PowerPoint Presentation

ASSET FINANCE INTERNATIONALMachine Learning & AI

Richard Harris | Head of International Operations

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2016 Feedzai2Car sales circa 1950

2016 Feedzai3

2016 Feedzai4Still our model for selling cars

2016 Feedzai5

43% fear sales person pressure33% worry about negotiating23% find it hard to find the right dealerAuto Trader StudyBut are customers satisfied?

http://www.lookers.co.uk/news/auto-trader-car-buying-study/5

2016 Feedzai648% - Finance amongst most difficult part of car purchase56% - Want to manage car finance online75% - Of the industry has not digitized loan originations by consumersIntelligent Environment StudyBut are customers satisfied?

http://www.intelligentenvironments.com/info-centre/press-releases/the-car-finance-industry-is-in-dire-need-of-disruption-financial-technology-firm-intelligent-environment-says6

2016 Feedzai7We_now_live_in_a knowledge_economy

#brainup

We now live in a knowledge economy.7

2016 Feedzai8

A_new_eramanual laborINDUSTRIAL REVOLUTIONbrain powerCOGNITIVE REVOLUTION

In the Industrial Revolution, it was about manual labor.In this new era, its about brain power winning over muscle power.8

2016 Feedzai9

AI_is_making_it_possible_forbig_or_small_to_join_thecognitive_revolutionJ.P. Morgans banking houseJohn D. Rockefellers Standard Oil CompanyAndrew Carnegies Carnegie SteelFord Motor Company1900s REVOLUTIONARIESGoogleUberFacebooknuTonomy2000s REVOLUTIONARIESNetflixAmazon

and you!

AI is powering the cognitive revolution, and making it possible for companies large and small to compete. Its leveling the playing field.9

2016 Feedzai10Those who adapt will win

2016 Feedzai11

nuTonomy_beats_Uber_&_GoogleAI startup in Singapore offersworlds first self-driving taxi service

#underdogWINNERS

There will be winners and losers. A winner is nuTonomy. They have the worlds first self-driving taxis, before Uber.11

Insurify, a startup out of MIT, announced the launch of Evia (Expert Virtual Insurance Agent), an artificially intelligent virtual insurance agent that aims to find you better car insurance using a photo of your license plate.

However, Insurify simplifies the way it gets you that quote by asking you to snap a photo of your license plate and text it to EVIA. The robo-agent then scours millions of records to verify personal information and driving historyand then delivers policy quotes and recommendations back to you via text message.

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EASIR predicts when youll buy a new car before you know it yourself

Silicon Viking startup EASIR has launched its bid to disrupt the old, antiquated car sales industry with an intelligent algorithm that predicts when customers will buy new vehicles, even before the customers know it themselves.

EASIRs new algorithm works within its CRM from the first second it is switched on, thanks to over 20 million customer interactions collected over a ten-year period.

The solution analyzes patterns in customer behavior, then clusters those customers by demographic data, online search behavior, and transactional data, even drawing on sales interaction records held in the CRM.Using that information, and its understanding of millions of customer interactions, it predicts the most promising next steps for each customer.

And it does this throughout the buying cycle, guiding salespeople to take the next steps and helping them send the right information at the right time.

For example, EASIRcanpredict when a customer is going to buy a new car, a trigger every car salesperson wants to understand. If a customer has rejected an offer, for example,the algorithm predicts when the ideal time would be to contact them again, and with which counteroffer,to increase the likelihood of closing an alternate deal.

With its knowledge of car-buying customer patterns, the algorithm can tell the automotive dealers when to send content, what specifically should be sent, and which content delivery channel would be most effective at that particular time.

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2016 Feedzai14

Buy or Sell Your Car OnlineUse Your Credit Cards To Pay

There are lots of apps that help you research prices for buying or selling a car, and theyll even hook you up with a dealership when youre ready to buy.

ButBeepilets you buy and sell used cars in the US without using a dealership or a test drive at all.

So how do you buy a car with an app but without testing it? The same way you buy anything online, Resnik said. You find a car you like at a price that works for your budget and buy it. A Beepi representative goes to the seller, gives her the money and delivers the car to you. Then you get what Beepi calls a 10-day test drive. If the car doesnt work out for you, you get your money back.

Part of expanding the market is offering a streamlined financing process. Beepi has partnered withChaseand credit unions to offer traditional financing and, as of this morning,Ally Financialto offerleasing. You can even pay for the entire car with a credit card orBitcoin.

With Beepi, theres no break between online research and online buying, said Resnik. You start the process online and finish online. That gives us the advantage.

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2016 Feedzai15

What we all want:

My __within arms reach of desire

DATA IS DRIVING ALL OUR DECISIONS 2016 Feedzai16

Data enables machine learning to make our lives easierSelf-driving carsSpam filtersDrone deliverySpace and the unknown

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BUT WE JUST DROWN IN IT 2016 Feedzai17

DATA, MORE DATA90% of worlds data created within last 2 yearsIOT Internet of Things is coming

ALL INSIDE A COMPUTER THE SIZE OF A HOUSE BRICK$2 Billion per day in volume400 dimensions3000 transactions per second99.999% availability

UNTIL MACHINE LEARNING CAME ALONG 2016 Feedzai18US

UK

2016 Feedzai19ML Automates Automation3D PrinterRules/PROGRAMS AutomateTools

VS

BUILT TO TAME COMPLEXITY

Machine learning is to cognitive labor What 3D printers are to human labor

The world has evolved from humans just building a machine to get their work done fasterIts about building a machine that builds machines that do 100-1000 times as much work as before19

WHAT CAN IT DO FOR YOU? 2016 Feedzai20

InfluenceDiscovery

Right OfferRight TimeMore Loan SalesLess Risk

E.g. Big Data allows us to offer a better customer experience by..talk about how we solve a banks thin-file account applicants who are credit-worthy and credit-history-poor. They are however data-rich so we tap into alternate data such as college attended and education major to make informed decisions using better indicators of default loss than traditional car/home payment history.

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HOW DOES IT WORK? 2016 Feedzai21

Influence Discovery

Right Offer, Right Time

More Loan Sales, Less Risk

Machine learning modelsOffers engineNext best actionCredit modelsAnd moreOmnichannel DataCombine data sources fromall channels

E.g. Big Data allows us to offer a better customer experience by..talk about how we solve a banks thin-file account applicants who are credit-worthy and credit-history-poor. They are however data-rich so we tap into alternate data such as college attended and education major to make informed decisions using better indicators of default loss than traditional car/home payment history.

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4 Critical Factors22To having ML be effective for youUse Segments of One for personalization and high precision

Integrate cross channel data for better decisions

Whitebox decision making for compliance

Real-time decision making for great customer experiences

Segment of One | Obliterate loose-fitting cohorts 2016 Feedzai23Hyper-granular level of understanding of each data element, whether that be customers, devices, products, etc.

Example entities

Customer Segment Baby Boomer, Millennial, etc. Account Type Gold, Platinum, Silver, etc.Merchant Category Digital Goods, Fashion, etc.Device Class iPhone, iPad, etc.

Only dozens, hundreds of cohort groups

Cohorts are loose, generic profiles that group together very different entities1

Segment of One | Obliterate loose-fitting cohorts 2016 Feedzai24Hyper-granular level of understanding of each data element, whether that be customers, devices, products, etc.

EntityEach Customer John SmithEach Account # 134149553Each Device ID WERB590902BYT

Segments of One are very precise profiles for just one entity (across a breadth of time).

1Profiles learn over time

Knows that Martha just got promoted, loves BMWs and has a birthday coming up.

Knows that Jake (thin file) pays rent and dues on time for the last three years.

