Tag Archives: Adaptive Control

Customer Engagement Analytics That Fuel Loyalty – A Client Success Story

Grocery loyalty image

We’ve been blogging about a Canadian grocer that is changing the game with its analytics-driven loyalty program. For its +9 million loyalty members, personalized offers are so relevant, it’s almost like having an old-fashioned relationship with the corner grocer. In this new-fashioned relationship, however, members can redeem their offers at more than a thousand stores of various types, in many locations across Canada. What’s this grocer’s secret to success? Here’s a peek inside the analytics. Understanding customers as more than strings of transactions Delivering a personally unique set of relevant offers every week on such massive scale is a computationally demanding, mathematically intense undertaking. The heavy lifting is performed by over 4,000 time-to-event (TTE) predictive models, generated and updated every four months by a FICO-built analytic “factory.” Each TTE model predicts the propensity of a customer to purchase a particular product — say, a specific brand of laundry detergent —... [Read More]

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Customer Engagement Making the Right Decision … How Sweet It Is


I wonder how many bad decisions were simply the result of a poor environment. For instance, Mars Inc. infamously turned down Universal’s offer to have M&M’s be the candy of choice for the alien in the movie E.T. the Extra-Terrestrial. As a result, Universal turned to Hershey Food Corporation, who gladly offered up their previously struggling brand, Reese’s Pieces, and experienced an explosion in sales from product placement within one of the most popular movies of all time. Legend has it that Mars was uncomfortable with being associated with aliens, and/or didn’t think much of an often upsetting tale centered on a lonely boy and his single mother. But what if Mars simply had hit its advertising budget limit for the year? Or what if, on the day Universal made their pitch, it was hot and uncomfortable, and the Mars executives were tired and impatient? The point is, it’s just... [Read More]

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Analytics & Optimization From Credit Scoring to Cloud Analytics: A Video History of FICO


As we wrap up 2015, it’s hard not to feel nostalgic. Join us for a stroll down predictive analytics memory lane in this video history of FICO, where we explore key milestones in areas from credit scoring to fraud management to cloud-based decision management. It’s hard to believe it all started in 1956 when Bill Fair and Earl Isaac founded a company in a San Francisco apartment, utilizing a borrowed computer and an investment of $400 each. Now that we’ve taken a look back, let’s look ahead to next year. For 2016 trends and predictions, check out recent posts from FICO bloggers: “5 Predictions for 2016: The Year of Prescriptive Analytics” by Scott Zoldi “The 2016 Road Ahead: Top Banking Trends and Challenges” by Andrew Jennings Feel free to share your own 2016 predictions in our comments section below. And check back in early January when our regulatory blogger Daniel... [Read More]

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Collections & Recovery Collections 101: Try Before You Buy

Collections chalkboard

If your collections operation is like most of the ones I visit, you’ve refined your techniques and strategies over years. From your segmentation of accounts to the tactics you take, you know what works and you stick with it. That seems like a sensible approach. But I’m going to propose something different. Why? Because no matter how good things are working for you today, it’s always possible that you’re missing a trick. And let’s face it — nobody’s business is running perfectly. Everyone’s trying to squeeze a few more dollars out of the same team and systems. The only way to find out if something different will work better is to try a change before you “buy” it — that is, before you make your whole group change to something that might be less profitable. In banking, this test-and-learn process is called adaptive control, controlled testing or champion / challenger... [Read More]

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Risk & Compliance Good News and Bad News on UK Student Credit Cards

UK Student Cards Chart

Here’s the good news: Our latest figures on UK credit cards from the FICO® Benchmark Reporting Service show that the percentage of student card accounts that have two-cycle balances reached a two-year low in May 2014, before rising slightly in June.

Now, here’s the bad news: Average two-cycle balances on student cards are going up. Having fallen from £533 in June 2012 to £521 a year later, they have now hit £733, a 40 percent increase in just one year.

