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Learn how to power up with the Big Data insights you need to see your customers and business more clearly.
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©2014 Fair Isaac Corporation. All rights reserved. 1
The Race Is On: Turn Big Data Insights into Smarter DecisionsWin with BI, predictive analytics and decision management
©2014 Fair Isaac Corporation. All rights reserved. 2
Whether you realize it or not, you’re in this race. And your competitors certainly are. So you need to ask these important questions: With so much data out there, and given the speed with which it accumulates and ages, how do you act on these insights before they get too old and opportunities pass? How do you identify what is important for your business and separate it from what’s not worth paying attention to?
Gear up to the full power of business intelligence (BI), predictive analytics and decision management.
©2014 Fair Isaac Corporation. All rights reserved. 3
BI has traditionally answered questions about past performance like:
Which products performed best last quarter?
Which promotions did best with this population segment?
What’s the spending trend for customers in this region?
This is often called “descriptive analytics.”
The best BI suites also try to answer questions about the causes of results, such as:
Why is this segment underperforming?
This is often called “diagnostic analytics.”
©2014 Fair Isaac Corporation. All rights reserved. 4
Today, BI users also want help improving performance going forward. They want to know what is likely to happen and what to do about it.
The focus of BI has traditionally been on what happened, with the best suites also trying to address what’s currently happening and why.
Of course BI isn’t standing still
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To meet user demands, many BI suites are folding in basic predictive analytics and starting to become more integrated into operational processes and events
BI suites have relied on database snapshots in time—data warehouses—for analysis
©2014 Fair Isaac Corporation. All rights reserved. 5
And it takes you too long to turn these analytic insights into operational actions
Even so, used by itself, the most advanced BI tells you too little about what is likely to happen in the future
©2014 Fair Isaac Corporation. All rights reserved. 6
Predictive analytics answer questions about future probabilities Ranging from (seemingly) simple…
How likely is this account to become seriously delinquent over the next six months?
How likely is this debit card transaction to be fraudulent?
…to very complex
How likely is this customer to make a purchase in this product category during the next two weeks—and how much will a 10% discount increase that probability? 15%? 20%?
And that’s not all…
©2014 Fair Isaac Corporation. All rights reserved. 7
Related analytic techniques (decision modeling and strategy optimization) also answer questions about what to do. Which are usually quite complex:
In light of our goals for capital management and this customer’s current/future value, risk profile and expected reaction, what is the most profitable offer?
What is the right overall risk exposure limit for this customer and how should we apportion it across all relevant products?
This is often called “prescriptive analytics.”
View the chart comparing analytic types on the next page...
©2014 Fair Isaac Corporation. All rights reserved. 8
Business Intelligence Within a Decision Management Process
©2014 Fair Isaac Corporation. All rights reserved. 9
Predictive analytics have a wider time perspective than BI. They find predictive patterns in past data that tell you what is likely to happen in the future so you can take the right action now.
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FUTUREFUTURE PROBABILITIES
HISTORICAL PATTERNS
Predict probabilities of specific outcomes and impact on KPIs
Models and other mathematical techniques find predictive patterns in historical data
©2014 Fair Isaac Corporation. All rights reserved. 10
As markets become more dynamic, predictive analytics examine a greater variety of data, including unstructured inputs. Models may also adapt to changing predictive patterns in current production data.
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FUTUREIncorporation of expanding range of future factors like:
Uncertainty (impacts of macro-economic change on decision outcomes)
Capital management goals (return on risk-weighted assets, etc.)
Increasing use of event-driven and streaming analytics, self-calibrating and adaptive techniques
FUTURE PROBABILITIES
HISTORICAL PATTERNS
©2014 Fair Isaac Corporation. All rights reserved. 11
Decision management provides the infrastructure and traction to turn data-driven insights into operational decisions and actions.
At the same time, it answers questions about operational results and how to accelerate improvements, like:
Segment B is underperforming our simulated results for this particular KPI—what can we learn from this gap?
Can we design an experiment that will produce more learning faster while keeping the brakes on the risks and costs of testing?
©2014 Fair Isaac Corporation. All rights reserved. 12
FUTURE PROBABILITIES
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HISTORICAL PATTERNS
Operationalizing analytic insights through decision apps and intelligent automated customer communications
Decision management encompasses the entire process of extracting predictive analytic insights and using them to drive operational decisions.
Managing data, models, business rules and decision strategy optimizations
©2014 Fair Isaac Corporation. All rights reserved. 13
FUTURE PROBABILITIES
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Decision management is incorporating even more powerful ways to simplify and accelerate this process.
Faster, cheaper development of apps with embedded analytics as well as on-demand decision services for existing operational systems
Analytic learning loops that put test-and-learn cycles into hyperdrive
More centralized, automated management of models and other analytic assets
©2014 Fair Isaac Corporation. All rights reserved. 14
FUTURE PROBABILITIES
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PRESENT
FUTURE
HISTORICAL PATTERNS
Cloud access to Big Data analytic and decision management infrastructure, services, apps, development tools and analytic expertise
Everything works with your current BI suite, so you can build on the analytic insights you already have
Here’s the most important development of all: Predictive analytics and decision management are now available through cloud services. No deep-pocket investments or internal analytics expertise required.
©2014 Fair Isaac Corporation. All rights reserved. 15
Move ahead with data-driven actions that differentiate your company and propel you ahead of competitors.
It’s time to power up with the Big Data insights you need to see your customers and business more clearly
You’re in this race. And you’re in it to win.
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: www.ficoanalyticcloud.com
Check out our blogs: Banking Analytics BlogFICO Labs Blog
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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. © 2014 Fair Isaac Corporation. All rights reserved.
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