Credit Risk Evaluation Using Cycle Reservoir Neural Networks with Support Vector Machines Readout

Valley-loss regular simplex support vector machine for robust multiclass classification

To better prevent the potential risks in Internet-based Supply Chain Financing (SCF) products, this paper optimizes and evaluates the Internet-based SCF-oriented Credit Risk Evaluation (CRE) method. Firstly, this paper summarizes 12 risk factors of SCF business, establishes a Risk Assessment Index System (RAIS) with good consistency and stability; then, the principles of Backpropagation (BP) Neural Network (NN) is expounded together with Support Vector Machines (SVM) and Genetic Algorithm (GA) model. Consequently, a CRE model is implemented by the NN tools in MATLAB based on the collection of multiple groups of SCF-oriented risk assessment samples. Subsequently, the assessment samples are trained and tested. Finally, the SCF-oriented CRE model is proposed and verified. The results show that the BP-GA model has presented high prediction consistency with the actual classification. According to the comparison of classification results of SVM, BP model, and BP-GA model, the classification accuracy of test samples of the proposed Internet-based SCF-oriented CRE system using BP-GA model reaches 97.19%; the Type I and Type II error rate of the CRE system based on BP-GA model is 7.2% and 14.21%, respectively. Therefore, a suitable SCF-oriented CRE method is put forward for China’s commercial banks along with scientific and feasible suggestions to manage SCF-oriented credit risks more reasonably and effectively.

The Sixth International Symposium on Neural Networks (ISNN 2009)

Credit risk evaluation has become an increasingly important field in financial risk management for financial institutions, especially for banks and credit card companies. Many data mining and statistical methods have been applied to this field. Extreme learning machine (ELM) classifier as a type of generalized single hidden layer feed-forward networks has been used in many applications and achieve good classification accuracy. Thus, we use ELM (kernel based) as a classification tool to perform the credit risk evaluation in this paper. The simulations are done on two credit risk evaluation datasets with three different kernel functions. Simulation results show that the kernel based ELM is more suitable for credit risk evaluation than the popular used Support Vector Machines (SVMs) with consideration of overall, good and bad accuracies.

Flooding causes several threats with outcomes which include peril to human and animal life, damage to property, and adversity to agricultural fields. Therefore, flood prediction is of prime importance for reducing loss of life and devastation to property. To model complex nature of hydrologic processes artificial neural network (ANN) tool is effectively being utilized for modelling different nonlinear relationships, and has proved to be an appropriate method for flood prediction. Present study investigated relative accuracy of radial basis function neural network (RBFNN) and support vector machine (SVM) models combined with Firefly Algorithm (FA) in predicting river flood discharge and contrasted with that of regular ANN, RBFNN and SVM models. Monthly river flow data of Silchar and Dholai stations located in Cachar district of Assam, India are utilized for the present study. For assessing model performance, coefficient of determination (R2), mean square error (MSE) and root mean square error (RMSE) were measured. Evaluation of outcomes shows that both RBF-FA (radial basis function - firefly algorithm) and SVM-FA (support vector machine - firefly algorithm) hybrid models give more precise forecasting results than RBFNN, FFBPNN (feed forward back propagation neural network) and SVM models. Yet, it can be observed that SVM-FA model give better forecasting outputs with R2 value 0.9818 than RBF-FA model. Results also reveal that simple SVM model performs marginally better than simple ANN model.

Secondary and academic education is regarded as one of the most significant periods of a student's life, and students must work very hard to succeed and earn good grades. However, there has been a recent rise in the percentage of students failing in many nations, including Portugal, India, and others, achieving long-term economic success requires education. The educational attainment of students has increased during the past few decades. Organizational and company databases have grown exponentially as a result of information technology advancements, sparking interest in business intelligence (BI) and data mining (DM). The wealth of information included in all of this data, including trends and patterns, can be leveraged to enhance decision-making and maximize outcomes. However, human specialists are finite and often miss crucial information. Therefore, an automated tool to evaluate the raw data and extract valuable, highlevel information for the decision-maker is the alternative, so I started Higher education institutions use artificial intelligence-based data mining tools and techniques to help students perform better academically. These tools include data mining algorithms like support vector machines, logistic regression, decision trees, neural networks, and others that can be used with data collected through the Weka program, RapidMiner, and other programs. In this research paper, we will look at previous research on the topic, assessing the advantages and disadvantages of each, and reviewing data collection techniques, methods used for obtaining the best outcomes, and ways to enhance student data

Uniqueness in economies and stock markets has given rise to an interesting domain of exploring data mining techniques across global indices. Previously, very few studies have attempted to compare the performance of data mining techniques in diverse markets. The current study adds to the understanding regarding the variations in performance of data mining techniques across the global stock indices. We compared the performance of Neural Networks and Support Vector Machines using accuracy measures Mean Absolute Error (MAE) and R­­­­oot Mean Square Error (RMSE) across seven major stock markets. For prediction purpose, technical analysis has been employed on selected indicators based on daily values of indices spanning a period of 12 years. We created 196 data sets spanning different time periods for model building such as 1 year, 2 years, 3 years, 4 years, 6 years and 12 years for selected seven stock indices. Based on prediction models built using Neural Networks and Support Vector Machines, the findings of the study indicate there is a significant difference, both for MAE and RMSE, across the selected global indices. Also, Mean Absolute Error and Root Mean Square Error of models built using NN were greater than Mean Absolute Error and Root Mean Square Error of models built using SVM.

