A Model Augmenting Credit Risk Management in the Banking Industry

2020 ◽  
pp. 123-143
Author(s):  
Okuthe Paul Kogeda ◽  
Nicknolt N. Vumane
Keyword(s):  
Neural Network ◽  
Credit Risk ◽  
Banking Industry ◽  
Wide Spectrum ◽  
Back Propagation ◽  
Back Propagation Algorithm ◽  
Credit Risk Management ◽  
Credit Risks ◽  
Using Data ◽  
Risk Measurements

A lack of reliable credit risk measurements and poor control of credit risks has caused massive financial losses across a wide spectrum of business. Financial institutions like banks have not been able to control and contain the rapid increases of the credit defaulting. In this paper, we address the credit lending challenges by eliminating credit defaulting faced by the banking industry. Data from bank of previously accepted and rejected loan applicants was used to construct a credit risk evaluation network. The artificial neural network technique with back-propagation algorithm was applied to develop a model that supports the banks in the credit granting decision-making. The model was trained to categorize applicants as either good (credit granted) or bad (credit denied) based on the credit record. The model was able to predict whether a particular applicant is likely or unlikely to repay the credit. The training of neural network model and validation testing was done using data obtained from the bank. The results show a greater performance, classification and prediction accuracy.

A Model Augmenting Credit Risk Management in the Banking Industry

2017 ◽  
Vol 8 (4) ◽  
pp. 47-65 ◽  
Author(s):  
Okuthe Paul Kogeda ◽  
Nicknolt N. Vumane
Keyword(s):  
Neural Network ◽  
Credit Risk ◽  
Banking Industry ◽  
Wide Spectrum ◽  
Back Propagation ◽  
Back Propagation Algorithm ◽  
Credit Risk Management ◽  
Credit Risks ◽  
Using Data ◽  
Risk Measurements

A lack of reliable credit risk measurements and poor control of credit risks has caused massive financial losses across a wide spectrum of business. Financial institutions like banks have not been able to control and contain the rapid increases of the credit defaulting. In this paper, we address the credit lending challenges by eliminating credit defaulting faced by the banking industry. Data from bank of previously accepted and rejected loan applicants was used to construct a credit risk evaluation network. The artificial neural network technique with back-propagation algorithm was applied to develop a model that supports the banks in the credit granting decision-making. The model was trained to categorize applicants as either good (credit granted) or bad (credit denied) based on the credit record. The model was able to predict whether a particular applicant is likely or unlikely to repay the credit. The training of neural network model and validation testing was done using data obtained from the bank. The results show a greater performance, classification and prediction accuracy.

Credit risk management of Ghanaian listed banks

2016 ◽  
Vol 58 (2) ◽  
pp. 162-178 ◽  
Author(s):  
Michelle Ayog-Nying Apanga ◽  
Kingsley Opoku Appiah ◽  
Joseph Arthur
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Management Practices ◽  
Banking Sector ◽  
Banking Industry ◽  
Credit Risk Management ◽  
Structured Interviews ◽  
Content Type ◽  
Credit Risks ◽  
Commercial Loans

Purpose – The study aims to assess credit risk management practices within financial institutions in Ghana. Specifically, the study compares credit risk management practices of listed banks in Ghana with Basel II (1999). Design/methodology/approach – The analysis is based on data gathered from varied sources, namely, use of questionnaires, analysis of internal credit policies and procedure manuals and semi-structured interviews and discussions with credit risk managers of the selected banks in May 2007 and October 2014. Findings – Overall, the credit risk management practices within listed banks in Ghana are in line with sound practices. The only dissimilarity, however, is the role of the board of directors in defining acceptable types of loans and maximum maturities for the various types of loans. The listed banks in Ghana are also exposed to credit risks associated with granting both corporate and small business commercial loans and the use of collaterals to mitigate their credit risk exposures. Practical implications – Banks in Ghana should consider developing the skills of all their personnel and appropriately motivating those involved in the credit risk management processes to ensure that they carry out this process efficiently. Originality/value – Research into credit risk management in the banking industry from the Ghanaian perspective remains scant. This study is, therefore, timely, and its findings are invaluable for the efficient management of credit risk in the banking industry. This study provides policy recommendations which will enhance shareholder value and, in this way, contribute to greater stability in the banking sector in developing countries, in particular.