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Analytics & Optimization The New Face of Uncertainty


-- Posted by Carole-Ann I have been quite busy in the past few weeks briefing industry analysts on the discipline of Decision Modeling and Optimization.  We learn decision modeling at school of course but it seems quite under-exploited in the enterprise. Industries such as Financial Services are gurus in the domain.  They model and test and tweak and improve their models before making decisions.  Technology has evolved to serve the needs of Risk personnel or Portfolio managers. It is quite amazing when you think of it, how little other industries take advantage of those proven techniques and supporting technologies. My discussion with Jim Sinur at Gartner was incredibly insightful.  With the major effort Gartner put into developing and publicizing the Pattern-based Strategies research, they are ahead of the curve.  The have thought it through and can better articulate it than most.  I recommend Jim's recent post on BPM and Business Rules: It’s not Just About Agility.  He is definitely spot on.  I also added...

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Analytics & Optimization CEP a Predictive Modeling facility? Myth!


-- Posted by Carole-Ann Despite my efforts to simplify the Decision Management picture, especially as it relates to CEP, BRMS and BPM, it seems that the CEP buzzword turned into an omnipotent ruler of the Decision Management world, at least in some discussions... I have been exchanging a few tweets these past couple of days on this very subject with John Rymer, Mike Gualtieri and a few others.  It became eventually clear that 140 characters were not enough...Is CEP the best solution for predicting future behavior?That's pretty much what got me started on this Twitter thread...  My first reaction was amazement and incredulity.  Why would anyone think that????I am not going to go into the Predictive Modeling basics here.  In order to create a predictive model, you need data.  This seems to be generally admitted.  In order to assemble a good data sample you need to put in place some mechanism to collect this data from your applications.  CEP is one of the techniques being used to collect.  This is not the only one...

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Analytics & Optimization Live from InterAct – preshow tutorials


-- Posted by Carole-Ann We flew into NY on Monday.  After what seemed a long day of internal meetings and presentation rehearsals, we started the show in the afternoon with our tutorial.  I was part of the "Operationalizing Analytics" track. Scott Horwitz talked about the how Insurance companies can benefit from Business Rules, Decision Simulation, Predictive Analytics and Decision Optimization.  If you have been reading this blog, these should not be new concepts to say the least.  It was good though to engage the crowd on their current practices. I was responsible for the Decision Simulator part and demo.  It was refreshing to see heads nodding when I talked about existing customers' experiences. Horia finally showed a demo on Decision Optimization.  Customers had lots of questions on regulatory compliance.  I anticipate that we will get more and more compliance questions over time, especially as the Obama Administration defines new rules for the Insurance business. Before the Welcome reception,...

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Analytics & Optimization Now introducing Decision Simulation


-- Posted by Carole-Ann Et voila! We are now delivering Decision Simulation to the BRMS world.  What an exciting day! Let me give you some insight as to what that means in reality.  Up to now, the industry has been focusing on what we call "validation" capabilities.  Validation is about running your business rules against test cases, sometimes historical data, and assess how it compares to expected values.  You end up with a listing of pass versus fail transactions.  Typically you just care about the discrepancies (what failed). Decision Simulation is a key component of the Decision Improvement loop I always talk about because it offers a real alternative to Business Users.  Why do they need an alternative?  Because validation tells them IF the new business rules (I often call it a strategy) are what you expected them to be, it does not tell you HOW they will perform, in business terms of course. In the world we live in now, we cannot afford to make sub-standard decisions out there.  If you...

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Analytics & Optimization Will Data Drive Decision Improvement?


-- Posted by Carole-Ann In the past few weeks I have been briefing our internal teams, external customers and industry analysts on our Decision Improvement capabilities.  One of the topics that was the most foreign to the BRMS addicts was Data Management, although it is one critical piece of Decision Improvement. Let me set the stage here.  Decision Management covers obviously Decision Automation, with a particular emphasis on Business Rules, Predictive Analytics and Transactional Optimization.  The idea is to combine a set of decisioning technologies to make decisions in your Production systems.  Decision Improvement is the discipline of analyzing those decisions that are made day in and day out, and explore if and how those decisions could become more profitable, efficient, safe, etc. Very soon you will hear a lot more along those lines with Decision Simulation capabilities that will complement other techniques such as Decision Modeling and Decision Optimization that have been applied very successfully in Financial Services (sub-prime...

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