SAN JOSE, Calif. — April 27, 2016
- FICO CEO Will Lansing sees choppy waters ahead for fintech startups, and exciting opportunities for forward-thinking established players
- FICO CTO Stuart Wells says businesses need to focus on decisions, not data
- Behavioral economist Dan Ariely says businesses must understand how customers behave, which is often irrational
- FICO World 2016 opened in Washington, DC
The future of how businesses and individuals make decisions was explored from multiple angles in the opening keynote addresses at FICO® World 2016, the Decisions Conference, which runs through April 29 in Washington, DC. More than 900 attendees from 54 countries heard FICO’s leadership and guest presenter Dan Ariely discuss how businesses can improve the way they make decisions through sharper predictions of individual behavior.
“Fintech is riding a wave of optimism right now, but it remains to be seen how tightening capital markets and other macroeconomic factors will affect new companies and their business models,” said FICO CEO Will Lansing. “We believe the biggest rewards will go to businesses focused on improving risk management and making credit more accessible to everyone, worldwide, who needs it and can handle it responsibly.”
Lansing discussed FICO’s analytic approaches to incorporate more data sources into risk measures such as the FICO® Score, the standard measure of US consumer credit risk.
“So-called alternative data for underwriting isn’t an alternative at all — it’s an addition,” Lansing said. “To measure a person’s credit risk, you can’t ignore their credit history, which is the single most predictive factor. Our approach blends this proven data while adding the power of other data sources, such as rental history and utility payments, to help lenders extend credit to more people responsibly and profitably.”
Stuart Wells, FICO’s chief technology and products officer, raised the issue of the global productivity crisis, and said that complexity and lack of collaboration are choking performance and competition. “Sixty percent of IT budgets are spent maintaining outdated legacy systems, 85% of organizations aren’t able to exploit Big Data for competitive advantage, and cybersecurity problems are rampant,” Wells said. “On top of that, start-ups are stealing your customers and destroying your business model.”
Wells said these challenges call for an overhaul of the way businesses approach decisions. “Businesses need to focus on their decisions rather than just collecting data,” Wells argued. “Decisions are assets, and need to be codified, managed, stored and interrogated. Do this right and you can future-proof your business.”
Dan Ariely, the best-selling author of The (Honest) Truth About Dishonesty, The Upside of Irrationality and Predictably Irrational and the James B. Duke Professor of Behavioral Economics at Duke University, presented new insights from his groundbreaking research into dishonesty.
“If you understand how individuals make decisions, you can make those decisions much more successful,” Ariely said. ”The fact is that most people behave irrationally. They don’t behave in the rational way that most executives would expect. This means it’s very important to do more experimentation, to gather more information on how your customers behave, to guide your decisions.”
These keynote addresses opened FICO® World 2016, at which professionals responsible for customer onboarding and experience, pricing, cybersecurity, risk management, compliance, fraud and IT are exploring the latest technologies and strategies for unlocking insights and powering the best decisions possible. The conference features more than 100 speakers in nearly 80 breakout sessions on analytic innovation, auto lending, collections, credit scoring, customer onboarding and experience, cybersecurity, insurance, mortgage lending and regulatory compliance. Learn more at www.fico.com/ficoworld.
FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956 and based in Silicon Valley, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. FICO holds more than 165 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, telecommunications, health care, retail and many other industries. Using FICO solutions, businesses in more than 100 countries do everything from protecting 2.6 billion payment cards from fraud, to helping people get credit, to ensuring that millions of airplanes and rental cars are in the right place at the right time. Learn more at http://www.fico.com.
For FICO news and media resources, visit www.fico.com/news.
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