1. © 2014 Fair Isaac Corporation. Confidential. This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent. Bridging the Great Divide: Using Graph Analytics to Bring Analytic Models to Life Don Griest Sr. Director, Product Management FICO Mike Betron Director, Product Management FICO

2. © 2014 Fair Isaac Corporation. Confidential. Organized Fraud in Action Eighteen People Charged in International $200 Million Credit Card Fraud Scam Crime Ring Invented 7,000 Fake Identities to Obtain Tens of Thousands of Credit Cards Eighteen People Charged in International $200 Million Credit Card Fraud Scam Crime Ring Invented 7,000 Fake Identities to Obtain Tens of Thousands of Credit Cards Organized Fraudsters and Insiders 18 individuals 1,800 drop addresses Acquire Valid Identity Information 7,000 synthetic identities Create Valid Accounts and Credit Lines 25,000 fraudulent credit cards Make Purchases and Build Credit 50 complicit businesses Clear Out Accounts and Disappear > $200 million loss

3. Agenda © 2014 Fair Isaac Corporation. Confidential. ► Overview of Social Network Analytics (SNA) ► FICO’s Approach to SNA and Predictive Analytics ► Enhancing Applications with SNA ► Examples ► Q & A 3

4. © 2014 Fair Isaac Corporation. Confidential. What is Social Network Analysis (SNA)? 4

5. © 2014 Fair Isaac Corporation. Confidential. What Is Social Network Analytics (SNA)? 5 Application of Graph Theory Vertex (node) Node Properties XYZ Edge (link) G = (V,E) Predictive Insight 972 721 385 Analytics Analytic approach of correlating people, entities, and events and the analysis of the resulting networks for risk or opportunity

6. © 2014 Fair Isaac Corporation. Confidential. Examples of SNA in Action … 6 Calculate Domain and Page Strength Marketing – Householding, upsell, ads, etc. Organized Fraud Analytics

7. © 2014 Fair Isaac Corporation. Confidential. Example People (Identities) ► Myself ► Immediate family ► Colleagues ► Bank employees ► Known bad guys Things (Entities) ► Accounts ► Machine IDs ► Phone numbers ► Social Security ID #s ► License #s ► Addresses ► Names Transactions (Events) ► Account Opening ► Deposits ► Payments ► Account changes (e.g. new address or add person to account) ► Account closing Suzie Smith 7

8. © 2014 Fair Isaac Corporation. Confidential. Example: Suzie Smith’s Network Loan (Fraud) M Rivera Mark Rivera Loan (Fraud) J. Benton Charged off CC J. Benton Checking J. Benton Ph: 216-525-6565 John Benton Alex Dwyer Charged off CC A. Dwyer Charged Off Credit Card J Wilson Charged off Loan J Wilson Checking J Wilson 6200 Pinehurst, Cleveland Jack Wilson 12395 Cedar Road, Apt 225, Cleveland Checking S Smith Loan S. Smith Credit Card S Smith Suzie Smith Entities Shared email with c/o accts. Shared address with c/o acct and fraud loan Network 2 Accounts on network under investigation High account opening velocity on network High charge off velocity on network Customer / Account Spending during payment clearance cycle High risk transactions Analytic Insight

9. © 2014 Fair Isaac Corporation. Confidential. The Social Network Analysis Process Entity Resolution Access disparate data, match entities and combine into a single entity view 9 Customer Data Employee SARS Case Management Third Party Lexis Nexis CFAC Vendor Applicants Social Network Analytics Entity correlation, network analytics and risk scoring 972 721 385

10. © 2014 Fair Isaac Corporation. Confidential. Individual CARDSDDAEmployeesBad Guys Entity Resolution ► Entity Resolution bridges the organizational and geographical siloes to connect identities to improve risk analytics. Susan A. Smith 1 Edison Rd Bedford Park SA 5042 T:08 8177 0035 LIC#1702188364 DOB 07/09/64 Suzie A. Carr One Edison Rd Belfort SA 1510 T:+64 8 8177 0035 LIC#7102188364 A. Suzie Smith 1067 6 th Ave Bedford SA 01510 TEL# 08 8356 4131 ID#I7021B8364 DOB 07/09/64 Suzie Carr-Smith 1 Wallace Ave Bedford SA 1510 Cell#06 8177 0035 LIC#17-0UYRE-*8364 DOB 07/08/64

11. © 2014 Fair Isaac Corporation. Confidential. Loan (Fraud) M Rivera Mark Rivera Loan (Fraud) J. Benton Charged off CC J. Benton Checking J. Benton Ph: 216-525-6565 John Benton Alex Dwyer Charged off CC A. Dwyer Charged Off Credit Card J Wilson Charged off Loan J Wilson Checking J Wilson 6200 Pinehurst, Cleveland Jack Wilson 12395 Cedar Road, Apt 225, Cleveland Checking S Smith Loan S. Smith Credit Card S Smith Suzie Smith Social Network Analytics for Proactive Fraud Detection

