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Expert systems 445
body of knowledge and policy rules which were derived from all the
past experience, history, and statistical analysis that American Express
had accumulated over the years. These rules were listed in the authorizer’s
training manual (which consisted of several hundred pages). Each
authorizer was usually required to process approximately 26 transactions
per hour; about 150 transactions per day. Decisions on whether or
not to approve these questionable transactions had to be made quickly
and carefully.
By the early 1990s, American Express faced forecasts predicting an
increasing need for authorizing staff due to an increasing volume of
transactions.
Now in place is an expert system which processes almost all of the 15%
of questionable transactions previously handled manually. The system
provides the operator with a recommended decision along with the
relevant reasons as to why that decision was made. The expert system
is not only an adviser to the authorizers, it also authorizes millions of
dollars of credit without human involvement.
The expert system draws on data from 10 to 12 databases, applies
complex ‘expert reasoning’ and, if necessary, engages in a dialogue with
the telephone operator, gathering any extra information required to
approve or deny the authorization.
Recent survey results 34 indicate that the major use of expert systems
in the UK is in processing loan and credit applications, such as these
now handled by expert systems at American Express.
Point-of-sale advice-giving systems
The use of expert systems to provide customers with financial planning
and advice would give financial institutions both a product that the
public would like and the means of gathering information which can be
used to create cross-selling opportunities. Notably, financial planning
is a formalized and structured process where the knowledge domain
is, to all intents and purposes, relatively complete. The person operating
the system does not need to have specialist expertise but can,
with the aid of a suitable system, still offer expert advice. As Pickup 35
documents, research has shown that many people would be prepared
to pay up to $150 to have a comprehensive personal plan, aimed at
maximizing his/her existing resources and setting out how to achieve
his/her financial goals. Once an individual goes through the planning
process (providing details of his/her financial situation, personal and