On Local Testability in the Non-Signaling Setting

Non-signaling strategies are a generalization of quantum strategies that have been studied in physics for decades, and have recently found applications in theoretical computer science. These applications motivate the study of local-to-global phenomena for non-signaling functions. We prove that low-degree testing in the non-signaling setting is possible, assuming that the locality of the non-signaling function exceeds a threshold. We additionally show that if the locality is below the threshold then the test fails spectacularly, in that there exists a non-signaling function which passes the test with probability 1 and yet is maximally far from being low-degree. Along the way, we present general results about the local testability of linear codes in the non-signaling setting. These include formulating natural definitions that capture the condition that a non-signaling function "belongs" to a given code, and characterizing the sets of local constraints that imply membership in the code. We prove these results by formulating a logical inference system for linear constraints on non-signaling functions that is complete and sound

Opening the Black Box of Financial AI with CLEAR-Trade: A CLass-Enhanced Attentive Response Approach for Explaining and Visualizing Deep Learning-Driven Stock Market Prediction

Deep learning has been shown to outperform traditional machine learning algorithms across a wide range of problem domains. However, current deep learning algorithms have been criticized as uninterpretable "black-boxes" which cannot explain their decision making processes. This is a major shortcoming that prevents the widespread application of deep learning to domains with regulatory processes such as finance. As such, industries such as finance have to rely on traditional models like decision trees that are much more interpretable but less effective than deep learning for complex problems. In this paper, we propose CLEAR-Trade, a novel financial AI visualization framework for deep learning-driven stock market prediction that mitigates the interpretability issue of deep learning methods. In particular, CLEAR-Trade provides a effective way to visualize and explain decisions made by deep stock market prediction models. We show the efficacy of CLEAR-Trade in enhancing the interpretability of stock market prediction by conducting experiments based on S&P 500 stock index prediction. The results demonstrate that CLEAR-Trade can provide significant insight into the decision-making process of deep learning-driven financial models, particularly for regulatory processes, thus improving their potential uptake in the financial industry

Artificial Intelligence for the Financial Services Industry: What Challenges Organizations to Succeed?

As a research field, artificial intelligence (AI) exists for several years. More recently, technological breakthroughs, coupled with the fast availability of data, have brought AI closer to commercial use. Internet giants such as Google, Amazon, Apple or Facebook invest significantly into AI, thereby underlining its relevance for business models worldwide. For the highly data driven finance industry, AI is of intensive interest within pilot projects, still, few AI applications have been implemented so far. This study analyzes drivers and inhibitors of a successful AI application in the finance industry based on panel data comprising 22 semi-structured interviews with experts in AI in finance. As theoretical lens, we structured our results using the TOE framework. Guidelines for applying AI successfully reveal AI-specific role models and process competencies as crucial, before trained algorithms will have reached a quality level on which AI applications will operate without human intervention and moral concerns

An explainable AI-based fault diagnosis model for bearings.

In this paper, an explainable AI-based fault diagnosis model for bearings is proposed with five stages, i.e., (1) a data preprocessing method based on the Stockwell Transformation Coefficient (STC) is proposed to analyze the vibration signals for variable speed and load conditions, (2) a statistical feature extraction method is introduced to capture the significance from the invariant pattern of the analyzed data by STC, (3) an explainable feature selection process is proposed by introducing a wrapper-based feature selector—Boruta, (4) a feature filtration method is considered on the top of the feature selector to avoid the multicollinearity problem, and finally, (5) an additive Shapley ex-planation followed by k-NN is proposed to diagnose and to explain the individual decision of the k-NN classifier for debugging the performance of the diagnosis model. Thus, the idea of explaina-bility is introduced for the first time in the field of bearing fault diagnosis in two steps: (a) incorpo-rating explainability to the feature selection process, and (b) interpretation of the classifier performance with respect to the selected features. The effectiveness of the proposed model is demon-strated on two different datasets obtained from separate bearing testbeds. Lastly, an assessment of several state-of-the-art fault diagnosis algorithms in rotating machinery is included