12. © 2014 Fair Isaac Corporation. Confidential. Social Network Analytics for Proactive Fraud Detection 12 Persisted Network Network Variables Predictable Insight

13. © 2014 Fair Isaac Corporation. Confidential. Is anyone on the network connected to known entities? How many? What Degree? Fraud: Connections to known fraudsters, bad addresses, etc. Onboarding: Connections to previously declined applications Marketing: Connections to other household members Network Connections to Known Entities Types of Insights/Variables Available Using SNA

14. © 2014 Fair Isaac Corporation. Confidential. Types of Insights/Variables Available Using SNA Which network characteristics are statistically significant? Fraud: The velocity of a network (how fast it grew versus other networks) Website Popularity Ranking: The measurement of linked pages to domains within the network Operations: Shortest path  Capacity optimization Statistical Analytics

15. © 2014 Fair Isaac Corporation. Confidential. Industry/Domain Specific Rules based on previous fraud experience for the industry and use case P&C Claims Fraud: Multiple claims with high injury/low property damage ratio Bank Application Fraud: Number of declined applications matching applicant within a certain time period Marketing: Percentage of customers that bought diapers and wine during the same transaction Types of Insights/Variables Available Using SNA

16. © 2014 Fair Isaac Corporation. Confidential. Network Variables Improve Fraud Detection and Accuracy 16 Uplift in claims fraud detected at top 5 insurance company

17. © 2014 Fair Isaac Corporation. Confidential. SNA – General Usage Modes NameSuzie Smith Address12395 Cedar Park Rd., Apt 225 CityCleveland StateOH Zip44102 Investigations Compliance Data Exploration Post-Process Investigation Search/MatchSuspect(s) Matches and Visualization Customers Applicants Employees Fraud/AML Transactional 3 rd Party Data Access Customers Applicants Employees Fraud/AML Transactional 3 rd Party Data Access In-Process Detection Originations Claims Fraud Screening Bust-Out Fraud Common Point of Purchase New Claims, apps, etc. Network Analysis Scored Claims, Apps, etc. Broad Search 96 85 56 Customers Applicants Employees Fraud/AML Transactional 3 rd Party Data Access Customers Applicants Employees Fraud/AML Transactional 3 rd Party Data Access

18. © 2014 Fair Isaac Corporation. Confidential. FICO ® Decision Management Suite A complete solution: ► Ingest and explore data ► Discover analytic insights ► Execute analytics in operational decisions ► Create and deliver engaging web & mobile applications ► Track and improve models & strategies

19. © 2014 Fair Isaac Corporation. Confidential. 19 FICO ® Decision Management Platform Optimization Modeler Decision Modeler Analytic Modeler FICO ® Application Studio FICO ® Visual Insights Studio FICO Applications Customer Growth & Retention Customer Originations Debt Management Fraud Management FICO ® Analytic Marketplace Social Network Analysis in FICO DM Suite Identity Resolution Engine 19 Network Visualization Network Analytics

20. © 2014 Fair Isaac Corporation. Confidential. Extending Solutions with Link Analysis FICO ® Identity Resolution Engine FICO ® Application Studio Analytic Models Decision Rules FICO ® Decision Management Platform 20 FICO Decision Management Suite Network VisualizationNetwork Analytics

21. © 2014 Fair Isaac Corporation. Confidential. Extend applications and predictive models with social network analytics A fast and easy way to add: ► Powerful new source to improve analytics ► Proactive and Investigative capabilities ► Out-of-the-box solutions ► Craft new solutions using FICO ® DM Suite Summary  Increase predictive power  Streamline investigations  Faster time to value Key Benefits 21

22. © 2014 Fair Isaac Corporation. Confidential. This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent. Thank You! Don Griest Sr. Director, Product Management FICO Mike Betron Director, Product Management FICO

23. © 2014 Fair Isaac Corporation. Confidential. Learn More at FICO World Related Sessions ► Harnessing Network Analytics to Better Combat Fraud (Wednesday @ 3:15 in Harbor Island 1) ► Product Showcase: FICO ® Identity Resolution Engine (Wednesday @ 5:00 in Nautilus 4) ► Stop Fraud at the Front End: Curtailing Application Fraud (Thursday @ 4:45 in Nautilus 4) Products in Solution Center ► FICO ® Identity Resolution Engine ► FICO ® Decision Management Platform Experts at FICO World ► Mike Betron; IRE and SNA Product Management ► Liz Lasher; Fraud Solutions ► Nitin Basant; Analytical Sciences White Papers Online ► Busting Fraud Rings with Social Link Analysis Blogs ► www.fico.com/blog 23

24. © 2014 Fair Isaac Corporation. Confidential. Please rate this session Online! Don Griest dongriest@fico.com Mike Betron michaelbetron@fico.com 24