Skip to main content

A Study on Techniques of Soft Computing for Handling Traditional Failure in Banks

  • Conference paper
  • First Online:
Smart Technologies in Data Science and Communication

Abstract

Financial turmoil (crisis) is a condition that arises due sudden decline in the nominal value of the financial assets which results in banking panics. Predicting alarming signals of crisis which is financial in nature is a tough assignment as the total economy is based on it for all industries in general and banks in particular. During the panic situation, there is coincides with the recession. The present conceptual paper gives a review of soft computing applications for predicting the crisis condition or bankruptcy which further help in promoting future empirical research to prevent bank failures and financial crises.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 169.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 219.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 219.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

References

  1. https://www.britannica.com/list/5-of-the-worlds-most-devastating-financial-crises

  2. E. Altman, Financial ratios, discriminant analysis, and the prediction of corporate bank-ruptcy. J. Finance 23, 589–609 (1968)

    Article  Google Scholar 

  3. D. Ibrahim, An overview of Soft computing, 12th International Conference on Application of Fuzzy Systems and Soft Computing, ICAFS 2016, pp. 29–30 August 2016, Vienna, Austria, in Procedia Computer Science, vol. 102, Science Direct (Elsevier, 2016), pp. 34–38

    Google Scholar 

  4. R. Falcone, C. Lima, E. Martinelli, Soft computing techniques in structural and earthquake engineering: a literature review. Eng. Struct. 207, 110269 (15 March 2020). https://doi.org/10.1016/j.engstruct.2020.110269

  5. Sayantini, What is fuzzy logic in AI and what are its applications? Published on Dec 10, 2019. https://www.edureka.co/blog/fuzzy-logic-ai/

  6. P. Alam, D. Booth, K. Lee, T. Thordarson, The use of fuzzy clustering algorithm and self-organization neural networks for identifying potentially failing banks: an experimental study. Expert Syst. Appl. 18, 185–199 (2000)

    Article  Google Scholar 

  7. D. Ramos, Real-life and business applications of neural networks. https://www.smartsheet.com/neural-network-applications, Published on Oct 17, 2018

  8. https://www.google.com/url?sa=i&url=%3A%2F%2Fgithub.com%2F2black0%2FGA-Python&psig=AOvVaw35Ky20QDKamJMMW3JLYKz2&ust=1619852234840000&source=images&cd=vfe&ved=0CA0QjhxqFwoTCJDYw4KypfACFQAAAAAdAAAAABAD

  9. Faizan, Genetic algorithm | Artificial intelligence tutorial in hindi urdu | Genetic algorithm example. https://www.youtube.com/watch?v=frB2zIpOOBk. Uploaded on 26 April, 2018

  10. Ryan_blogwolf, Neural networks and gradient descent. https://wp.wwu.edu/blogwolf/. Posted on January 29, 2017

  11. L. Korobow, D. Stuhr, D. Martin, A probabilistic approach to early warning changes, in Bank Financial Condition (Federal Reserve Bank of New York, 1976), pp. 187–194 (Month-ly Review).

    Google Scholar 

  12. G.V. Karels, A.J. Prakash, Multivariate normality and forecasting of business bankruptcy. J. Business Finance Acc. 14, 573–593 (1987)

    Article  Google Scholar 

  13. C.C. Pantalone, M.B. Platt, Predicting bank failure since deregulation. N. Engl. Econ. Rev., Federal Reserve Bank of Boston, 37–47 (1987)

    Google Scholar 

  14. E. Olmeda, Fernandez, Hybrid classifiers for financial multicriteria decision making: the case of bankruptcy prediction. Comput. Econ. 10, 317–335 (1997)

    Article  Google Scholar 

  15. T.E. McKee, Developing a bankruptcy prediction model via rough set theory. Int. J. Intell. Syst. Acc. Finance, Manage. 9, 159–173 (2000)

    Google Scholar 

  16. B.A. Ahn, S.S. Cho, C.Y. Kim, The integrated methodology of rough set theory and artificial neural network for business failure prediction. Expert Syst. Appl. 18, 65–74 (2000)

    Article  Google Scholar 

  17. P.G. Swicegood, Predicting poor bank profitability: a comparison of neural network, dis-criminant analysis and professional human judgement, Ph.D. Thesis, Department of Fi-nance, Florida State University, 1998.

    Google Scholar 

  18. K.-S. Shin, Y.-J. Lee, A genetic algorithm application in bankruptcy prediction modeling. Expert Syst. Appl. 23(3), 321–328 (2002)

    Article  Google Scholar 

  19. C.-S. Park, I. Han, A case-based reasoning with the feature weights derived byanalytic hi-erarchy process for bankruptcy prediction. Expert Syst. Appl. 23(3), 255–264 (2002)

    Article  Google Scholar 

  20. L. Cielen, K. Peeters, Vanhoof, Bankruptcy prediction using a data envelopment analysis. Eur. J. Oper. Res. 154, 526–532 (2004)

    Article  Google Scholar 

  21. W.L. Tung, C. Quek, P. Cheng, GenSo-EWS: a novel neural-fuzzy based early warning system for predicting bank failures. Neural Networks 17, 567–587 (2004)

    Article  Google Scholar 

  22. J. Andres, M. Landajo, P. Lorca, Forecasting business profitability by using classification techniques: a comparative analysis based on a Spanish case. Eur. J. Oper. Res. 167, 518–542 (2005)

    Google Scholar 

  23. A.F. Atiya, Bankruptcy prediction for credit risk using neural networks: a survey and new results. IEEE Trans. Neural Networks 12, 929–935 (2001)

    Article  Google Scholar 

  24. K.-S. Shin, T.S. Lee, H.-J. Kim, An application of support vector machines in bankruptcy prediction model. Expert Syst. Appl. 28, 127–135 (2005)

    Article  Google Scholar 

  25. V. Ravi, P.J. Reddy, H.-J. Zimmermann, Fuzzy rule base generation for classification and its optimization via modified threshold accepting. Fuzzy Sets Syst. 120(2), 271–279 (2001)

    Article  Google Scholar 

  26. V. Ravi et al., Soft computing system for bank performance prediction. Appl. Soft Comput J. (2007). https://doi.org/10.1016/j.asoc.2007.02.001

    Article  Google Scholar 

  27. V. Ravi, H.-J. Zimmermann, A neural network and fuzzy rule base hybrid for pattern clas-sification. Soft Comput. 5(2), 152–159 (2001)

    Article  Google Scholar 

  28. L. Yu, S.Y. Wang, K.K. Lai, A novel non-linear ensemble forecasting model incorporating GLAR and ANN for foreign exchange rates. Comput. Oper. Res. 32(10), 2523–2541 (2005)

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Editor information

Editors and Affiliations

Rights and permissions

Reprints and permissions

Copyright information

© 2021 The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd.

About this paper

Check for updates. Verify currency and authenticity via CrossMark

Cite this paper

Archana Acharya, T., Veda Upasan, P. (2021). A Study on Techniques of Soft Computing for Handling Traditional Failure in Banks. In: Saha, S.K., Pang, P.S., Bhattacharyya, D. (eds) Smart Technologies in Data Science and Communication. Lecture Notes in Networks and Systems, vol 210. Springer, Singapore. https://doi.org/10.1007/978-981-16-1773-7_25

Download citation

Publish with us

Policies and ethics