Automated classification of magnetic resonance brain images (MRIs) is a hot topic in the field of medical and biomedical imaging. Various methods have been suggested recently to improve this technology. In this paper, to reduce the complexity involved in the medical images and to ameliorate the classification of MRIs, a novel 3D magnetic resonance (MR) brain image classifier using kernel principal component analysis (KPCA) and support vector machines (SVMs) is proposed. Experiments are carried out using A deep multiple kernel SVM (DMK-SVM) and a regular SVM. An algorithm entitled SVM–KPCA is put forward. Its main task is to classify a brain MRI as a normal brain image or as a pathological brain image. This algorithm, firstly, adopts the discrete wavelet transform technique to extract features from images. Secondly, KPCA is applied to decrease the dimensionality of features. SVM is then applied to the reduced data. A K-fold cross-validation strategy is used to avoid overfitting and to ameliorate the generalization of the SVM–KPCA algorithm. Three databases are used to validate the suggested SVM–KPCA method. Three conclusions are obtained from this work. First, KPCA is highly efficient in increasing the classifier’s performance compared with similar algorithms working on the proposed database. Second, the SVM–KPCA algorithm performs well in differentiating between two classes of medical images. Third, the approach is robust and might be utilized for other MRIs. This proposes a significant role for computer aided diagnosis analysis systems used for clinical practice.

The online version contains supplementary material available at 10.1007/s40200-021-00884-2.

Medical diagnosis is a most important problem in medical data mining. The possible errors of a physician can reduce with the help of data mining techniques. The goal of this chapter is to analyze and compare predictive data mining techniques in the medical diagnosis. To this purpose, various data mining techniques such as decision tree, neural networks, support vector machine, and lazy modelling are considered. Results show data mining techniques can considerably help a physician.

Neural networks for credit risk evaluation: Investigation of different neural models and learning schemes

Bond rating is regarded as an important event for measuring financial risk of companies and for determining the investment returns of investors. As a result, it has been a popular research topic for researchers to predict companies' credit ratings by applying statistical and machine learning techniques. The statistical techniques, including multiple regression, multiple discriminant analysis (MDA), logistic models (LOGIT), and probit analysis, have been traditionally used in bond rating. However, one major drawback is that it should be based on strict assumptions. Such strict assumptions include linearity, normality, independence among predictor variables and pre-existing functional forms relating the criterion variablesand the predictor variables. Those strict assumptions of traditional statistics have limited their application to the real world. Machine learning techniques also used in bond rating prediction models include decision trees (DT), neural networks (NN), and Support Vector Machine (SVM). Especially, SVM is recognized as a new and promising classification and regression analysis method. SVM learns a separating hyperplane that can maximize the margin between two categories. SVM is simple enough to be analyzed mathematical, and leads to high performance in practical applications. SVM implements the structuralrisk minimization principle and searches to minimize an upper bound of the generalization error. In addition, the solution of SVM may be a global optimum and thus, overfitting is unlikely to occur with SVM. In addition, SVM does not require too many data sample for training since it builds prediction models by only using some representative sample near the boundaries called support vectors. A number of experimental researches have indicated that SVM has been successfully applied in a variety of pattern recognition fields. However, there are three major drawbacks that can be potential causes for degrading SVM's performance. First, SVM is originally proposed for solving binary-class classification problems. Methods for combining SVMs for multi-class classification such as One-Against-One, One-Against-All have been proposed, but they do not improve the performance in multi-class classification problem as much as SVM for binary-class classification. Second, approximation algorithms (e.g. decomposition methods, sequential minimal optimization algorithm) could be used for effective multi-class computation to reduce computation time, but it could deteriorate classification performance. Third, the difficulty in multi-class prediction problems is in data imbalance problem that can occur when the number of instances in one class greatly outnumbers the number of instances in the other class. Such data sets often cause a default classifier to be built due to skewed boundary and thus the reduction in the classification accuracy of such a classifier. SVM ensemble learning is one of machine learning methods to cope with the above drawbacks. Ensemble learning is a method for improving the performance of classification and prediction algorithms. AdaBoost is one of the widely used ensemble learning techniques. It constructs a composite classifier by sequentially training classifiers while increasing weight on the misclassified observations through iterations. The observations that are incorrectly predicted by previous classifiers are chosen more often than examples that are correctly predicted. Thus Boosting attempts to produce new classifiers that are better able to predict examples for which the current ensemble's performance is poor. In this way, it can reinforce the training of the misclassified observations of the minority class. This paper proposes a multiclass Geometric Mean-based Boosting (MGM-Boost) to resolve multiclass prediction problem. Since MGM-Boost introduces the notion of geometric mean into AdaBoost, it can perform learning process considering the geometric mean-based accuracy and errors of multiclass. This study applies MGM-Boost to the real-world bond rating case for Korean companies to examine the feasibility of MGM-Boost. 10-fold cross validations for threetimes with different random seeds are performed in order to ensure that the comparison among three different classifiers does not happen by chance. For each of 10-fold cross validation, the entire data set is first partitioned into tenequal-sized sets, and then each set is in turn used as the test set while the classifier trains on the other nine sets. That is, cross-validated folds have been tested independently of each algorithm. Through these steps, we have obtained the results for classifiers on each of the 30 experiments. In the comparison of arithmetic mean-based prediction accuracy between individual classifiers, MGM-Boost (52.95%) shows higher prediction accuracy than both AdaBoost (51.69%) and SVM (49.47%). MGM-Boost (28.12%) also shows the higher prediction accuracy than AdaBoost (24.65%) and SVM (15.42%)in terms of geometric mean-based prediction accuracy. T-test is used to examine whether the performance of each classifiers for 30 folds is significantly different. The results indicate that performance of MGM-Boost is significantly different from AdaBoost and SVM classifiers at 1% level. These results mean that MGM-Boost can provide robust and stable solutions to multi-classproblems such as bond rating.

