Application of artificial intelligence method in credit risk evaluation

This master work describes the most widely used artificial intelligence methods and the possibilities to apply them in credit risk evaluation which is one of the most important fields in banking and in finance. The main problem here is to evaluate the risk arising when a creditor gives a credit to a particular individual or an enterprise, using various mathematical, statistical or other methods and techniques. This risk arises when the debtor isn’t able to pay for the loan to the creditor in time which means additional loss. It can appear in many forms depending on the type of debtor (individ-ual, enterprise, government of an abroad country) and type of financial instrument or action that is done with it (giving of a loan, transactions of financial derivatives, etc.), this is the reason why fi-nancial institutions and for it’s evaluation and management use various different methodologies which comprise a lot of methods and techniques from credit scoring (evaluating by a particular formula, usually linear) and evaluating different factors, like management and business strategies or policies, to classification by various criterions by using modern and sophisticated methods, either algebraic, either artificial intelligence and machine learning. This field is widely researched and many new techniques are being found. The research here is concentrated mainly on Support Vector Machines (abbr. SVM) which is one of the most popular artificial intelligence and machine learning techniques and whose effectiveness has been widely proved. This research is done in order to investigate the possibilities to adapt SVM method to the problem described above, and to implement a system which uses one of SVM techniques