Credit Risk Evaluation in Peer-to-peer Lending With Linguistic Data Transformation and Supervised Learning: -

Jozsef Mezei, Ajay Byanjankar, Markku Heikkilä

    Forskningsoutput: Kapitel i bok/konferenshandlingKonferensbidragVetenskapligPeer review

    11 Citeringar (Scopus)

    Sammanfattning

    The widespread availability of various peer-to-peer lending solutions is rapidly changing the landscape of financial services. Beside the natural advantages over traditional services, a relevant problem in the domain is to correctly assess the risk associated with borrowers. In contrast to traditional financial services industries, in peer-to-peer lending the unsecured nature of loans as well as the relative novelty of the platforms make the assessment of risk a difficult problem. In this article we propose to use traditional machine learning methods enhanced with fuzzy set theory based transformation of data to improve the quality of identifying loans with high likelihood of default. We assess the proposed approach on a real-life dataset from one of the largest peer-to-peer platforms in Europe. The results demonstrate that (i) traditional classification algorithms show good performance in classifying borrowers, and (ii) their performance can be improved using linguistic data transformation

    OriginalspråkOdefinierat/okänt
    Titel på värdpublikationProceedings of the Annual Hawaii International Conference on System Sciences
    FörlagProceedings of the Annual Hawaii International Conference on System Sciences
    Sidor1366–1375
    ISBN (tryckt)978-0-9981331-1-9
    DOI
    StatusPublicerad - 2018
    MoE-publikationstypA4 Artikel i en konferenspublikation
    EvenemangHawaii International Conference on System Sciences - 51st Hawaii International Conference on System Sciences
    Varaktighet: 3 jan. 20186 jan. 2018

    Konferens

    KonferensHawaii International Conference on System Sciences
    Period03/01/1806/01/18

    Nyckelord

    • Classification
    • Finance
    • Fuzzy logic
    • Machine learning
    • Network Analytics
    • Peer-to-peer lending

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