Big Data Analytics for Every Organization

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2 In every industry, a handful of competitors are rising above the rest These companies have invested heavily in Big Data analytics and real-time decision management to better understand consumer behavior and its context not just what is happening but why. They re using these deeper insights to act with ever-greater speed, relevance and value to deliver superior service to their customers. Who can possibly compete with them? 2014 Fair Isaac Corporation. All rights reserved. 2

3 YOU can. Cloud-based Big Data analytics put deeper analytic insight and the means to immediately drive operational decisions from it within reach of every organization. Companies of all sizes Startups to multinationals Government agencies and non-profits No massive racks of servers No full-time data scientists No deep-pocket investments 2014 Fair Isaac Corporation. All rights reserved. 3

4 The analytic power to reach greater heights Cloud-based analytics reduce the time and money necessary to develop and deploy applications with advanced data-driven decisioning by 80% What do you want to accomplish? Now there s far less expense and risk in trying new ways to solve business problems and deliver superior services to your customers/constituents Fair Isaac Corporation. All rights reserved. 4

6 Top performers have implemented the Big Data infrastructure and technologies to analyze huge volumes and wide varieties of data at high velocities Cloud-based analytics make these resources available to you as on-demand services Deploy complete Big Data analytic infrastructure as a service (Iaas) Download technology components from the cloud to install in your own infrastructure See FICO s approach to cloud-based services on the next page Fair Isaac Corporation. All rights reserved. 6

7 FICO s approach to cloud-based services COMMUNITY Businesses Entrepreneurs Academics Developers Researchers Governments Systems Integrators/ Consultants ISVs ANALYTIC MARKETPLACE Banking Solutions Retail Solutions Health Care Solutions Insurance Solutions Other Solutions Business Rules DECISION MANAGEMENT PLATFORM Application Development Productivity Tools Analytics Optimization Big Data Analytics Components Analytic Services Data Connectors Visualization INFRASTRUCTURE Templates & Frameworks Compute Storage Big Data Infrastructure Networking Consortium Data Third-Party Data Internal Data 2014 Fair Isaac Corporation. All rights reserved. 7

8 Top performers are constantly seeking fresh insights to better understand customers and improve results Cloud-based analytics make it easier for you to tap new data sources and apply new types of analytics Analyze text, speech and other unstructured data Extract more value from data you already have with advanced analytics like time-to-event models Learn more about analyzing speech and time-to-event models on the next 2 pages Fair Isaac Corporation. All rights reserved. 8

9 Analyzing speech and text using techniques such as Semantic Scorecards can help you improve predictive accuracy PERCENTAGE BADS 100% 80% 60% 40% Semantic Scorecard Traditional Scorecard 20% 0% 0% 20% 40% 60% 80% 100% PERCENTAGE GOODS The chart shows a Semantic Scorecard outperforming a bank s traditional risk scorecard. At any percentage of goods (current and fully paid accounts), the Semantic Scorecard predicts a higher percentage of bads (charged-off and defaulted accounts) Fair Isaac Corporation. All rights reserved. 9

10 Time-to-event models pinpoint the best time to act They help you predict rapidly changing purchase probabilities and offer sensitivity. You can also use them to anticipate when a customer is most vulnerable to attrition. PROPENSITY Offers Simple probability model generates constant estimate over an extended time horizon A B C D Best offer timing is six weeks from now Today TIME 2014 Fair Isaac Corporation. All rights reserved. 10

11 Top performers close the gap between insight and action often by embedding analytics into operational apps Cloud-based analytics provide you with intelligent apps and/or the technologies to make your own apps smarter Access domain-specific apps with embedded analytic decisioning as services Tap decision engines to execute any mix of analytic models of business rules Use cloud-based analytic decisioning as callable services to extend the lives and capabilities of legacy systems See a diagram of a decision management architecture on the next page Fair Isaac Corporation. All rights reserved. 11

12 Diagram of a decision management architecture for analytics-driven, customer-centric operations Profiles PROFILING ENGINE Models INTERACTION MANAGER DATA CHANNELS OUTCOMES DATA LAYERS DATA ODS DATA LINK/MATCHING ANALYSIS Rules DECISION ENGINE DATA Models DATA OUTPUTS WORKFLOW MANAGEMENT/ TOOLS OUTCOMES ANALYTIC ENGINE ANALYTIC DATABASE REPORTING ENGINE EXISTING HOST SYSTEMS MODEL MANAGEMENT 2014 Fair Isaac Corporation. All rights reserved. 12

13 Top performers use intelligent, automated communications to enable and improve their business processes Cloud-based analytics let you easily add intelligent, automated communications to your processes Access communications engines that make intelligent decisions about how and when to best contact each customer Offer mobile automated self-service, for higher customer response and lower costs See an example of an automated self-service message on the next page Fair Isaac Corporation. All rights reserved. 13

