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Local Interpretable Model-Agnostic Explanations (LIME) is a popular method to perform interpretability of any kind of Machine Learning (ML) model. It explains one ML prediction at a time, by learning a simple linear model around the…

Machine Learning · Computer Science 2022-02-09 Giorgio Visani , Enrico Bagli , Federico Chesani

The use of credit cards has recently increased, creating an essential need for credit card assessment methods to minimize potential risks. This study investigates the utilization of machine learning (ML) models for credit card default…

Machine Learning · Computer Science 2023-10-17 Anas Arram , Masri Ayob , Musatafa Abbas Abbood Albadr , Alaa Sulaiman , Dheeb Albashish

Machine learning is used more and more often for sensitive applications, sometimes replacing humans in critical decision-making processes. As such, interpretability of these algorithms is a pressing need. One popular algorithm to provide…

Machine Learning · Computer Science 2020-01-14 Damien Garreau , Ulrike von Luxburg

Credit scoring is vital in the financial industry, assessing the risk of lending to credit card applicants. Traditional credit scoring methods face challenges with large datasets and data imbalance between creditworthy and non-creditworthy…

Computational Engineering, Finance, and Science · Computer Science 2024-09-26 Kejian Tong , Zonglin Han , Yanxin Shen , Yujian Long , Yijing Wei

Since the 1990s, there have been significant advances in the technology space and the e-Commerce area, leading to an exponential increase in demand for cashless payment solutions. This has led to increased demand for credit cards, bringing…

Risk Management · Quantitative Finance 2021-10-06 K. S. Naik

Credit assessments activities are essential for financial institutions and allow the global economy to grow. Building robust, solid and accurate models that estimate the probability of a default of a company is mandatory for credit…

Machine Learning · Computer Science 2021-03-16 Ayoub El Qadi , Natalia Diaz-Rodriguez , Maria Trocan , Thomas Frossard

Automated decision making is used routinely throughout our everyday life. Recommender systems decide which jobs, movies, or other user profiles might be interesting to us. Spell checkers help us to make good use of language. Fraud detection…

Machine Learning · Computer Science 2020-07-15 Alexander Jung , Pedro H. J. Nardelli

The successful application of machine learning (ML) methods becomes increasingly dependent on their interpretability or explainability. Designing explainable ML systems is instrumental to ensuring transparency of automated decision-making…

Machine Learning · Computer Science 2022-07-04 L. Zhang , G. Karakasidis , A. Odnoblyudova , L. Dogruel , A. Jung

Explainable machine learning (XML) has emerged as a major challenge in artificial intelligence (AI). Although black-box models such as Deep Neural Networks and Gradient Boosting often exhibit exceptional predictive accuracy, their lack of…

Methodology · Statistics 2024-06-18 Evgenii Kuriabov , Jia Li

Machine learning is currently undergoing an explosion in capability, popularity, and sophistication. However, one of the major barriers to widespread acceptance of machine learning (ML) is trustworthiness: most ML models operate as black…

In recent years, the use of sophisticated statistical models that influence decisions in domains of high societal relevance is on the rise. Although these models can often bring substantial improvements in the accuracy and efficiency of…

Machine Learning · Computer Science 2021-04-13 Alfredo Carrillo , Luis F. Cantú , Alejandro Noriega

The lack of transparency in the decision-making processes of deep learning systems presents a significant challenge in modern artificial intelligence (AI), as it impairs users' ability to rely on and verify these systems. To address this…

Artificial Intelligence · Computer Science 2024-11-18 David Debot , Pietro Barbiero , Francesco Giannini , Gabriele Ciravegna , Michelangelo Diligenti , Giuseppe Marra

Due to the powerful learning ability on high-rank and non-linear features, deep neural networks (DNNs) are being applied to data mining and machine learning in various fields, and exhibit higher discrimination performance than conventional…

Machine Learning · Computer Science 2023-02-21 Weiyu Guo , Zhijiang Yang , Shu Wu , Fu Chen

Lending decisions are usually made with proprietary models that provide minimally acceptable explanations to users. In a future world without such secrecy, what decision support tools would one want to use for justified lending decisions?…

Machine Learning · Computer Science 2021-06-07 Chaofan Chen , Kangcheng Lin , Cynthia Rudin , Yaron Shaposhnik , Sijia Wang , Tong Wang

Effective credit risk management is fundamental to financial decision-making, requiring robust models to predict default probabilities and classify financial entities. Traditional machine learning approaches face significant challenges when…

Machine Learning · Computer Science 2026-03-31 Haibo Wang , Jun Huang , Lutfu S. Sua , Figen Balo , Burak Dolar

As black-box machine learning models grow in complexity and find applications in high-stakes scenarios, it is imperative to provide explanations for their predictions. Although Local Interpretable Model-agnostic Explanations (LIME) [22] is…

Machine Learning · Computer Science 2023-11-28 Zeren Tan , Yang Tian , Jian Li

Machine learning models used for high-stakes predictions in domains like credit risk face critical degradation due to concept drift, requiring robust and transparent adaptation mechanisms. We propose an architecture, where a dedicated…

Risk Management · Quantitative Finance 2025-10-31 Dmitry Lesnik , Tobias Schaefer

For applications of machine learning in critical decisions, explainability is a primary concern, and often a regulatory requirement. Local linear methods for generating explanations, such as LIME and SHAP, have been criticized for being…

Machine Learning · Computer Science 2026-03-25 Joseph L. Breeden

Modern data analytics underpinned by machine learning techniques has become a key enabler to the automation of data-led decision making. As an important branch of state-of-the-art data analytics, business process predictions are also faced…

Artificial Intelligence · Computer Science 2021-07-22 Chun Ouyang , Renuka Sindhgatta , Catarina Moreira

The application of machine learning to support the processing of large datasets holds promise in many industries, including financial services. However, practical issues for the full adoption of machine learning remain with the focus being…

Machine Learning · Computer Science 2021-05-14 Ismini Psychoula , Andreas Gutmann , Pradip Mainali , S. H. Lee , Paul Dunphy , Fabien A. P. Petitcolas