scholarly journals Deep neural networks using a single neuron: folded-in-time architecture using feedback-modulated delay loops

2021 ◽  
Vol 12 (1) ◽  
Author(s):  
Florian Stelzer ◽  
André Röhm ◽  
Raul Vicente ◽  
Ingo Fischer ◽  
Serhiy Yanchuk
Keyword(s):  
Neural Network ◽  
Neural Networks ◽  
Deep Neural Network ◽  
Single Neuron ◽  
Deep Neural Networks ◽  
Back Propagation ◽  
Local Network ◽  
Multiple Time ◽  
Learning Tools ◽  
Back Propagation Algorithm

AbstractDeep neural networks are among the most widely applied machine learning tools showing outstanding performance in a broad range of tasks. We present a method for folding a deep neural network of arbitrary size into a single neuron with multiple time-delayed feedback loops. This single-neuron deep neural network comprises only a single nonlinearity and appropriately adjusted modulations of the feedback signals. The network states emerge in time as a temporal unfolding of the neuron’s dynamics. By adjusting the feedback-modulation within the loops, we adapt the network’s connection weights. These connection weights are determined via a back-propagation algorithm, where both the delay-induced and local network connections must be taken into account. Our approach can fully represent standard Deep Neural Networks (DNN), encompasses sparse DNNs, and extends the DNN concept toward dynamical systems implementations. The new method, which we call Folded-in-time DNN (Fit-DNN), exhibits promising performance in a set of benchmark tasks.

scholarly journals Using Artificial Neural Networks in Predicting the Level of Stress among Military Conscripts

Mathematics ◽  
2021 ◽  
Vol 9 (6) ◽  
pp. 626
Author(s):  
Svajone Bekesiene ◽  
Rasa Smaliukiene ◽  
Ramute Vaicaitiene
Keyword(s):  
Neural Network ◽  
Transfer Functions ◽  
Back Propagation ◽  
Armed Forces ◽  
Activation Function ◽  
Optimal Number ◽  
Ann Model ◽  
Back Propagation Algorithm ◽  
Classification Rate ◽  
Artificial Neural

The present study aims to elucidate the main variables that increase the level of stress at the beginning of military conscription service using an artificial neural network (ANN)-based prediction model. Random sample data were obtained from one battalion of the Lithuanian Armed Forces, and a survey was conducted to generate data for the training and testing of the ANN models. Using nonlinearity in stress research, numerous ANN structures were constructed and verified to limit the optimal number of neurons, hidden layers, and transfer functions. The highest accuracy was obtained by the multilayer perceptron neural network (MLPNN) with a 6-2-2 partition. A standardized rescaling method was used for covariates. For the activation function, the hyperbolic tangent was used with 20 units in one hidden layer as well as the back-propagation algorithm. The best ANN model was determined as the model that showed the smallest cross-entropy error, the correct classification rate, and the area under the ROC curve. These findings show, with high precision, that cohesion in a team and adaptation to military routines are two critical elements that have the greatest impact on the stress level of conscripts.

COMPUTING AN ADAPTIVE MESH IN FLUID PROBLEMS USING NEURAL NETWORK AND GENETIC ALGORITHM WITH ADAPTIVE RELAXATION

2008 ◽  
Vol 17 (06) ◽  
pp. 1089-1108 ◽  
Author(s):  
NAMEER N. EL. EMAM ◽  
RASHEED ABDUL SHAHEED
Keyword(s):  
Neural Network ◽  
Genetic Algorithm ◽  
Numerical Experiments ◽  
Back Propagation ◽  
Adaptive Mesh ◽  
Learning System ◽  
Back Propagation Algorithm ◽  
Adaptive Smoothing ◽  
Different Types ◽  
Optimal Values

A method based on neural network with Back-Propagation Algorithm (BPA) and Adaptive Smoothing Errors (ASE), and a Genetic Algorithm (GA) employing a new concept named Adaptive Relaxation (GAAR) is presented in this paper to construct learning system that can find an Adaptive Mesh points (AM) in fluid problems. AM based on reallocation scheme is implemented on different types of two steps channels by using a three layer neural network with GA. Results of numerical experiments using Finite Element Method (FEM) are discussed. Such discussion is intended to validate the process and to demonstrate the performance of the proposed learning system on three types of two steps channels. It appears that training is fast enough and accurate due to the optimal values of weights by using a few numbers of patterns. Results confirm that the presented neural network with the proposed GA consistently finds better solutions than the conventional neural network.

