Tag Archives: AI

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]

Leave a comment

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]

Leave a comment

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]

Leave a comment

Fraud & Security The Story Behind Europe’s €1.8 Billion Card Fraud Problem

Jun292017

FICO has just released an interactive infographic on European card fraud trends since 2006, showing that card fraud in the 19 countries studied has hit a new high of €1.8 billion. In the UK, card fraud also a hit a new high in 2016, £618 million, though the rise was less than the rise from 2014 to 2015. To understand what these numbers mean — and what issuers need to do now — it’s important to know how got here. That’s why our map tracks the data back to 2006. Why is 2006 so important? That was the year of ‘love my PIN day on Valentine’s day’ in the UK, as the liability shift between magnetic stripe and chip & PIN technology had been put in place during 2005. So chip & PIN was officially rolled out across Europe and executives expected to see the benefits of that investment in... [Read More]

Leave a comment

Risk & Compliance AI Spotlight: FICO’s Machine Learning Facilitates AML

Brain with AML highlihgted in neural pathways
Jun222017

This is a guest post from Nikola Marcich with the Policy team at the Software & Information Industry Association (SIIA), the principal trade association for the software and digital content industry. Walking into Bernie Madoff’s home in 2005, you would not have found piles of money under a mattress, behind a sofa or in his garage. At the time, Madoff had been running an elaborate Ponzi scheme through the wealth management arm of his business that reached $65 million by the time of his arrest in 2008, deliberately hiding the money intricately within the financial system. Serving as Madoff’s primary bank for over two decades, JP Morgan was one of the culprits of Madoff’s fraudulent actions and money-laundering tactics. In their innocent incompetence to identify clear red flags about Madoff’s returns and file a Suspicious Activity Report (SAR), JP Morgan’s was fined $1.7 billion in 2014. JP Morgan’s fine highlights the... [Read More]

Leave a comment

Analytics & Optimization Explainable AI Breaks Out of the Black Box

Box stamped AI
May312017

Over the last 12 months or so there’s been incredible excitement about artificial intelligence and all of the amazing things it can do for us—everything from driving cars to making pizza (super-cool video!). But — and this is a big “but” — artificial intelligence comes with many challenges, including trying to decipher what these models have learned, and thus their decision criteria. In my last post, I discussed how regulations such as Europe’s General Data Protection Regulation will demand Explainable AI. This is a field of science that attempts to remove the black box and deliver AI performance while also providing an explanation as to the “how” and “why” a model derives its decisions. DARPA says Explainable AI or XAI: Produces more explainable models, while maintaining a high level of learning performance (prediction accuracy); and Enables human users to understand, appropriately trust, and effectively manage the emerging generation of artificially intelligent partners. Three Ways... [Read More]

Leave a comment

Analytics & Optimization GDPR and Other Regulations Demand Explainable AI

Box stamped AI
May242017

The General Data Protection Regulation (GDPR) is a wide-ranging and complex regulation intended to strengthen and unify data protection for all individuals within the European Union (EU). A year ago I blogged about the data governance ramifications of GDPR, and in this blog I’ll focus on another facet of GDPR to talk about a related analytics topic: explainable artificial intelligence (AI). First, let’s start with GDPR. Article 22 of GDPR, “Automated individual decision-making, including profiling,” concerns the use of data in decision-making that affects individuals, such as a person applying for a loan. The regulation says: “1. The data subject shall have the right not to be subject to a decision based solely on automated processing, including profiling, which produces legal effects concerning him or her or similarly significantly affects him or her.” Point 2 of Article 22 describes exclusions (including situations involving the person’s explicit consent, such as applying... [Read More]

Leave a comment

Risk & Compliance How to Build Credit Risk Models Using AI and Machine Learning

boxing poster with machine learning vs scorecard modeling
Apr062017

Which works better for modeling credit risk: traditional scorecards or artificial intelligence and machine learning? Given the excitement around AI today, this question is inevitable. It’s also a bit silly. While some new market entrants may have a vested interest in pushing AI solutions, the fact is that traditional scorecard methods and AI bring different advantages to credit risk modeling — if you know how to use them together. Take, for example, our new credit decisioning solution, FICO Origination Manager Essentials – Small Business. It’s designed to help lenders make faster origination decisions without increasing risk. This new FICO product combines our well-established scorecard technology with AI to build better credit risk models. How FICO Uses AI to Build Better Credit Risk Models As with our other origination products, Origination Manager Essentials includes credit risk models, and these models are segmented — different types of small business customers and different... [Read More]

Leave a comment

Analytics & Optimization Rise of the (IoT) Machines: When Do We Say “Enough”?

Image from Terminator: Rise of the Machines
Mar012017

Make no mistake about it, I am a technology-loving kind of guy. My job is all about helping people to make better business decisions using analytics technology, and I have boundless enthusiasm for speaking with FICO customers, data scientists and students about the power of behavioral analytics, artificial intelligence and machine learning. But when it comes to my personal life, I’m a bit of a contrarian. There’s been a lot of news about studies showing how too much smartphone use, or too much time on social media, can have a stressing, depressing effect. So I purposefully limit my phone use and I’m not even on Facebook, Instagram, Snapchat, et al. (Although I do love using Twitter as part of my work, to connect with followers all over the world!) How technology can rob joy As the Internet of Things (IoT) matures, I feel like a similar trajectory is starting to... [Read More]

Leave a comment

Fraud & Security AI Meets AML: How the Analytics Work

Brain with AML highlihgted in neural pathways
Feb152017

The focus on financial crime, and the money laundering that funds terrorist attacks and other criminal activities, has forced the industry to look for smarter approaches. In the previous posts in this mini-series, TJ Horan noted that AI is the newest hope for compliance, and Frank Holzenthal explored the benefits that AI can bring to compliance officers. Now it’s my turn, and I’m going to explore the AI and machine learning technologies my team has integrated into the FICO TONBELLER Anti-Financial Crime Solutions. We have built on top of the FICO TONBELLER solutions using FICO’s battle-proven and patented artificial intelligence and machine-learning algorithms, which are used in FICO Falcon Fraud Manager to protect about two-thirds of the world’s payment card transactions. Industry experts have begun to realize the significance of analytics in combatting anti-money laundering. For instance, Aite Group LLC in its 2015 report Global AML Vendor Evaluation noted that... [Read More]

Leave a comment