improve their maturity in managing customer experience. With increased maturity comes a sustainable competitive advantage that is hard to duplicate. But it’s important to note that no company will excel in all eight disciplines, even top performers like Zappos and Disney. To lead in an industry, you only need to mature to a greater degree (and preferably earlier) than your competitors. One thing that can inhibit or promote the speed of a company’s maturity is the path taken. This path determines the disciplines in which they focus their energy, and the priority they put on these disciplines. And, unfortunately, there are no shortcuts. The diagram below is the order prescribed by FICO to optimize a company’s use of time and resources to increase maturity, based what works – and what does not work – with our... [Read More]

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Fraud & Security Meet the Cyber Score – FICO and iboss Team to Cut “Dwell Time”

iboss and FICO logos

For years, every time I’ve told someone I work at FICO, their first response has been, “FICO? The credit score company?” And I say “yes,” although I am focused on other parts of the business such as fraud detection, network continuity assurance, marketing predictions and many more. But creation of predictive scores? That’s where FICO’s predictive analytics excel. We recently announced a new domain that will benefit from our scoring expertise: cybersecurity, teaming with iboss Cybersecurity. Our partnership will bring FICO artificial intelligence (AI) analytics to the iboss web security platform, creating the first cyber threat score that measures the likelihood of malware infection, phishing attacks, insider threats and data breaches. Through the cyber threat scores, FICO and iboss customers will now be able to more accurately quantify cyber threats and remediate them in real-time, to stop catastrophic infection and data loss before it occurs. Quantifying threats is an enormous... [Read More]

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Analytics & Optimization Decision Fundamentals: Capturing Subject Matter Expertise

Man drawing a chart

Last month at FICO World 2016 in Washington, DC, I had the pleasure of delivering a keynote address. Over the past few years of working with customers in a wide variety of industries and business challenges, we at FICO have uncovered the following five critical areas where organizations need to improve their operational decision making to help reduce complexity and create competitive advantage: 1. Capturing subject matter expertise 2. Intelligent solution creation 3. Faster insight to execution 4. Building institutional memory 5. Greater analytic accessibility Over the next few weeks I’ll blog about each of these principles, starting here with the most basic tenet of decision management: capturing subject matter expertise. Capturing Subject Matter Expertise From decades of experience in working with customers around the world, FICO has learned that the codification of operational and solution-specific knowledge—by gathering and writing down subject matter experts’ experience on the decision process—is critical, yet at most companies is sorely... [Read More]

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Risk & Compliance Will Fintech Risk Models Have “Unintended Consequences”?

Crystal ball

Last month the President of the San Francisco Federal Reserve Bank addressed the LendIt USA conference here in San Francisco. He talked about “unintended consequences” and the role regulators play in protecting wider economic interests. “I am excited for the changes to come, and I see the potency of the possible,” said John C. Williams. “But for fintech’s potential to be met, we need to make sure we don’t reinvent or exacerbate shortcomings that have plagued our financial system thus far. In that regard, well-designed regulation protects consumers, fosters inclusionary rather than exclusionary practices and enhances fairness and resilience of the financial system should help rather than hinder fintech’s contribution.” Since that speech, trouble with marketplace lenders such as Lending Club has led many in the industry to say the fintech bubble is bursting. Whether or not that turns out to be the case, it’s worth exploring this issue: What... [Read More]

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Customer Engagement Video: Unlocking Deposit Account Profitability

Video - deposit account profitability

Are retail banks overlooking deposit accounts? Many may be missing out on higher profits and improved customer satisfaction because they aren’t taking the right analytic approach to the challenges they face—most notably, a complex regulatory compliance landscape and more competitive market environment. For many institutions, inconsistent fee waiver, or hold policies, are leading to higher customer attrition and missed profits. But with the right analytic tools and approach, these issues can be overcome to make deposit accounts more rewarding. In this video, Bruno Courbage, senior director at FICO, shares five ways that predictive analytics improve the decision-making process to unlock the profitability of your deposit accounts.

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Analytics & Optimization Video: FICO CTO Explores Solving the Global Productivity Crisis

Stuart Well at FICO World 2016

Missed FICO World 2016? Then you won’t want to miss this video of the FICO World keynote from Stuart Wells, FICO’s chief technology and products officer. Wells explained that after 50 years of technological innovation, we’re facing a global productivity crisis, with complexity – from regulation, security threats, competition and failed Big Data deployments – choking performance. Per Wells, these challenges call for an overhaul of the way businesses approach decisions, and he outlined what such an approach would look like.

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Collections & Recovery Toyota FS Wins InformationWeek “Best in Analytics” Award

Toyota and InformationWeek logos

“Analytics is all about making decisions. Focus on what decisions you have to make and what actions you have to take rather than starting with data or systems.” That’s what Jim Bander, national manager of decision science at Toyota Financial Services, told InformationWeek. And he knows what he’s talking about — Toyota FS just won the InformationWeek Elite 100 award for Best in Analytics for their work on optimization that keeps customers in their cars. (As someone who owns three Toyota Highlanders, I have a personal stake in this story.) This groundbreaking project received the FICO Decision Management Award for Debt Management last year. We are proud of our part in helping TFS on their Collections Treatment Optimization project, which scored this prestigious award from InformationWeek. The metrics Toyota Financial Services uses to measure success illustrate their commitment to their customers. As the article notes, “In the first year 1,600... [Read More]

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