Study on the Generalized Holo-Factors Mathematical Model of Dimension-Error and Shape-Error for Sheet Metal in Stamping Based on the Back Propagation (BP) Neural Network

2016 ◽  
Vol 138 (6) ◽  
Author(s):  
Lizhi Gu ◽  
Tianqing Zheng
Keyword(s):  
Neural Network ◽  
Mathematical Model ◽  
Sheet Metal ◽  
Bp Neural Network ◽  
Back Propagation ◽  
Shape Error ◽  
Back Propagation Algorithm ◽  
Minor Strain ◽  
Major Strain ◽  
Forming Precision

Precision improvement in sheet metal stamping has been the concern that the stamping researchers have engaged in. In order to improve the forming precision of sheet metal in stamping, this paper devoted to establish the generalized holo-factors mathematical model of dimension-error and shape-error for sheet metal in stamping based on BP neural network. Factors influencing the forming precision of stamping sheet metal were divided, altogether ten factors, and the generalized holo-factors mathematical model of dimension-error and shape-error for sheet metal in stamping was established using the back-propagation algorithm of error based on BP neural network. The undetermined coefficients of the model previously established were soluble according to the simulation data of sheet punching combined with the specific shape based on the BP neural network. With this mathematical model, the forecast data compared with the validate data could be obtained, so as to verify the fine practicability that the previously established mathematical model had, and then, it was shown that the generalized holo-factors mathematical model of size error and shape-error had fine practicality and versatility. Based on the generalized holo-factors mathematical model of error exemplified by the cylindrical parts, a group of process parameters could be selected, in which forming thickness was between 0.713 mm and 1.335 mm, major strain was between 0.085 and 0.519, and minor strain was between −0.596 and 0.319 from the generalized holo-factors mathematical model prediction, at the same time, the forming thickness, the major strain, and the minor strain were in good condition.

Research of the 3-DOF Helicopter System Based on Adaptive Inverse Control

2013 ◽  
Vol 389 ◽  
pp. 623-631 ◽  
Author(s):  
Xiu Yan Wang ◽  
Ying Wang ◽  
Zong Shuai Li
Keyword(s):  
Neural Network ◽  
Flight Control ◽  
Fuzzy Inference ◽  
Reference Model ◽  
Back Propagation ◽  
Back Propagation Algorithm ◽  
Actual System ◽  
Adaptive Inverse Control ◽  
Inverse Control ◽  
Network Connection

For the flight control problem occurred in 3-DOF Helicopter System, reference adaptive inverse control scheme based on Fuzzy Neural Network model is designed. Firstly, fuzzy inference process of identifier and controller is achieved by using the network structure. Meanwhile, the neural network connection weights are used to express parameters of fuzzy inference. Then, back-propagation algorithm is adopted to amend the network connection weights in order to automatically identify the fuzzy model and adjust its membership functions and parameters, so that the actual system output of adaptive inverse controller control which is adjusted can track the reference model output. Finally, the simulation result of 3-DOF Helicopter System based on the scheme shows that the method is effective and feasible.

Test on Flood Prediction-Model Using Artificial Neural Network for ShiiLiAn Hydrologic Station on MinChiang,China

2010 ◽  
Vol 39 ◽  
pp. 555-561 ◽  
Author(s):  
Qing Hua Luan ◽  
Yao Cheng ◽  
Zha Xin Ima
Keyword(s):  
Neural Network ◽  
Artificial Neural Network ◽  
Flood Control ◽  
Back Propagation ◽  
Forecast Model ◽  
Flood Forecast ◽  
Back Propagation Algorithm ◽  
Nonlinear Method ◽  
Flood Prediction ◽  
Artificial Neural

The establishing of a precise simulation model for runoff prediction in river with several tributaries is the difficulty of flood forecast, which is also one of the difficulties in hydrologic research. Due to the theory of Artificial Neural Network, using Back Propagation algorithm, the flood forecast model for ShiLiAn hydrologic station in Minjiang River is constructed and validated in this study. Through test, the result shows that the forecast accuracy is satisfied for all check standards of flood forecast and then proves the feasibility of using nonlinear method for flood forecast. This study provides a new method and reference for flood control and water resources management in the local region.

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