Reflections on Innovation: 101 AI and Software Patents Granted
We have built a data science organization that prizes creativity and operationalizes innovation for demonstrable business benefit and positive customer impact
As a scientist and a leader of scientists, I know the thing that excites us the most is invention, and learning. Seeing our learnings translated into algorithms and techniques that get expressed in software, and operationalized at customer organizations, is a daily dream come true. Reaching the professional milestone of having 101 software patents granted is a personal pinnacle, too, and one I am proud to have achieved with my data science team at FICO.
So how did I get here?
Growing up in Maine and working through my postgraduate education at Duke University in the 1990s, I was fascinated by Bell Labs, the legendary R&D subsidiary of AT&T. The original Bell Labs was a collaborative environment that brought together scientists, engineers, and mathematicians, all working in an environment designed to encourage serendipitous encounters between experts. Bell Labs scientists invented the first transistors, cellular communication networks, the UNIX operating system and C programming language, and so much more.
Intrigued by physics throughout high school, college, and graduate school, I wanted more than anything to work at an organization like Bell Labs.
From New Mexico to San Diego
But, by the time I earned my Ph.D. degree in Computational and Theoretical Physics in 1998, the Bell Labs of old was not attainable. (It is now a subsidiary of Nokia.) My education journey took me to Los Alamos National Labs, where I was awarded a prestigious Director’s Postgraduate Fellowship. Los Alamos is the country’s premier pioneer of computational physics and AI technologies, national security innovation, and plutonium research – working to extend Oppenheimer's legacy.
While it was a privilege to work with the talented staff scientists and contribute at Los Alamos, I quickly realized I wanted to apply my talent in a way that would more directly benefit people and make their lives better.
When I joined HNC Software, a company that set the stage for San Diego’s vibrant data science and analytics scene, I knew I was home. HNC brought together incredibly smart people who worked collaboratively – exploring concepts, prototypes, and designs, and deploying innovation in an impactful way that is incredibly fulfilling for scientists. HNC data scientists pioneered the most successful and widespread applications of neural networks for fraud detection, and were experts in operationalizing AI in the 1990s! FICO acquired HNC Software in 2002, establishing a San Diego office that today remains the heart of our software data science operation.
Building a Culture of Customer-focused Innovation
I have worked hard to preserve the joy of learning while running FICO’s tremendously talented research organization. We are all constantly learning, pushing, inventing, and working through the hard details necessary to take ideas from academic discourse to a solution, software technique, or product. Equally important, we are driven to operationalize innovation for demonstrable business benefit and positive customer impact, just as I had envisioned while at Los Alamos.
In doing so, FICO’s data science team is intensely focused on solving customer problems like payment fraud, how to deploy AI responsibly, how to expand use of real-time transaction analytics, and how organizations can fundamentally improve the way they make decisions. We’re constantly looking at business problems that don’t have a solution or need a better one.
This hyper-focus on very real problems, and the trust that customers have in FICO as an innovation leader, fuels our company’s patent machine; patents are the ultimate expression of how a concept and idea can transform into technology that is proven, workable, and deployable. We want to show our customers where we’re headed and get their feedback, and one of the best ways to communicate that is through patents. With a patent in place, we can confidently commit the associated innovation onto a software roadmap and deliver it to clients.
Fortunately, the many executives and leaders I’ve worked with during my 25 years at FICO have taken great pride in the innovation our data science team delivers. Today FICO is a recognized as a premier analytic software company in the “Golden Age of AI.”
My Journey to Responsible AI and Beyond
Over my time at HNC and FICO, I have authored nearly 150 patent applications with 101 patents now formally granted, 42 in review pending grant status, and many more in formation with my data science team. My research focus on machine learning algorithms, and AI for specific domains – payment fraud, scams, credit risk, telco solutions, real-time transaction analytics, and blockchain, among many others – has established the basis for how FICO now drives the enterprise operationalization of AI, with FICO Platform.
As the market has moved to complex AI models, FICO has steadfastly held that novel solutions – specifically, intellectual property deployed and operationalized – require us to deeply understand the technology, be able to explain it to customers, and be confident that it works responsibly.
This principle has propelled FICO into Responsible GenAI as we continue to differentiate ourselves by driving responsibility in the traditional AI domain. Here, we are industry leaders in interpretable neural networks, transaction analytics, and AI blockchains. With Responsible GenAI, we are inventing new types of algorithms that deliver the same types of benefits as deep networks and large language models (LLMs) like ChatGPT, through constructs like interpretable neural networks or, more recently, focused language models (FLMs) that are accompanied by GenAI trust scores.
Today, FICO’s organizational wide support for Responsible AI keeps us focused on solving business problems in ways that benefit people, rather than inadvertently harming them. As customer organizations became more proficient with new Responsible AI technologies, we are building not just the best AI and GenAI for FICO Platform, but also providing industry leadership on how AI can be robust, explainable, ethical, and auditable – responsible!
My Most Important Measure of Success
For any data scientist, having the latitude to invent and create solutions that are operationalized and deployed is super important. Building a data science organization that prizes creativity is what makes me happiest. Every single day we’re learning from each other, keeping customers at the forefront.
