Category Archives: Analytics & Optimization

Analytics & Optimization The Future of AI: Smart Machines Will Save Us, Not Destroy Us

FICO 25 years of AI and machine learning logo
Aug162017

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 Shafi Rahman, a principal scientist at FICO, working in Bangalore. The most memorable scene in the film 2001: A Space Odyssey is when HAL 3000 turns off the life-support functions of the crew in an attempt to keep itself from getting disconnected. This was my first encounter with what we call artificial intelligence. Then in Terminator, we were introduced to Skynet, a neural network based AI, which raised an army of robots for self-preservation. Hollywood has always portrayed the future of AI in a dystopian, cataclysmic manner. In reality, I believe things will be different — benign and beneficial to the human-kind. In the last 10 years, we have seen huge revival... [Read More]

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Analytics & Optimization Why We Need Explainable AI (Video)

Box stamped AI
Aug152017

As artificial intelligence reaches new areas such as risk management in banking, explainable AI will become more important. That’s the message FICO’s Derek Dempsey gives in a video interview recorded with Compare the Cloud. Derek, a principal consultant with Fair Isaac Advisors who was named one of the Big Data 100 by DataIQ magazine in 2015, discusses the impact AI and machine learning have had in fraud detection, and the growing use in financial services. Risk management has greater requirements for explaining decisions, Derek says, and this will force AI developers to think differently. For more on this topic, read Scott Zoldi’s blog posts on explainable AI. Watch the video on Compare the Cloud

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Analytics & Optimization Modelling Deposit Price Elasticity: What Data Do You Need?

Analytics on screen
Aug142017

This is the second in a series of blog posts on deposit price elasticity, focusing on the modelling data requirements. There are several different modelling techniques and approaches to measure deposit price elasticity, which is dependent on the actual business problem and model usage. The exact data requirements might need to be amended to account for the modelling technique, but a large number of data items are consistent across all approaches. As with all modelling projects, it is good to initially take a step back and think about what type of information you would expect to be predictive, impact deposit price elasticity, and make you move your savings across different products and / or financial institutions. We would suggest that considering the below fields would be best practice for a deposit price elasticity model development: Product details: Historical interest rate of the product(s) to be modelled, this would include retention... [Read More]

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Analytics & Optimization AI – What Chief Compliance Officers Care About

AI conference logo
Aug092017

Arguably, there are more financial institutions located in the New York metropolitan area than anywhere else on the planet, so it was only fitting for a conference on AI, Technology Innovation & Compliance to be held in NYC – at the storied Princeton Club, no less. A few weeks ago I had the pleasure of speaking at this one-day conference, and found the attendees’ receptivity to artificial intelligence (AI), and creativity in applying it, to be inspiring and energizing. Here’s what I learned. CCOs Want AI Choices As you might expect, the Chief Compliance Officers (CCOs) attending the AI conference were extremely interested in applying artificial intelligence to their business, whether in the form of machine learning models, natural language processing or robotic process automation – or all three. These CCOs already had a good understanding of AI in the context of compliance, knowing that: Working the sets of rules... [Read More]

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Analytics & Optimization Three Keys to Advancing your Digital Transformation

Digital assets
Aug082017

With today’s proliferation of data, digital transformation (DX) has become more than a hot topic: It’s an imperative for businesses of all shapes and sizes. The collision of data, analytics and technology has businesses, analysts and consumers excited — and scared — about what could happen next. On one hand, everyone from banks to bagel shops and travel sites to tractor manufacturers have found new ways to connect the dots in their businesses while forging stronger, more dynamic customer engagement. Artificial intelligence (AI) has come of age in technologies such as smart sensors, robotic arms, and devices that can turn lights and heat on and off, adjust for changes in conditions and preferences, and even automatically reorder food and supplies for us. However, today’s Chief Analytics Officer (and Chief Data Officer and Chief Digital Officer, for example) faces both the promise and precariousness of digitizing business. While significant opportunities abound... [Read More]

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Analytics & Optimization The Future of AI: Redefining How We Imagine

FICO 25 years of AI and machine learning logo
Aug012017

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 Sadat Nazrul, an analytic scientist at FICO, working in San Diego. Looking at the next 20 years, I see us moving well beyond the productivity enhancements AI has brought about so far. With the advent of AI, we will be seeing a renaissance in our own personal lives as well as society as a whole. Healthcare Today, our gadgets have the ability to monitor the number of steps we take, the rate of our heart beat, as well as the contents of our sweat. All this rich information allows a team of doctors, engineers and analysts to monitor our well-being and to maintain our peak performance. Similarly, with innovations in genomic sequencing... [Read More]

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Analytics & Optimization Modeling Deposit Price Elasticity: What Is It All About?

Chart showing components of FICO deposit price optimization solution
Jul312017

Many top financial institutions have begun using predictive modelling and optimization to improve deposit pricing. This requires an understanding of customers’ deposit price elasticity — how sensitive are they to pricing changes, and what is the relationship between price and demand at the customer, segment and portfolio level? I’m going to explore this topic in a series of posts, which should be useful both to deposit portfolio managers and analytics teams. To start with, let’s look at the basics. Price elasticity is the study of responsiveness, and how the demand of a product changes with respect to price (and/or the price of competitors). Understanding deposit price elasticity, or having models that predict this, means you can quantify: Impact of a product’s price change on the deposit product How competitor price changes impact a deposit portfolio Impact of changing macro-economic conditions, such as a change in central bank lending rate How... [Read More]

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Analytics & Optimization The Future of AI: Meet the Multi-Tasking Machines

FICO 25 years of AI and machine learning logo
Jul112017

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]

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Analytics & Optimization Analytics Achievers Wanted for FICO Decisions Awards

FICO Decisions Awards logo
Jul052017

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]

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Analytics & Optimization The Future of AI: It’s Good, But Should We Trust It?

FICO 25 years of AI and machine learning logo
Jul032017

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]

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