The Reuters story follows, and the HNC corporate press release announcing the project is here: <http://www.hnc.com/hnc/PressReleases/index.cfm?PressID=112&attributes.f useaction=ShowRelease> press release excerpt: <<By detecting and scoring anomalous patterns in millions of reservation records and other related data, the predictive software could identify suspicious transactions. Flagged information can be immediately investigated by experts to increase security and travel efficiency.... With the ability to instantly analyze all available structured data and unstructured data, airlines could proactively take critical action related to passenger safety. "By using high-end risk analytics and decisioning engines, we can help airlines, airports and law enforcement agencies identify patterns that warrant further investigation - without intrusive security measures," explained John Mutch, chief executive officer of HNC. "Much of HNC's technology research has been funded over the years by defense and intelligence organizations. We're delighted to put this technology to use to increase traveler safety." HNC's Critical Action software, which uses anonymous mathematical algorithms that cannot be reverse engineered, identifies patterns in data that would not be noticed using any other method. HNC's technology can scan structured and unstructured data, detect patterns, categorize, prioritize and automatically route information to relevant security agency personnel.>> --XJ October 4, 2001 HNC Developing New Air Security Software By REUTERS Filed at 5:35 p.m. ET http://biz.yahoo.com/rf/011004/n04269364_3.html LOS ANGELES (Reuters) - HNC Software Inc (news/quote) (HNCS.O), best known for products that help catch credit-card and insurance fraud, said on Thursday it was developing a program for airlines that would sweep through reservation records for suspicious patterns and help flag potential hijackers. San Diego-based HNC is developing the software with privately-held PROS Revenue Management Inc., which manages revenue systems for major airlines, including Southwest Airlines (news/quote) (LUV.N), Delta Air Lines Inc. (news/quote) (DAL.N) and Continental Airlines Inc. (news/quote)``We're already in dialogue with airline companies today,'' said John Mutch, chief executive of HNC, adding that he expected the new security software would be delivered within six months. The new technology will mesh HNC's science-based risk detection capabilities -- which use mathematical algorithms that identify patterns in data -- with PROS' data-driven forecasting expertise. By scoring patterns in millions of reservation records and other data, it will identify suspicious transactions, which can be flagged for investigation. ``We will be able to detect patterns -- for instance, if five people of the same origin are traveling together and may use a certain kind of payment, fall between the ages of 25 and 40, and had previously limited credit history,'' Mutch said. ``These are the types of things we could use to provide risk profiles. The relationships are subtle,'' he said. The program would deliver a real-time scorecard to airlines, with a range of one to 1,000, which would alert airline personnel of the potential need to increase security. ``If a flight scored 950, the likelihood of a security risk or problem would be very high, and the airline, for instance, could cancel or delay the flight,'' he said. SCORING RISKS Depending on the score, airlines could determine whether or not to cancel or delay a flight to re-check baggage, or question passengers, he reiterated. ``Security threats are frequently evident in patterns of traveler data, and our solutions can assist in analyzing these patterns,'' said Bert Winemiller, chief executive of Houston-based PROS. Previous suggestions to use data-mining software to sift through corporate records have drawn opposition from civil rights advocates. ``The system will have to draw data on individuals but the profiles are anonymous,'' said Mutch who conceded that ``there is a trade-off between security and privacy, there's no question.'' Some experts have endorsed the application of the technology, which found its first commercial application in programs that scan for potential credit card fraud. ``In the 1980s, when the first model that screened for hijackers and terrorists was designed, the sophisticated predictive technologies these companies are bringing to bear on this glaring problem did not exist,'' said Joseph Del Balzo, former acting administrator of the Federal Aviation Administration. Mutch said HNC has earmarked about $10 million to develop new security technology, including $4 million in government defense and intelligence contracts. A month before the Sept. 11 attacks on the Pentagon and the World Trade Center, HNC reached a three-year contract with the Defense Department to develop a program that would identify outbreaks of biological attacks by detecting patterns within bacterial DNA. HNC's stock fell 49 cents on Thursday to $21.05, but has rallied back to the level that it had held before the attacks, in line with a gain in other security-related shares. The stock has lost almost 28 percent so far this year. HNC like many other technology companies has seen business slow and on Thursday it said it expects third quarter earnings and sales to fall below analysts' estimates, with revenues ranging between $58 million and $59 million and operating earnings per share from 13 cents to 15 cents. Analysts polled by Thomson Financial/First Call had estimated on average the company would report earnings of 18 cents a share and revenues of $60.5 million. ``I think everyone in the technology sector has been affected in the third quarter and we're not an exception. We saw a lot of standstill and we're going to adopt a very cautious guidance going forward,'' he said.