Tag Archives: Artificial Intelligence

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 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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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]

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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]

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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]

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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]

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Fraud & Security AI Meets AML: How Smart Analytics Fight Money Laundering

Brain with AML highlihgted in neural pathways
Feb132017

In the last six months alone, I think I’ve read at least 1,000 Wall Street Journal articles on artificial intelligence (AI) and its technologic cousins: robots, drones and self-driving cars. Between those three things, I’m pretty sure most of the jobs humans have today will change. Some will even disappear. There is so much noise about AI and its ilk that, in my opinion, it’s important for us in the worlds of fraud and compliance to take a step back and focus on how we can implement this incredibly advanced technology in the context of our current technology and regulatory environment. For example, while it’s pretty cool how AI is now being leveraged to play poker and beat professionals in real games, it’s a distraction from the discussion of ways that AI can help right now, today, for real business challenges. One of the places where AI can make a... [Read More]

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Analytics & Optimization 4 Analytic Predictions for 2017 – From Killer Devices to AI Hype

Hand holding analytics
Nov302016

In many ways I think 2016 was the year that analytics hit the mainstream. At cocktail parties and in coffee shops, 2016 has been the year that we data scientists suddenly felt a bit like – dare I say it? – rock stars. A quick Google search provides a fascinating data point: “analytics 2015” returned 28.6 million hits “analytics 2016” returned 52.3 million hits Suffice it to say that in 2017, I believe that analytics, and the many domains it influences, will be a non-stop hit machine in terms of generating news headlines and ideas that fascinate us. Here are my predictions: 1. Security/IoT: Is your video cam no longer your friend?  In light of the recent Dyn attack, will 2017 be the year that your IoT device will turn on you? (Think Westworld, Humans, Terminator.) I think the answer is “yes.” In my recent blog, “Real talk: The imminent and... [Read More]

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Analytics & Optimization Artificial Intelligence: Find it Right in Your Own Backyard

Scene from The Wizard of Oz
Oct262016

It seems like you can’t spend more than a minute or two reviewing online articles or social media without stumbling on something about artificial intelligence (AI) or machine learning. It’s the hottest thing since the iPhone. But while AI is heralded as amazing new technology, it is in fact an amazing 30+-year-old, proven technology. Like Dorothy in the “Wizard of Oz,” you don’t really have to look much further than your own backyard to find AI––specifically, in your own wallet, mobile or otherwise. Machine learning and AI are a prominent part of banking and processing payment cards, not just reserved for self-driving cars and computers that can win at Jeopardy. In banking, machine learning not only improves predictions, it is effective for improving subsequent decisions. Machine learning has a presence in many of our analytic models at FICO that are widely used in the financial industry. Here are a few... [Read More]

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Analytics & Optimization Four Analytic Breakthroughs That Are Driving Smarter Decisions

Hand holding analytics
May262016

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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