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
© 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.
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
Organized
Fraudsters
and Insiders
Acquire
Valid Identity
Information
Create Valid
Accounts and
Credit Lines
Make
Purchases and
Build Credit
Clear Out
Accounts and
Disappear
18 individuals
7,000 synthetic
identities
25,000 fraudulent
credit cards
50 complicit
businesses
> $200 million
loss
1,800 drop
addresses
© 2014 Fair Isaac Corporation. Confidential.
Agenda
►Overview
of Social Network Analytics (SNA)
►FICO’s Approach
to SNA and Predictive Analytics
►Enhancing Applications
►Examples
►Q
3
&A
© 2014 Fair Isaac Corporation. Confidential.
with SNA
What is Social Network Analysis (SNA)?
4
© 2014 Fair Isaac Corporation. Confidential.
What Is Social Network Analytics (SNA)?
Analytic approach of correlating people, entities, and events and the analysis of
the resulting networks for risk or opportunity
Edge
(link)
Vertex (node)
385
721
XYZ
972
Node
Properties
G = (V,E)
Application of Graph Theory
5
© 2014 Fair Isaac Corporation. Confidential.
Analytics
Predictive Insight
Examples of SNA in Action …
Calculate Domain and
Page Strength
6
© 2014 Fair Isaac Corporation. Confidential.
Marketing – Householding,
upsell, ads, etc.
Organized Fraud
Analytics
Example
Suzie Smith
People (Identities)
Transactions (Events)
► Myself
► Accounts
► Account
► Immediate
► Machine
► Deposits
family
► Colleagues
► Bank employees
► Known bad guys
7
Things (Entities)
© 2014 Fair Isaac Corporation. Confidential.
IDs
► Phone numbers
► Social Security ID #s
► License #s
► Addresses
► Names
Opening
► Payments
► Account
changes (e.g.
new address or add
person to account)
► Account closing
Example: Suzie Smith’s Network
Analytic Insight
Checking
S Smith
Alex Dwyer
Charged off CC
A. Dwyer
Credit Card
S Smith
Checking
J. Benton
Suzie Smith
Charged off CC
J. Benton
12395 Cedar Road,
Apt 225, Cleveland
Jack Wilson
Ph: 216-525-6565
Checking
J Wilson
Charged off
Loan
J Wilson
6200 Pinehurst,
Cleveland
Charged Off Credit Card
J Wilson
© 2014 Fair Isaac Corporation. Confidential.
• Spending during payment
clearance cycle
• High risk transactions
Entities
John Benton
Loan
S. Smith
Customer / Account
Loan (Fraud)
J. Benton
Mark Rivera
Loan (Fraud)
M Rivera
• 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
The Social Network Analysis Process
Entity Resolution
Social Network Analytics
Access disparate data, match entities
and combine into a single entity view
Entity correlation, network analytics and
risk scoring
385
Customer Data
721
Employee
SARS
Case Management
Third Party
Lexis Nexis CFAC
Vendor
Applicants
9 Corporation. Confidential.
© 2014 Fair Isaac
972
Entity Resolution
► Entity
Resolution bridges the organizational and geographical siloes to connect
identities to improve risk analytics.
Individual
CARDS
DDA
Bad Guys
Employees
Susan A. Smith
1 Edison Rd
Bedford Park SA 5042
T:08 8177 0035
LIC#1702188364
DOB 07/09/64
A. Suzie Smith
1067 6th 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
Suzie A. Carr
One Edison Rd
Belfort SA 1510
T:+64 8 8177 0035
LIC#7102188364
© 2014 Fair Isaac Corporation. Confidential.
Social Network Analytics for Proactive Fraud Detection
Checking
S Smith
Alex Dwyer
Charged off CC
A. Dwyer
Credit Card
S Smith
Checking
J. Benton
John Benton
Loan
S. Smith
Suzie Smith
Charged off CC
J. Benton
12395 Cedar Road,
Apt 225, Cleveland
Jack Wilson
Ph: 216-525-6565
Checking
J Wilson
Charged off
Loan
J Wilson
© 2014 Fair Isaac Corporation. Confidential.
6200 Pinehurst,
Cleveland
Charged Off Credit Card
J Wilson
Loan (Fraud)
J. Benton
Mark Rivera
Loan (Fraud)
M Rivera
Social Network Analytics for Proactive Fraud Detection
Persisted Network
12
© 2014 Fair Isaac Corporation. Confidential.
