Big Data and AI in Financial Risk Assessment: The New Scorecard Approach

This paper presents a framework for assessing financial risk across industries by integrating rule-based modeling, the Analytic Hierarchy Process (AHP), and artificial intelligence (AI) techniques. The framework utilizes diverse data sources, including financial, tax, and judicial records, as well as financial reports from listed companies, to improve enterprise credit assessments.The process begins with data preparation, which involves collecting and preprocessing data to ensure its quality and consistency. A rule-based preprocessing algorithm is developed to standardize the data for scoring. In the second phase, scoring is done using rule-based modeling informed by expert advice and AHP, which prioritizes and weights factors impacting industrial risk. This generates a customized scorecard for each industry. The third phase focuses on training AI models on the dataset. These models automatically learn to assign weights to indicators and generate industry scores by identifying complex patterns between the data and industry performance. The framework concludes with cross-validation to confirm the accuracy and reliability of the results. This approach provides insights into industry-wide scoring, supports continuous monitoring of industry performance, and enhances financial risk management decision-making. The proposed framework offers a robust and reliable tool for assessing financial risk across various industries.