Credit Risk Evaluation in Peer-to-peer Lending With Linguistic Data Transformation and Supervised Learning

The widespread availability of various peer-to-peer lending solutions is rapidly changing the landscape of ï¬nancial services. Beside the natural advantages over traditional services,a relevant problem in the domain is to correctly assess the risk associated with borrowers. In contrast to traditional ï¬nancial services industries, in peer-to-peer lending the unsecured nature of loans as well as the relative novelty of the platforms make the assessment of risk a difï¬cult problem. In this article we propose to use traditional machine learning methods enhanced with fuzzy set theory based transformation of data to improve the quality of identifying loans with high likelihood of default. We assess the proposed approach on a real-life dataset from one of the largest peer-to-peer platforms in Europe. The results demonstrate that (i) traditional classiï¬cation algorithms show good performance in classifying borrowers, and (ii) their performance can be improved using linguistic data transformatio

When function meets emotion, change can happen: societal value propositions and disruptive potential in fintechs

Fintechs, as providers of digital service innovations and as highly relevant and novel channels through which to deliver entrepreneurial finance based on the creative use of state-of-the-art technology in the financial domain, have thus far mainly been addressed in research by examining the functional aspects of their value propositions (VPs). This article thus sets out to gain insights into the interplay and overall role of societal VPs as potential antecedents and change catalysts in the formation of the often promised disruptive potential of fintechs for the financial sector. In an inductive, theory-building approach, the authors first examine how societal VPs transcend individual functional and emotional ones for entrepreneurs, and conclude with a conceptual model of how the former can build up the disruptive potential of fintechs and deliver apt solutions for entrepreneurs seeking finance

When function meets emotion, change can happen: societal value propositions and disruptive potential in fintechs

Fintechs, as providers of digital service innovations and as highly relevant and novel channels through which to deliver entrepreneurial finance based on the creative use of state-of-the-art technology in the financial domain, have thus far mainly been addressed in research by examining the functional aspects of their value propositions (VPs). This article thus sets out to gain insights into the interplay and overall role of societal VPs as potential antecedents and change catalysts in the formation of the often promised disruptive potential of fintechs for the financial sector. In an inductive, theory-building approach, the authors first examine how societal VPs transcend individual functional and emotional ones for entrepreneurs, and conclude with a conceptual model of how the former can build up the disruptive potential of fintechs and deliver apt solutions for entrepreneurs seeking finance