Construction of an AI-Driven Risk Management Framework for Financial Service Firms Using the MRDM Approach

2021 ◽  
pp. 1-33
Author(s):  
Kuang-Hua Hu ◽  
Fu-Hsiang Chen ◽  
Ming-Fu Hsu ◽  
Gwo-Hshiung Tzeng
Keyword(s):  
Decision Making ◽  
Risk Management ◽  
Rough Set Theory ◽  
Multiple Criteria Decision Making ◽  
Business Environment ◽  
Financial Service ◽  
Service Firms ◽  
Rule Based ◽  
Financial Service Firms ◽  
The Impact

The complex problem of risk factors has greatly increased globally due to the quick ever-changing digital era. The development of suitable techniques for facilitating the performance of risk management in the financial service domain is thus an urgent task, especially in today’s highly turbulent business environment. The development of such techniques involves many factors like the classical multiple criteria decision-making (MCDM) problem, but too many factors surrounding the users will confuse them and lead to improper judgments. To deal with this critical task, this study proposes a fusion multiple rule-based decision-making (MRDM) approach that integrates a rule-based technique [i.e., the fuzzy rough set theory (FRST) with particle swarm optimization (PSO)] into MCDM (i.e., DEMATEL, DANP, and modified-VIKOR) techniques that can help decision makers choose the optimal model necessary for achieving aspiration-level effects in a risk control strategy. The results indicate that the improvement priority, which runs in the order as (a) AI algorithm model, (c) AI regulatory and compliance, (d) AI conduct, and (b) AI technology based on the magnitude of the impact, can effectively improve the performance of AI-driven risk management for financial service firms.

Applied Rough Set Logics for Multi-Criteria Decision Analysis in Stock Index Volatility Projection

2011 ◽  
Vol 14 (04) ◽  
pp. 715-735
Author(s):  
Wen-Rong Jerry Ho
Keyword(s):  
Decision Making ◽  
Set Theory ◽  
Rough Set ◽  
Rough Set Theory ◽  
Decision Rules ◽  
Multiple Criteria Decision Making ◽  
Stock Index ◽  
Rule Based ◽  
Set Up ◽  
Decision Making Model

The main purpose of this paper is to advocate a rule-based forecasting technique for anticipating stock index volatility. This paper intends to set up a stock index indicators projection prototype by using a multiple criteria decision making model consisting of the cluster analysis (CA) technique and Rough Set Theory (RST) to select the important attributes and forecast TSEC Capitalization Weighted Stock Index. The projection prototype was then released to forecast the stock index in the first half of 2009 with an accuracy of 66.67%. The results point out that the decision rules were authenticated to employ in forecasting the stock index volatility appropriately.

Research on the Consumer Demand of Decision Making in the E-Commence System Building Process

2011 ◽  
Vol 71-78 ◽  
pp. 2895-2898
Author(s):  
Jian Min Xie ◽  
Qin Qin
Keyword(s):  
Decision Making ◽  
Rough Set ◽  
Consumer Satisfaction ◽  
Rough Set Theory ◽  
Consumer Demand ◽  
Successful Implementation ◽  
Business Decision ◽  
Building Process ◽  
Demand Reduction ◽  
The Impact

In the process of developing e-commerce system, enterprises are able to accurately understand and grasp the needs of the user enterprise that is the key to the successful implementation of e-commerce. Based on this, the article proposed a new method which was based on the process of developing consumer demand for e-business decision-making though a rough set theory. This new approach is built using rough set decision model to calculate the different needs of the impact on consumer satisfaction, come to an important degree of each demand and the demand reduction order. This method overcomes the traditional rough set method cumbersome bottlenecks, and helps operating; cases studies show that the proposed method is simple and effective.

scholarly journals Identifying Decisive Socio-Political Sustainability Barriers in the Supply Chain of Banking Sector in India: Causality Analysis Using ISM and MICMAC

Mathematics ◽  
2021 ◽  
Vol 9 (3) ◽  
pp. 240
Author(s):  
Wen-Kuo Chen ◽  
Venkateswarlu Nalluri ◽  
Man-Li Lin ◽  
Ching-Torng Lin
Keyword(s):  
Supply Chain ◽  
Banking Sector ◽  
Matrix Multiplication ◽  
Financial Service ◽  
Assessment Process ◽  
Service Firms ◽  
Fuzzy Delphi ◽  
Political Sustainability ◽  
Improvement Programs ◽  
Financial Service Firms

