Authorizer's Assistant: an expert system decides on credit
In November 1988, according to its authors' paper at IAAI-89, American Express put the Authorizer's Assistant into full operation in all US centres: an expert system of 890 rules in ART from Inference Corporation prepares card authorization decisions for authorizers and approves millions of dollars of credit daily without human intervention. The pilot ran at one centre from March-April 1987.
Why it matters
A large financial service entrusted daily credit decisions to an expert system around the clock, and deployment was decided on a return-on-investment case rather than as a technology demonstration. In the company's experiments, with the system authorizer productivity rose by 20%, denials fell by 33%, and about half as many cases ended in credit and fraud losses.
The system complements CAS, a program on an IBM mainframe that approves most requests itself and refers the rest to authorizers. It runs on Symbolics workstations, each serving up to nine authorizers, and applies its rules to thousands of transactions an hour, 24 hours a day. The paper's timeline: a request for proposals in July 1985, the contract with Inference in October 1985, knowledge development by about 4.5 knowledge engineers over 13 months from November 1985 to November 1986; the decision to deploy in September 1987; a beta test in July-October 1988. By the paper, productivity savings alone would pay for the system in under two years, and the potential savings on losses are more than five times larger. Kingston's independent review (ES 2003) says an authorizer makes such a decision in about 90 seconds and that the system saved more money through better decisions than through time. A discrepancy: a paper by the same first author at IAAI-92 dates US-wide production to November 1989; the record follows the 1989 paper, written closer to the event. What the record does not claim: the effects as an independent measurement, since they are American Express's own experiments described by staff of the customer and the contractor; the paper gives no transaction volumes or sums of money.