Explainable Artificial Intelligence Credit Risk Assessment using Machine Learning

This paper presents an intelligent and transparent AI-driven system for Credit Risk Assessment using three state-of-the-art ensemble machine learning models combined with Explainable AI (XAI) techniques. The system leverages XGBoost, LightGBM, and Random Forest algorithms for predictive analysis of loan default risks, addressing the challenges of model interpretability using SHAP and LIME. Preprocessing steps include custom imputation, one-hot encoding, and standardization. Class imbalance is managed using SMOTE, and hyperparameter tuning is performed with GridSearchCV. The model is evaluated on multiple performance metrics including ROC-AUC, precision, recall, and F1-score. LightGBM emerges as the most business-optimal model with the highest accuracy and best trade off between approval and default rates. Furthermore, the system generates applicant-specific XAI visual reports and business impact summaries to ensure transparent decision-making.

Rethinking the Relationship between Recurrent and Non-Recurrent Neural Networks: A Study in Sparsity

Neural networks (NN) can be divided into two broad categories, recurrent and non-recurrent. Both types of neural networks are popular and extensively studied, but they are often treated as distinct families of machine learning algorithms. In this position paper, we argue that there is a closer relationship between these two types of neural networks than is normally appreciated. We show that many common neural network models, such as Recurrent Neural Networks (RNN), Multi-Layer Perceptrons (MLP), and even deep multi-layer transformers, can all be represented as iterative maps. The close relationship between RNNs and other types of NNs should not be surprising. In particular, RNNs are known to be Turing complete, and therefore capable of representing any computable function (such as any other types of NNs), but herein we argue that the relationship runs deeper and is more practical than this. For example, RNNs are often thought to be more difficult to train than other types of NNs, with RNNs being plagued by issues such as vanishing or exploding gradients. However, as we demonstrate in this paper, MLPs, RNNs, and many other NNs lie on a continuum, and this perspective leads to several insights that illuminate both theoretical and practical aspects of NNs.