The banking sector often plays a crucial role in the improvement of infrastructure and economy of any country. In many emerging economies, it is apparent that a wide variety of social and political issues are related to the associated supply chain sustainability of financial service firms. Although such sustainability and its implementation issues have largely been addressed in existing research literature and in practice for many years, the attention towards socio-political sustainability aspects has been quite limited. Thus, this study attempted to explore the determinants for improving socio-political sustainability in financial service firms. Through adopting the fuzzy Delphi method (FDM), performing an exhaustive literature review, and conducting semi-structured interviews with the decision-makers of the service firms, nine key barriers for socio-political sustainability were first identified in this study. Then, the influence relationships of the key barriers were assessed by 15 experts. During the assessment process, the interrelationships and their dependence powers among key barriers were analyzed using the interpretive structural modelling (ISM) approach and cross-impact matrix multiplication applied to classification (MICMAC) methods. The assessment results show that among the studied barriers, “antisocial considerations”, “unstable political climate”, and “lack of political coherence” are the decisive barriers that affect the socio-political sustainability in the supply chain of financial service firms. The knowledge in understanding and reducing these decisive barriers can provide service sector practitioners, especially those with limited resources, the enhanced capability to conduct better planning and designing of effective and continuous improvement programs, so as to win over new consumers and retain existing clients by offering sustainable services.

Risk disclosure and risk governance characteristics: evidence from a developing economy

2020 ◽  
Vol 28 (4) ◽  
pp. 577-605 ◽  
Author(s):  
Shamsun Nahar ◽  
Mohammad Istiaq Azim ◽  
Md Moazzem Hossain
Keyword(s):  
Risk Management ◽  
Developed Countries ◽  
Business Environment ◽  
International Standards ◽  
Risk Governance ◽  
Developing Economy ◽  
Risk Disclosure ◽  
Content Type ◽  
Governance Practices ◽  
The Impact

Purpose The purpose of this paper is to explore to what extent risk disclosure is associated with banks’ governance characteristics. The research also focuses on how the business environment and culture may create a bank’s awareness of risk management and its disclosure. This study is conducted in a setting where banks are not mandated to follow international standards for their risk disclosures. Design/methodology/approach Using 300 bank-year observations comprising hand-collected private commercial bank data, the study uses regression analysis to investigate the influence of risk governance characteristics on risk disclosure. Findings This paper reports a positive relationship between risk disclosure and banks’ governance characteristics, such as the presence of various risk committees and a risk management unit. Practical implications Because studies are lacking on risk disclosure and risk governance conducted in developing countries, it is expected that this research will make a significant contribution to the literature and provide a foundation for further research in this field. Social implications This study complements the corporate governance literature, more specifically the risk governance literature, by incorporating agency theory, institutional theory and proprietary cost theory to provide robust evidence of the impact of risk governance practices in the context of a developing economy. Originality/value Previous studies on risk disclosure and governance determinants primarily involve developed countries. This paper’s contribution is to examine risk disclosure and risk governance characteristics in a developing country in which reporting according to international standards is effectively voluntary.

scholarly journals Marketing Islamic Financial Services: A Review, Critique, and Agenda for Future Research

2020 ◽  
Vol 13 (1) ◽  
pp. 12 ◽  
Author(s):  
Intekhab Alam ◽  
Pouya Seifzadeh
Keyword(s):  
Financial Services ◽  
Financial Service ◽  
Islamic Finance ◽  
Future Research ◽  
Islamic Banking ◽  
Service Firms ◽  
Main Research ◽  
Research Themes ◽  
Nuanced Understanding ◽  
Financial Service Firms

Islamic finance has experienced rapid growth globally, surpassing the USD 2 trillion mark in 2017. As a result, the literature related to Islamic finance and banking is rather rich. Despite the richness of the literature, our knowledge of the marketing issues related to Islamic finance is modest and somewhat ambiguous. Therefore, we review several decades of research about the Islamic finance in various parts of the world. We identify and discuss three main research themes that draw on different conceptualization and theoretical lenses. After synthesizing their respective findings, we propose several avenues for future research that integrate these three research themes with the goal of developing a more nuanced understanding of Islamic finance and its marketing. While we believe that our review will mainly serve as a crucial reinvigoration and launch point for future research on Islamic finance marketing, it is also of great practical benefit for policymakers of various countries and especially managers of financial service firms interested in marketing Islamic banking and financial services to their customers.

Sign in / Sign up

Export Citation Format

Share Document