ANovelPredictionModelforCreditCardRiskManagement.pptVIP

A Novel Prediction Model for Credit Card Risk Management Tsung-Nan Chou Department of Finance, Chaoyang University of Technology168 Jifong E. Rd., Wufong Township, Taichung County, 41349, TaiwanE-mail: tnchou@mail.cyut.edu.tw Outline Introduction Integrated Model Research Methodologies Evolutional neural network Grey incidence analysis Dempster-Shafer theory Experiment Results Conclusion Introduction Credit Card Business in Taiwan The severe competition of credit card market in Taiwan. The amount of issued credit cards has increased rapidly and is sixteen times the size of the past decade issues The annual amount of credit has also growth 9.54 times. Introduction The Truths of Applying Credit Card Everyone is easy to apply for the credit cards. One existed card applied for another cards without verification in promotion campaign. Platinum card holders are everywhere in Taiwan. Most financial institutions focus on the prior process of credit card verification instead of the posterior process of the risk management after cards issued. Introduction What the Card Issuers Need ? Credit risk management is critical safeguard against the possible losses. A credit risk management alert system will be able to freeze the credit usage or to reject the on-going transaction and to prevent the potential bad debts over the credit limit. Banking industrial need to construct an efficient credit risk prediction system to detect the default of card holders correctly. Introduction Research Work in Credit Assessment Some researches applied trandional statistic regression models such as Orgler(1970) Steenackers＆Goovaerts (1989) Many method in statistics ,such as regression analysis ,variance analysis and principal component require a large amount of samples and satisfy certain probability distribution. Recent studies use Artificial Intelligence (AI) methods for credit assessment. Neural network is the more recently in support of both business and financial applications. Many