15 Top performers are innovative because they can try out more ideas, going from good idea to deployed app in just weeks or days Cloud-based analytics provide analytics-oriented RAD tools, enabling you to try more ideas faster and with much less expense Data-driven app frameworks Customizable components Libraries of predictive characteristics Business process and user interface templates Learn more about rapid application development on the next page Fair Isaac Corporation. All rights reserved. 15

16 A shared app for a global workforce in just 7 weeks A global express delivery/courier company needed to improve knowledge sharing across customer accounts and improve management visibility and control over its various transport solutions. It solved the problem in just 7 weeks by using cloud-based RAD tools to develop and deploy an enterprise workflow and supply chain management system. The application, accessible to the organization s entire global workforce, incorporates a knowledge base of customer-centric best practices and structured problem solving for customer requests Fair Isaac Corporation. All rights reserved. 16

17 Top performers mathematically balance all the factors in complex decisions to pinpoint the best action they can take Cloud-based analytics provide you with access to these advanced analytic technologies as well as the expertise on how to use them Get a head start with decision model and optimization templates Use simulation tools to explore trade-offs between your objective(s) and contraint(s) Access optimization engines on-demand See more about decision modeling and optimization on the next two pages Fair Isaac Corporation. All rights reserved. 17

18 A collections decision model (simplified view) incorporates all the key factors in a complex decision INPUT DATA DECISIONS PREDICTIONS METRICS CONSTRAINTS OBJECTIVE Promise to Pay Behavior Score Collectability Score Bureau Score Current Balance Collections Action Expected Collection Amount Roll Rate Charge-off Charge-off Amount Revenue Loss Profit Attrition # Collectors Collection Costs Late Fee 2014 Fair Isaac Corporation. All rights reserved. 18

19 Optimization finds the efficient frontier of potential decision strategies that meet your requirements. Using simulation, you can explore points on the frontier, project their impact on key performance indicators and select the best one for your business. $190 CHARGE-OFF LOSS PER BUCKET 1 DELINQUENT ACCOUNT $185 $180 $175 $170 $165 $160 Scenario 1 Scenario 2 Baseline Current Strategy Optimized Strategies Scenario 3 $ COLLECTION RESOURCE CAPACITY INDEX 2014 Fair Isaac Corporation. All rights reserved. 19

20 Top performers are really good and really fast at learning from the results of their operational decisions Cloud-based analytics provide an experiment-friendly environment to speed up learning and reduce its cost Put champion-challenger testing into hyperdrive with automated tools for designing experiments that yield more plentiful, usable insights Quickly set up learning loops that capture operational results in analytic data marts Use visualization tools to create dashboards for rapid comprehension of test results Jump to the next page to learn about simulation tools Fair Isaac Corporation. All rights reserved. 20

21 Simulation plays a key role in analytic learning Using cloud-based simulation tools, you can project the impact of a decision strategy on key performance indicators for each population segment. After deployment, learning loops capture operational outcomes and make the data immediately available for analysis. Comparing actual results to simulated results, you can evaluate success without having to wait for all the data to come in. RESPONSE T+15 Profile 3 is performing as expected; continuing on-track performance can be extrapolated TRANSACTIONS Simulated Actual T+30 Profile 3 is performing differently than expected; change strategy sooner rather than later DAYS DAYS 2014 Fair Isaac Corporation. All rights reserved. 21

22 Top performers are adept at bringing together resources to accomplish their objectives, often by solving problems in new ways Cloud-based analytics eliminate barriers to problem solving by helping you increase collaboration between internal and external parties Improve intra-organizational collaboration with infrastructure services that make it easier to share data, technologies and ideas Build on cloud apps and components to address emerging opportunities Innovate by combining your organization s expertise and assets with those of other cloud participants See how internal and external collaboration can work on the next two pages Fair Isaac Corporation. All rights reserved. 22

23 Top performers have invested heavily in building out infrastructures that facilitate internal collaboration BUT With cloud-based analytics, you can facilitate collaboration without that investment GLOBAL HUB Connected apps Originations Customer management Collections Shared components Interfaces behavior scoring datamart Enterprise architecture High availability disaster recovery 24/7/365 Country spoke Real-time connection Decision Country apps spoke Users Decision Country Tools apps spoke Users Product Tools Decision apps lines Hosts Users Product lines Tools Hosts Product lines Hosts Analytic services Connected decision apps Shared components, frameworks, templates High-availability infrastructure as a service Country spoke Real-time connection Country spoke Country spoke 2014 Fair Isaac Corporation. All rights reserved. 23

26 Raise your sights With cloud-based Big Data analytics, your organization can reach higher Learn more: Download the white paper on this topic: Insights #74: Cloud Democratizes Access to Big Data Analytics Find out about the FICO Analytic Cloud: Check out our blogs: Banking Analytics Blog FICO Labs Blog For more information North America toll-free Latin America & Caribbean Europe, Middle East & Africa Asia Pacific (0) FICO is a trademark or registered trademark of Fair Isaac Corporation in the United States and in other countries. Other product and company names herein may be trademarks of their respective owners Fair Isaac Corporation. All rights reserved. 3091BK 3/14 PDF