Does Non-linearity Matter in Retail Credit Risk Modeling?

In this research we propose a new method for retail credit risk modeling. In order to capture possible non-linear relationships between credit risk and explanatory variables, we use a learning vector quantization (LVQ) neural network. The model was estimated on a dataset from Slovenian banking sector. The proposed model outperformed the benchmarking (LOGIT) models, which represent the standard approach in banks. The results also demonstrate that the LVQ model is better able to handle the properties of categorical variables.retail banking, credit risk, logistic regression, learning vector quantization

Autonomous Learning of Representations

Walter O, Häb-Umbach R, Mokbel B, Paaßen B, