Callcredit incorporates Featurespace's machine learning technology to combat fraudulent activities
Callcredit, a notable credit ratings agency in the UK, has introduced innovative tech from Featurespace, a tech start-up based in Cambridge, to combat identity fraud.
Founded by Cambridge University mathematician professor Dr. Bill Fitzgerald and his former PhD student David Excell, Featurespace specializes in the statistical technique of "Bayesian inference". This approach predicts outcomes from data without being limited to extrapolating trends from incomplete datasets. Rather, it initially assumes any outcome is random, refining its estimates as more data becomes available.
- Interesting Fact: Bayesian inference is essentially like guessing probabilities of hypotheses in situations where you can't perform random trials or experiments, as Dr. Fitzgerald describes.
Callcredit provides various services, including fraud detection, and one of their solutions is analyzing customer buying patterns to spot unusual and potentially fraudulent behavior. After testing Featurespace's ARIC product with historical data, Callcredit's John Cannon revealed that the technology significantly outperformed their existing analytics, offering more effective fraud detection with fewer false positives.
Now, Callcredit plans to deploy ARIC within its fraud analysis unit and use it to prevent fraud in its consumer wing. The service they offer, Noddle, allows consumers access to their credit reports. However, these reports are valuable targets for fraudsters, so ARIC will help improve customer identification and authentication processes.
Featurespace and Callcredit will also collaborate to provide a joint service for commercial clients, allowing them to apply ARIC to Callcredit's credit rating data and predict the likelihood of customer loan defaults, for instance.
Founded in 2005, Featurespace has been discussed with Callcredit for several years. Last year, the company received investment from Invoke Capital—a VC firm established by former Autonomy CEO, Dr. Mike Lynch, another former student of Fitzgerald's. Martina King, the new CEO of Featurespace, was previously the managing director of Aurasma, Autonomy's augmented reality spin-out, and had managed Yahoo! UK and London radio station Capital FM. With King aboard, the company has become a more attractive business partner for Callcredit.
The question of how Featurespace's connection to Lynch will impact their success remains uncertain. Recent news has suggested that the FBI's investigation into Hewlett-Packard's accusations against Lynch and the former Autonomy management could continue for a couple of years. Meanwhile, their first customer, betting exchange Betfair, has agreed to a five-year partnership with Featurespace to continue using its technology. All in all, it seems that Featurespace's Bayesian inference-based technology is proving to be highly effective in the realm of identity fraud prevention.
The collaboration between Callcredit and Featurespace, a tech start-up specializing in artificial-intelligence and technology, is expected to expand their services to the finance and business sectors. Featurespace's Bayesian inference technology, with its ability to offer more effective fraud detection and predict the likelihood of customer loan defaults, is being deployed by Callcredit to improve their fraud analysis unit, particularly in the consumer wing and their Noddle service.
By implementing Featurespace's ARIC product, which outperformed Callcredit's existing analytics, they will improve customer identification and authentication processes, thereby strengthening their capabilities against identity fraud. Moreover, the joint service for commercial clients marks a new venture for both companies, where they can use Bayesian inference to analyze Callcredit's credit rating data.
