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 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 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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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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