FICO Patents 100th Analytic Innovation

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MINNEAPOLIS—December 15, 2010—FICO (NYSE: FICO), the leading provider of analytics and decision management technology, today announced that it has been awarded 8 new patents by the U.S. Patent and Trademark Office, bringing its portfolio total to 100. The breakthroughs covered by these patents are behind FICO’s industry-leading solutions in credit scoring, credit account management, credit fraud management, insurance fraud management and other areas.

Since 1990, FICO’s commitment to research has increased the momentum of its analytics innovations. About one-quarter of the 100 patents were awarded to FICO in 2010 alone.

FICO’s patents span predictive analytics, fraud management, insurance fraud management, business rules and credit technology. They have resulted in the development of a number of products recognized as the leaders in their respective categories, including the following:

  • The FICO® Score — launched in 1989 and continually updated based on FICO’s advances in predictive analytics — is the world’s most used credit score, with more than 10 billion sold each year in 20 countries. The FICO Score is the standard measure of U.S. consumer credit risk, used by lenders, regulators, rating agencies and consumers.
  • FICO™ Falcon® Fraud Manager — based on neural network models and cardholder profiles, protects more than 2 billion bank cards worldwide, and has saved issuers more than $10 billion in the U.S. alone.
  • FICO™ Blaze Advisor® — business rules management system is an industry leader, and includes the most advanced commercially available inference engine, benchmarking more than 300% faster than competing systems.
  • FICO® TRIAD® Customer Manager — used to manage two-thirds of credit card accounts worldwide, and introduced the practice of champion/challenger strategy testing to credit account management.

"Analytics is one of the fastest-growing technology disciplines today, and FICO has pioneered the use of predictive analytics for financial services," said Dr. Andrew Jennings, chief research officer at FICO and head of FICO Labs. "We’ve not only helped our clients make smarter decisions, we’ve helped entire industries operate more profitably and efficiently. The recent growth in our patent portfolio underscores the deep reservoir of potential in our business and demonstrates the creative ingenuity of our people, who are truly at the leading edge of analytics innovation."

“The evolution of analytics has increased its value to the financial services industry,” said Rodney Nelsestuen, senior research director at TowerGroup. “We expect this trend to continue as leading vendors expand and enrich the capabilities of analytics for use in the evaluation of options and choices, causal analysis, and the rapidly growing role of predictive analytics in fact-based decision-making. The crisis of the past three years has clearly demonstrated the need for better intelligence and statistical support in making business decisions. Analytics is now at the center of that more sophisticated approach to running the business of financial services.”

The new patents cover breakthroughs in predictive analytics, fraud detection and business rules management. These patents are for technologies and methodologies that:

  • Compress consumer profiles used in fraud detection, to improve processing while improving fraud detection accuracy
  • Process combinatorial optimization problems, and in particular, co-clustering optimization problems, for applications such as natural language processing and bio-informatics, using so-called “simmered greedy optimization”
  • Provide comprehensive protection from identity fraud with a detection system that uses neural networks to identify potentially fraudulent cases
  • Reconcile multiple interrelated rule sets in a workflow model of a business process
  • Transform large or complex decision trees into compact, optimized representations to ease viewing and interaction by a user
  • Graph trends in massive databases
  • Detect insurance premium fraud or abuse using predictive software
  • Use consistency modeling methodologies to identify potentially fraudulent or abusive activity in healthcare, both by providers and patients.

FICO also has about 120 patent applications pending in the United States and other countries.

About FICO
FICO (NYSE:FICO) transforms business by making every decision count. FICO’s Decision Management solutions combine trusted advice, world-class analytics and innovative applications to give organizations the power to automate, improve and connect decisions across their business. Clients in 80 countries work with FICO to increase customer loyalty and profitability, cut fraud losses, manage credit risk, meet regulatory and competitive demands, and rapidly build market share. FICO also helps millions of individuals manage their credit health through the website.

FICO Statement Concerning Forward-Looking Information
Except for historical information contained herein, the statements contained in this news release that relate to FICO or its business are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the success of the Company’s Decision Management strategy and reengineering initiative, the maintenance of its existing relationships and ability to create new relationships with customers and key alliance partners, its ability to continue to develop new and enhanced products and services, its ability to recruit and retain key technical and managerial personnel, competition, regulatory changes applicable to the use of consumer credit and other data, the failure to realize the anticipated benefits of any acquisitions, continuing material adverse developments in global economic conditions, and other risks described from time to time in FICO’s SEC reports, including its Annual Report on Form 10-K for the year ended September 30, 2010. If any of these risks or uncertainties materializes, FICO’s results could differ materially from its expectations. FICO disclaims any intent or obligation to update these forward-looking statements.

FICO is a trademark or registered trademark of Fair Isaac Corporation in the United States and other countries

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