@2016 Feedzai

Black Box to Clear Box25Typically Machine Learning is Black Box cannot see why decisions were made.By changing this, we have fundamentally shifted the possibilities for Machine Learning.3/23/16MURKYDECISIONSCLEARANSWERS2

INTEGRATE CROSS CHANNEL INTELLIGENCE 2016 Feedzai26

Companies with omni-channel customer engagement retain 89% of customers68% of fraud is cross channelFraud for multi-channel merchants via the the online channel has gone up by 31%Omni channel visibility increases fraud detection while preserving customer experience

ONLINE & OFFLINE3

Data is being created across multiple channels. In 2016, 1/3 of online transactions are predicted to happen on mobile. Lines between online and offline are blurring.Information silos limit the opportunity to identify fraud that crosses channel borders or offer richer experience to customers that matter.

Financial companies have realized that they are not utilizing customer data as they effectively as Google or Facebook do. For example, if a valued customers has a credit card, or a mortgage loan that could benefit from refinancing. A simple adoption of machine learning is to make them a relevant offer.

When the customer accesses the banks online channel, calls a call center, or visits a branch, that information is available to the online app, or the sales associate to present the offer.

Data sourcesXxLexis Nexus true cost of fraud 2015Aberdeen study26

REAL TIME DECISION-MAKING IS TABLE STAKES 2016 Feedzai27

More and more we expect instant responseSame day delivery? Expectations are always increasingYet you have to treat everyone as an individual.Self learning models increase the speed of detection

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Fulfillment delays leads to customer dissatisfactionDigital downloads with instant delivery models are exploding digital music, game downloaded, instant money transfer are changing the speed of commerce

In high-volume environments, that data arrives at incredible rates, yet still needs to be analyzed and stored.

Which is the way big data gets big - through a constant stream of incoming data.

Making decisions during customer engagement window when it matters

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2016 Feedzai28

Knowledgewill_set_you_free#brainup

29Feedzai is Artificial Intelligence.Keep commerce safe and create a better customer experience through machine learning.INVESTORSQUICK FACTSMISSION

What Others Say

The U.S. market fraud prevention just got a new player.Feedzais machine learning is the next wave.Ranked as a cool technology to watch.Startups that are owning the data game.Payment Card Management: Essential tools for U.S. card issuers

Top 50 High Growth startups in EuropeFounded by data scientists and aerospace engineers in 2009130+ employees and doubling

Offices in Portugal, Silicon Valley, New York City, LondonSeries B funded by Citi, Capital One, Oak HC/FT, DCVC and Sapphire Ventures (SAP) 2016 Feedzai

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2016 Feedzai Confidential30INTRODUCING A NEW BREED OF A.I. SYSTEMS

Maximum performance due to iterating over 200-300 risk models in days/weeks, not months.

Time taken to develop new risk models: 2-4 weeksA single platform that launches new use cases in weeks.

A PLATFORM THAT CREATES THOUSANDS OF SMART RISK MODELS

Point solutions -> Unified platform supporting all channels and business linesMember credit unions buying solutions for unmet needs -> CO-OP offers customized solutions per credit union or segmentStatic risk models -> A machine that iterates over hundreds of models for maximum effectivenessOld technology, e.g. Neural Networks -> State-of-the-art technology, e.g. Random Forests, Deep Learning, Unsupervised LearningNo models for new types of business/channel fraud, e.g. Kiosk fraud, Account Takeovers -> Be able to generate robust models for new fraud types in weeks

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Feedzai WORKS ACROSS the Entire CUSTOMER Lifecycle

Managing risk and creating the optimal customer experience using machine learning.

Account OpeningReal-time MarketingLending DecisionsChurn PredictionReactivationRetargetingFraud ScreeningSanctions ScreeningKYCTrans/Merchant MonitoringCross-sell/Up-sellLogin Screening/ATOnew decision capabilities no longer constrained by data silos 2016 Feedzai Confidential31

THANK YOU

Richard Harris | richard.harris@feedzai.com

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