Real-Time Credit Monitoring and Scoring Systems Powered by Artificial Intelligence

Abstract

This paper presents an effective real-time credit monitoring and scoring system using AI. As the financial industry embraces AI, most user credit monitoring systems require a major time investment. This paper designed the cluster structure and temporal analysis to allow for real-time and fine granularity scoring and monitoring while also addressing user bewilderment in behavioral learning. The proposed architecture is widely adjustable. Financial institutions can adjust the degree of AI sophistication and tailor monitoring needs, such as benefit/harm control. The comprehensive system is validated in multiple aspects, including a 97.91% accuracy and low deviation in a case study.
Credit risk scoring plays a crucial role in the credit lifecycle. Consumers need to understand how banks assess their creditworthiness and what factors to focus on. Similarly, financial institutions need to review the factors used by rating companies for stock ratings. Currently, most banks may only provide users with one static score. However, previous studies have shown that users would be better off if they could access disclosures similar to those provided by rating companies to investors regarding firm performance. While there are some commercial services that provide consumer monitoring capabilities, this usually requires a major time investment on the user’s behalf. A user spends substantial amounts of time every month looking at their score and piecing together a list of do’s and don’ts. They do not quite understand how the changes in their score implicate their creditworthiness and how the lender evaluates them. They find it more beneficial to understand behavioral learning rather than just getting a score. The situation is similar for very small enterprises that have just had formal credit. They do not know enough about this new service and find it bewildering. This work involves a comprehensive credit monitoring, scoring, and explanation system powered by AI.