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

Finding the optimal capital structure

Now, we can start analyzing how much equity and debt capital we should raise in the capital market to support demand (new projects and businesses or by replacing existing machinery that is worn out or obsolete) and supply (generated from profit). Our projection of optimal capital structure is time-bound; that is, it concerns the optimal mix for a given period, such as the next year. We can certainly expand it to cover the next 5 years. The formula used to forecast business performance is as follows:

Revenue growth * Fixed Capital Required / Sales

The optimal capital structure is the capital structure that delivers the lowest possible cost of funding but delivers the required capital to generate values within the firm.

Implementation steps

In this section, we will learn how to implement a machine learning model that can find the optimal capital structure that delivers the lowest possible cost...