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Saturday, February 22, 2020

Credit Risk Assessment of Bank Customers using DEMATEL and Fuzzy Research Paper - 1

Credit Risk Assessment of Bank Customers using DEMATEL and Fuzzy Expert System - Research Paper Example The research is carried out using data from the Middle East Region of the Asia. Banking has become a necessity to individuals who require safe storage of their financial assets(Bilal,7). Among commercial banking various benefits, some risks are associated with them especially credit risk which requires management for any bank institution to make profits for its stakeholder and investors. Assessment of credit risk is necessary for sustainability of banking institutions especially in the Islamic realm where moral laws such as shari’ah and social justice are adopted in order to preserve customer associations, reasonable dealing, protection and precautions of staff amongst others(Bilal,7). Management of credit involves mitigating the exploitation of the risk, which is applied by including credit scoring models that serve as structures for providing credit to customers. Research has been conducted on how to evaluate credit risk with success factors being evident in the use of GA-based SVM and Rough set theory that provided effectiveness in data mining therefore contributing a positive impact on risk restructuring(Jianguo and Bai, 3). Other studies included credit risk assessment with support vector machines and hybrid neutral systems that resulted in robustness in the use of fuzzy logic in real time applications to solve problems specifically in credit risk management(Shin, Lee and Kim, 130). This paper concentrates on credit risk assessment using Dematel and fuzzy expert systems applying credit scoring models. The objective of this paper is to study consumers’ credit risks that are obtained from previous research that includes financial ratios obtained from banking balance sheets. Rules are used to determine the correlation between consumers’ financial credit risk levels and resultant financial circumstances that is improved by expert decision making that is from filtered financial ratios(Amorim, Vasconcelos and Brasil,

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