Global analytics leader FICO has unveiled its groundbreaking FICO® Focused Foundation Model for Financial Services (FICO® FFM), a domain-specific Generative AI solution designed to deliver highly accurate, auditable, and trustworthy outcomes. The FFM offering includes the FICO® Focused Language Model (FICO® FLM) and FICO® Focused Sequence Model (FICO® FSM), both purpose-built to minimize hallucinations and improve precision compared to traditional AI models.
The FICO FFM is meticulously engineered for financial institutions, focusing on auditable data sets and task-specific model training. Unlike general-purpose large language models (LLMs) that rely on broad knowledge and high computational resources, FICO’s domain-specific models use up to 1,000x fewer resources, making them cost-efficient, adaptable, and fully auditable. Custom-built in-house, these models leverage curated financial services data to deliver reliable, actionable insights for enterprise applications.
“The focused foundation model represents a practitioner’s approach to GenAI in financial services, moving beyond trying to refine universal knowledge models,” said Dr. Scott Zoldi, chief analytics officer at FICO. “FICO FFM enables enterprises to use small language models built for their specific business problems, significantly helping to mitigate hallucinations, provide transparency, auditability, and adaptability. The model complies with regulations through the transparency of data and a decreased risk of hallucinations through Trust Scores and business owner-defined knowledge anchors. These domain-specific models can result in 38% lifts in compliance adherence use cases and more than 35% lifts in world-class transaction analytic models, in areas such as in fraud detection.”
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Enhanced Transparency and Accuracy for Financial Institutions
FICO FLM is optimized with domain- and task-specific data, drastically reducing hallucinations by aligning training data directly with business problems. Its smaller, cost-effective architecture supports agentic AI and improves operational efficiency for financial institutions. FICO FSM focuses on long-range attention in transaction sequences, uncovering complex patterns in transaction histories that traditional analytics often miss. The model enhances real-time detection accuracy in payment fraud, risk assessment, next-best action recommendations, and other critical financial services operations.
“FLMs are essentially similar to SLMs (Small Language Models) and these are transforming how GenAI is used in financial risk management and compliance by providing highly accurate, domain-specific insights and reducing misinformation. Built on curated data and Responsible AI principles, these models are becoming essential tools for institutions that require precision, transparency, and scalable trust,” said Megha Kumar, research vice president of analytics and AI analyst at IDC.
Trust Scores Enable Responsible AI Deployment
FICO FLM and FSM integrate patented and patent-pending Trust Scores to evaluate the reliability of model outputs. Financial institutions can leverage these scores to define risk thresholds, minimize hallucinations, and confidently operationalize AI outputs. This framework ensures alignment with business-defined knowledge anchors and supports continuous risk monitoring in AI-driven decision-making.
A global FICO survey, State of Responsible AI in Financial Services: Unlocking Business Value at Scale, in partnership with Corinium Global Intelligence, found that 40% of respondents view GenAI and LLMs as major ROI drivers, while 56.8% emphasized Responsible AI standards as key to consistent and reliable results.
“While LLMs have been a significant enabler in the rise of AI – and a major disruptor across industries – their adoption has been more limited in financial services,” said Dr. Zoldi. “In highly regulated environments where accountability and precision are critical, current LLMs often lack the reliability, transparency, and governance required for enterprise deployment. FLMs, designed with domain-specific data, auditable model focus, and task specific auditable data, enable development of GenAI that is built for purpose, auditable, and able to be monitored and constrained to business guidelines.”
FICO has filed multiple patents covering FLM and FSM technology, including trust scoring frameworks, model training techniques, real-time monitoring, content tracking, and transaction sequence modeling. These innovations demonstrate FICO’s commitment to advancing Responsible AI and delivering trusted, impactful AI solutions for the financial services sector.