October 2019
Predictive model evaluation -Gini Coefficient-
introduction It is said that the model which is made by AI often becomes black boxes, but nowadays they are changing to a more descriptive form. WKWK also has a white box model that users can understand.So how a risk model should be evaluated by when machine learning? In the case of credit scores, one of the representative indicators is the Gini Coefficient. In general consumer finance, the value varies greatly depending on the business model, such as 30% to 80%. It becomes one of the substantial reasons to say it is a credible model when the values are higher.Let us explain what the Gini coefficient is. What is Gini […]
Money lending needs a single regulator
It is true that a lot of Hong Kong lenders are aggressive in their sales activities and seem to enjoy a high interest rate margin which is regulated by up to 60 per cent cap for now. At the same time, many lenders still rely on simple score cards or human judgement for credit decisions which tend to include unnecessary biases. This can cause to generate a gap between lenders’ view and borrowers’ potential in terms of credit risk prediction. From the lenders point of view, it is likely for them to set the interest higher as the borrower’s risk is difficult to predict accurately due to lack of technologies […]