To me, attracting and retaining a phenomenal data science team at FICO’s very own “Bell Labs” is the accomplishment I find most rewarding. My joy in looking over the list of 101 granted patents is having had the opportunity to work with 65 different co-inventors. This list is long, but the top three co-inventors are Shafi Rahman, Matt Kennel and Joe Murray. All of us continue to work side by side on AI innovation development, exploring new frontiers to keep FICO at the forefront of AI-powered software solutions.
How FICO Can Help You with Responsible AI
- Learn more at FICO® Responsible AI
- Download our AI Playbook: A Step-by-Step Guide for Achieving Responsible AI
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<p>FICO’s latest research on <a href="http://www.fico.com/en/blogs/risk-compliance/us-credit-quality-rising-the-beat-goes-on/" target="_blank">national FICO® Score distribution</a> shows that US credit quality continues to trend upwards, with an increasing number of consumers scoring in the highest scores ranges. Given that, we decided it was time to refresh our study on “<a href="http://www.fico.com/en/blogs/risk-compliance/infographic-what-does-a-high-credit-scorer-look-like/" target="_blank">FICO® Score high achievers</a>,” where we examine the credit behavioural profiles of consumers with higher credit scores.</p> <p>As expected, our latest study showed that older people generally have higher scores, as has been the case in our <a href="http://www.fico.com/en/blogs/risk-compliance/age-before-beauty-credit-worthiness-before-youth/" target="_blank">past research</a>. 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I further broke this down by looking at the characteristics of the youngest 15% in each group, which occurs at age 29 for the 750-799 group and 43 for the 800-850. We used FICO<strong>®</strong> Score 9 for our analysis, and examined typical variables of the categories that go into the make-up of the score.</p> <p><a href="http://www.fico.com/en/blogs/wp-content/uploads/2016/10/FICO-Score-High-Achiever-table.png"><img class="alignnone size-full wp-image-29367" src="http://www.fico.com/en/blogs/wp-content/uploads/2016/10/FICO-Score-High-Achiever-table.png" alt="fico-score-high-achiever-table" width="715" height="747" /></a></p> <p>Since there’s a lot to dissect in this chart, I’ll highlight a few findings that struck me: <ul> <li><strong>Credit history.</strong> Higher scores are undoubtedly associated with a longer time on file. What’s striking is the higher average time on file for the 800+ group, both overall and for revolving accounts (the most common trade line). Clearly, it helps to start credit use early in life – but that’s not the sole determining factor for high scoring. The younger cohorts in both the 800+ and 750-799 groups have time on file medians significantly less than their older counterparts.</li> <li><strong>New credit.</strong> High credit scorers do, in fact, pursue new credit. We see little variation in months since last trade line opening and last inquiry among all groups observed.</li> <li><strong>Pay on time.</strong> As you might expect, the further in the past the delinquency, the higher the score – and that’s <u>if</u> a delinquency ever happened. 95% of the 800+ people and 72% of the 750-799 group have never been delinquent, which is a striking contrast to the 57% for the total population. The percentages for the younger groups are even higher, especially so for the 750-799ers. Collection items are also scarce for these high scorers. While 23% of the national population have collection items greater than $99, the figures are only 0.5% for the 800+ group and 3% for the 750-799 group. It is clear that, in conjunction with starting a credit file early, paying on time is a key trait of the FICO® Score high achiever.</li> <li><strong>Balance and utilization.</strong> Finally, we look at how credit is being used, focusing on revolving product use. (Since most people only have one mortgage or one auto loan, variation in instalment product figures is minimal and driven by payment history, which is near perfect for high scorers, as we’ve seen.) FICO® Score high achievers tend to have more open revolving accounts. While the % active trades and utilization are generally lower, by no means do high scorers avoid the use of credit products. What drives the difference here is the amount of <u>available</u> revolving credit utilized. The 800+ group is roughly 1/4 of the national median, both in total and on their highest utilized card; they also have lower balances and more cards<em>. </em>The 750-799 group is more active and higher utilized, but still only at 2/3 of the national figures. The young 750-799 group compensate with lower revolving balances and, as a result, lower utilization, which is in line with what we see for the 800+ group.</li> <li><strong>Benchmarks.</strong> I’d like to point out that while this study provides good benchmarks of the typical credit traits of the FICO® Score high achiever, individual credit profiles will vary widely. And keep in mind that when we sort groups of consumers as a whole by different behaviours, some results may look superficially odd. For example, the 800+ band has a longer median average open account time (128 months) than average revolving months on file (140 months).</li> </ul> So, what do we conclude? A huge takeaway is that high scorers don’t have too much in the way of serious delinquencies and negative public record data.</p> <p>In most respects, the young 800+ people are like their peer group. They really only differ markedly in their shorter credit history and higher non-mortgage balance, both of which are a function of life stage. Our results show that you don’t have to be a credit product hermit; these high scorers have more credit cards. The takeaway is to start credit activity early and maintain well-managed and moderate usage.</p> <p>In many ways, the young 750-799 people are more interesting because their age profile is much younger. Their credit characteristics differ more from their peer group, particularly in terms of length of credit history. They compensate by having almost pristine credit records and lower balances.</p> <p>Ultimately, 39% of US consumers are FICO® Score high achievers, which they accomplish by following common-sense credit practices. It ain’t rocket science!</p>
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