기업의 부도를 예측하는 것은 회계나 재무 분야에서 중요한 연구주제이다. 지금까지 기업 부도예측을 위해 여러 가지 데이터마이닝 기법들이 적용되었으나 주로 단일 모형을 사용함으로서 복잡한 분류 문제에의 적용에 한계를 갖고 있었다. 본 논문에서는 최근에 각광받고 있는 SVM (support vector machine) 모형들을 결합한 앙상블 SVM 모형 (ensemble SVM model)을 부도예측에 사용하고자 한다. 제안된 앙상블 모형은 v-조각 교차 타당성 (v-fold cross-validation)에 의해 얻어진 여러 가지 모형 중에서 성능이 좋은 상위 k개의 단일 모형으로 구성하고 과반수 투표 방식 (majority voting)을 사용하여 미지의 클래스를 분류한다. 본 논문에서 제안된 앙상블 SVM 모형의 성능을 평가하기 위해 실제 기업의 재무비율 자료와 모의실험자료를 가지고 실험하였고, 실험결과 제안된 앙상블 모형이 여러 가지 평가척도 하에서 단일 SVM 모형들보다 좋은 성능을 보임을 알 수 있었다. Corporate bankruptcy prediction has been an important topic in the accounting and finance field for a long time. Several data mining techniques have been used for bankruptcy prediction. However, there are many limits for application to real classification problem with a single model. This study proposes ensemble SVM (support vector machine) model which assembles different SVM models with each different kernel functions. Our ensemble model is made and evaluated by v-fold cross-validation approach. The k top performing models are recruited into the ensemble. The classification is then carried out using the majority voting opinion of the ensemble. In this paper, we investigate the performance of ensemble SVM classifier in terms of accuracy, error rate, sensitivity, specificity, ROC curve, and AUC to compare with single SVM classifiers based on financial ratios dataset and simulation dataset. The results confirmed the advantages of our method: It is robust while providing good performance.

The performances of regular support vector machines and random forests are experimentally compared for hyperspectral imaging land cover classification. Special characteristics of hyperspectral imaging dataset present diverse processing problems to be resolved under robust mathematical formalisms such as image classification. As a result, pixel purity index algorithm is used to obtain endmember spectral responses from Indiana pine hyperspectral image dataset. The generalized reduced gradient optimization algorithm is thereafter executed on the research data to estimate fractional abundances in the hyperspectral image and thereby obtain the numeric values for land cover classification. The Waikato environment for knowledge analysis (WEKA) data mining framework is selected as a tool to carry out the classification process by using support vector machines and random forests classifiers. Results show that performance of support vector machines is comparable to that of random forests. This study makes a positive contribution to the problem of land cover classification by exploring generalized reduced gradient method, support vector machines, and random forests to improve producer accuracy and overall classification accuracy. The performance comparison of these classifiers is valuable for a decision maker to consider tradeoffs in method accuracy versus method complexity.

Smart meter monitoring and data mining techniques for predicting refrigeration system performance