Network Variables
Predictable Insight
Types of Insights/Variables Available Using SNA
Network Connections to Known Entities
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
© 2014 Fair Isaac Corporation. Confidential.
Types of Insights/Variables Available Using SNA
Statistical Analytics
• Fraud: The velocity of a network (how
fast it grew versus other networks)
Which network
characteristics are
statistically significant?
• Website Popularity Ranking: The
measurement of linked pages to
domains within the network
• Operations: Shortest path  Capacity
optimization
© 2014 Fair Isaac Corporation. Confidential.
Types of Insights/Variables Available Using SNA
Industry/Domain Specific
• P&C Claims Fraud: Multiple claims with
high injury/low property damage ratio
Rules based on previous
fraud experience for the
industry and use case
• 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
© 2014 Fair Isaac Corporation. Confidential.
Network Variables Improve Fraud Detection and Accuracy
100
Uplift in claims
fraud detected at
top 5 insurance
company
90
80
% High
70
60
50
With network variables
40
Without network variables
30
20
10
0
0
1
2
3
% Low
16
© 2014 Fair Isaac Corporation. Confidential.
4
5
14% relative improvement
Post-Process
Investigation
SNA – General Usage Modes
Search Criteria
Name
Suzie Smith
Address
12395 Cedar Park Rd., Apt 225
City
Cleveland
State
OH
Zip
44102
Suspect(s)
Customers
Applicants
Employees
Fraud/AML
Transactional
3rd Party Data Access
Search/Match
Credit Card
S Smith
Checking
J. Benton
Ph: 440-525-6565
Checking
J Wilson
CO Loan
J Wilson
In-Process
Detection
© 2014 Fair Isaac Corporation. Confidential.
Broad Search
John Benton
Suzie Smith
CO Loan
J. Benton
12395 Cedar Road,
Apt 225, Cleveland
Jack Wilson
SIU—Loan
J. Benton
Ph: 216-525-6565
6200 Pinehurst,
Cleveland
• Investigations
• Compliance
• Data Exploration
Mark Rivera
CO—Credit Card
J Wilson
SIU – Mortgage
M Rivera
Matches and Visualization
Customers
Applicants
Employees
Fraud/AML
Transactional
3rd Party Data Access
New Claims, apps, etc.
Checking
S Smith
Loan
S. Smith
56
85
96
Network Analysis
Scored Claims,
Apps, etc.
•
•
•
•
•
Originations
Claims Fraud
Screening
Bust-Out Fraud
Common Point of
Purchase
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
© 2014 Fair Isaac Corporation. Confidential.
Social Network Analysis in FICO DM Suite
FICO® Analytic Marketplace
Customer
Growth &
Retention
Customer
Originations
Debt
Management
Fraud
Management
FICO Applications
FICO® Application Studio
Identity Resolution
Engine
Analytic
Modeler
Decision
Modeler
FICO® Decision Management Platform
Network
Visualization
19
Network
Analytics
© 2014 Fair Isaac Corporation. Confidential.
FICO® Visual Insights Studio
Optimization
Modeler
Extending Solutions with Link Analysis
FICO Decision Management Suite
Analytic
Models
Decision
Rules
FICO® Decision
Management Platform
FICO® Application
Studio
Network Visualization
Network Analytics
FICO® Identity Resolution Engine
20
© 2014 Fair Isaac Corporation. Confidential.
Summary
Extend applications and predictive models with social network analytics
A fast and easy way to add:
► Powerful
► Proactive
new source to improve analytics
and Investigative capabilities
► Out-of-the-box
► Craft
21
solutions
new solutions using FICO® DM Suite
© 2014 Fair Isaac Corporation. Confidential.
Key Benefits
 Increase predictive power
 Streamline investigations
 Faster time to value
Thank You!
Don Griest
Sr. Director, Product Management
FICO
Mike Betron
Director, Product Management
FICO
© 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.
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
© 2014 Fair Isaac Corporation. Confidential.
Please rate this session Online!
Don Griest
dongriest@fico.com
24
© 2014 Fair Isaac Corporation. Confidential.
Mike Betron
michaelbetron@fico.com