Explainable Automated Machine Learning for Credit Decisions: Enhancing Human Artificial Intelligence Collaboration in Financial Engineering

ArXiv ID: 2402.03806 “View on arXiv”

Authors: Unknown

Abstract

This paper explores the integration of Explainable Automated Machine Learning (AutoML) in the realm of financial engineering, specifically focusing on its application in credit decision-making. The rapid evolution of Artificial Intelligence (AI) in finance has necessitated a balance between sophisticated algorithmic decision-making and the need for transparency in these systems. The focus is on how AutoML can streamline the development of robust machine learning models for credit scoring, while Explainable AI (XAI) methods, particularly SHapley Additive exPlanations (SHAP), provide insights into the models’ decision-making processes. This study demonstrates how the combination of AutoML and XAI not only enhances the efficiency and accuracy of credit decisions but also fosters trust and collaboration between humans and AI systems. The findings underscore the potential of explainable AutoML in improving the transparency and accountability of AI-driven financial decisions, aligning with regulatory requirements and ethical considerations.

Keywords: Explainable Automated Machine Learning (AutoML), Credit Scoring, SHapley Additive exPlanations (SHAP), Financial Engineering, Explainable AI (XAI)

Complexity vs Empirical Score

  • Math Complexity: 4.0/10
  • Empirical Rigor: 7.0/10
  • Quadrant: Street Traders
  • Why: The paper leverages established statistical methods (GLMs, Random Forests, SHAP) without deriving novel theory, but demonstrates a practical, data-driven implementation using real-world datasets, AutoML frameworks (H2O), and validation metrics (AUC, log-loss).
  flowchart TD
    A["Research Goal:<br>Enhance Human-AI Collaboration<br>in Credit Decisions"] --> B["Methodology:<br>Explainable AutoML with SHAP"]
    
    B --> C["Input Data:<br>Financial/Credit Datasets"]
    
    C --> D["Computational Process:<br>AutoML Model Generation<br>+ SHAP Explanations"]
    
    D --> E["Output 1:<br>Automated Credit Scoring<br>with Improved Accuracy"]
    
    D --> F["Output 2:<br>Transparent Feature Explanations<br>for Human Review"]
    
    D --> G["Output 3:<br>Enhanced Trust & Collaboration<br>aligned with Regulations"]
    
    E & F & G --> H["Final Outcome:<br>Explainable AI-Driven<br>Credit Decision Framework"]