SAS Institute announced a new SAS Fair Banking system aimed at helping banks stay within regulations in their lending practices at its SAS user group conference Monday.

SAS Fair Banking is meant to help lenders ensure there are no hidden patterns of discrimination in their lending business, patterns that could lead them into legal disputes if found and aired by customers or applicants who felt discriminated against.

"Banks are now under regulations that require them to disclose their lending data. There's nothing to prevent a group of lawyers from getting together, examining that data and filing a lawsuit," warned Jim Goodnight, CEO of the business intelligence software firm in an interview. SAS' Fair Banking system lets lenders track their global exposure to the requirements of fair lending regulations, he said.

The company is also moving deeper into specialized analytics systems for detecting consumer credit risk and fraud, adding enhancements to its Anti-Money Laundering and Credit Risk Management for Banking applications. The latter moves bring it into more direct competition with Fair Isaac & Co., the acknowledged leader in that field. The credit risk and fraud systems are specialized versions of the SAS System's core analytics capabilities.

In many cases, the system that identifies a risky credit or debit transaction is "the same type of system that you use to identify who your most valuable customers are or who are the customers most likely to leave for the competition," said Goodnight. But he acknowledged the underlying analytics must be re-architected to return an assessment of customer credit risk in milliseconds, during the interval of a credit card authorization. Lengthy visits to the data warehouse are not allowed in such a setting, he noted.

Michael Hughes, SAS senior director of consumer fraud solutions, said Goodnight decided to pursue the use of SAS analytics in credit risk and fraud systems in 2002 and hired former experts in the field who were retired from HNC Software. HNC was acquired by Fair Isaac in April 2002 in a stock deal valued at $810 million.

Hughes is a former employee with HNC, and says other former HNC employees left Fair Isaac to join SAS' new financial modeling office in San Diego. The most recent customer for the SAS Credit Risk Management for Banking is Hong Kong Shanghai Bank Corp. It uses the system for its worldwide credit card operations, he said.

SAS also announced that it's expanding its data integration research and development efforts, including plans to increase R&D spending on data integration by 15% each this year and in 2007 to advance the SAS Enterprise Data Integration Server. The effort includes expanded data quality technology and new customer data integration technology.