What Have We Here, Is It Still Legit? PowerPoint Presentation, PPT - DocSlides

What Have We Here, Is It Still Legit? PowerPoint Presentation, PPT - DocSlides

2016-04-28 26K 26 0 0

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Managing Your Predictive Model Portfolio for Risk, Compliance and Effectiveness. Andrew Flint. Senior Director, Product Management. FICO. Achieving and sustaining regulatory compliance in analytics is hard. . ID: 296714

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What Have We Here, Is It Still Legit?

Managing Your Predictive Model Portfolio for Risk, Compliance and Effectiveness

Andrew Flint

Senior Director, Product Management

FICO

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Achieving and sustaining regulatory compliance in analytics is hard. We can make it easier.

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Managing models for regulatory compliance doesn’t have to suck.

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No time for your father’s model managerYou have a tough jobThe rules keep changingOur obligations are tougherBut that’s good—fun and profit!Relentlessly monitorMake a repeatable game planBe an open book (transparency rocks!)Engage all stakeholdersKnow what you did, show what you did

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With Great Power Comes Great Responsibility

Data and analytics are giving us tremendous power

Control for risk

Out-pace the competition

Delight our customersHierarchy of requirementsRegulatoryShareholdersCustomersEthicalOur responsibility:Carefully construct, inventory, review and manage the analytic models that drive our decisions

Compliance in The Big Data Age

©

2014 Fair Isaac Corporation. Confidential.

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Clamshell packagingMerged cells in ExcelListacles and clickbaitMental lazinessI don’t want to live in a world where this stuff isn’t properly thought through

Things that Make Me Angry

Harry Wallop

of

The Telegraph gnashes in frustration at a hermetically sealed toothbrush. Photo: Eddie Mulholland

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Model management challenges include:

Tracking model usage

Understanding decision impact

Avoiding poor decisionsPrioritizing model inspection and redevelopment Balancing time between audits and innovationsResponding quickly to regulators

Traditional Model Management Isn’t Up to the Job

©

2014 Fair Isaac Corporation. Confidential.

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Technology

Centralize

Simplify

AutomateProcessDefineEngageRepeatPeopleConsiderReviewRefine

What’s Necessary?

©

2014 Fair Isaac Corporation. Confidential.

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Centralized,

Automated Model Management

Manage your model portfolio for risk, compliance and effectiveness

Relentlessly monitor

Use a repeatable game planBe an open bookEngage all stakeholdersKnow what you did, show what you did

©

2014 Fair Isaac Corporation. Confidential.

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Relentlessly Monitor

The Old Way of Doing Things:

Grab new data

Unearth old programs

Hope for minimal changeCirculate for reviewArchive for posterity

Why It’s ImportantYou must regularly and relentlessly monitor model performance to ensure you’re making effective business decisions

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Relentlessly Monitor

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Achievable, if we can…

Automate extraction & execution

Analyze against alert thresholdsEnforce and archive the reviews

How it Could Be BetterEliminate the drudgery, latency and risk

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Relentlessly Monitor

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Use a Repeatable Game Plan

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The Old Way Has:

Decent repeatability in the analytic steps

Little support of the total business processMore improvisation than you’d likeHigh variance per individualCan get lost in bureaucracy

We’ll All Feel Better Knowing:that you’re building and managing models with consistent, reliable methods, and that everyone’s following the playbook

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Use a Repeatable Game Plan

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Instead, what if we could

Codify a process for the model’s complete lifecycleEngage all the right players at each step of the planEasily document every step of the wayBring that same discipline to ad hoc, unscripted work?

How it Could Be BetterEasier to define, distribute, engage in, enforce and document the analytic playbook you want to follow

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Business Processes for Model Management

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Be an Open Book

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Transparency has Value

Transparent models can be

explainedPredictors conform to business needsEasily validated on sup-populationsInspect for relations to decision strategies

Regulators Want to Know:that you’re using the right model for your data and the decision you’re making

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Be an Open Book

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Scorecards are a highly transparent and interpretable type of

model

This scorecard excerpt shows

how points are assigned for different values within a category of

information, and how

each factor relates to an individual’s

score:

©

2014

Fair Isaac Corporation. Confidential.

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Engage All the Stakeholders

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Business Process Management Helps:

Coordinate, engage and document participants

Who’s responsible? Who’s accountable?Who signed off on this?

It Takes a Village to Raise a Model:The practice of predictive analytics is evolving from simple team sport to a whole athletic conference.

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Engage All the Stakeholders

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Know What You Did, Show What You Did

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Model Management Best Practices:

Inventory every model in

operationsCatalog its purpose, usage, restrictions, data sources & typesEnable those unfamiliar with each model to quickly understand How it operatesKey assumptionsLimitations

Regulators Want to Know:you can demonstrate all the careful work you did to design, develop, implement, audit and monitor your models

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Know What You Did, Show What You Did

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Know What You Did, Show What You Did

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Centralized,

Automated Model Management

Manage your model portfolio for risk, compliance and effectiveness

Relentlessly monitor

Use a repeatable game planBe an open bookEngage all stakeholdersKnow what you did, show what you did

©

2014 Fair Isaac Corporation. Confidential.

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FICO

®

Model Central

Control center

for all modeling activity across your organization

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Model Central Delivers Practical Benefits

Balance business goals & constraints

Develop & deploy

models faster

Ensure models are accurate and effective

Demonstrate institutional

control & governance

Define & execute consistent methodologies

Engage staff more effectively

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Your analytic portfolio requires more care than ever

Demands on staff continuing to rise

Adopt the technology and processes to empower your people and help your business succeed

Summary

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Thank You!

Andrew Flint

andrewflint@fico.com

+1 415 446 6632

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Learn More at FICO World

Related SessionsStress Test Modeling Best Practices Wed @ 5pmRegulatory Olympics: Why Conduct Risk Matters Panel Thu @ 11amEnsuring Model Compliance and Efficiencies Panel Thu @ 1:30pmUnified Scorecard Performance Monitoring Thu @ 4:45pmProducts in Solution CenterFICO® Model Central™ Solution @ Big Data Analytics kioskExperts at FICO WorldDave Woods, Senior Director, Risk ManagementAnna Napier, Director, Financial ServicesDeena Narayanaswamy, Principal Consultant, Risk ManagementWhite Papers & BlogsComplete and Compete: Model Management Best PracticesFICO® Model Central™ Solution: Managing and Improving Customer Decisions

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Please rate this session online!

Andrew Flintandrewflint@fico.com

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