Book Image

Hands-On Artificial Intelligence for Banking

By : Jeffrey Ng, Subhash Shah
Book Image

Hands-On Artificial Intelligence for Banking

By: Jeffrey Ng, Subhash Shah

Overview of this book

Remodeling your outlook on banking begins with keeping up to date with the latest and most effective approaches, such as artificial intelligence (AI). Hands-On Artificial Intelligence for Banking is a practical guide that will help you advance in your career in the banking domain. The book will demonstrate AI implementation to make your banking services smoother, more cost-efficient, and accessible to clients, focusing on both the client- and server-side uses of AI. You’ll begin by understanding the importance of artificial intelligence, while also gaining insights into the recent AI revolution in the banking industry. Next, you’ll get hands-on machine learning experience, exploring how to use time series analysis and reinforcement learning to automate client procurements and banking and finance decisions. After this, you’ll progress to learning about mechanizing capital market decisions, using automated portfolio management systems and predicting the future of investment banking. In addition to this, you’ll explore concepts such as building personal wealth advisors and mass customization of client lifetime wealth. Finally, you’ll get to grips with some real-world AI considerations in the field of banking. By the end of this book, you’ll be equipped with the skills you need to navigate the finance domain by leveraging the power of AI.
Table of Contents (14 chapters)
Section 1: Quick Review of AI in the Finance Industry
Section 2: Machine Learning Algorithms and Hands-on Examples
Using Features and Reinforcement Learning to Automate Bank Financing

Commercial banks make money by earning interest on money that was loaned to borrowers. In many cases, the loan becomes a Non-Performing Asset (NPA) for the bank. There are instances where the borrower could go bankrupt, leaving the bank with a loss. In such situations, it becomes critical for commercial banks to assess the borrower's ability to repay the loan in a timely manner.

Now, if we look at this scenario closely, we realize that every loan is funded by the money deposited by other customers. Thus, the commercial bank owes interest to the depositor for the money deposited for a time period. This is usually the interest on the depositor's money that is credited by the banks on a quarterly basis. The bank also profits if it charges the borrower more interest and pays a low interest to the depositor.

In this chapter, we will derive...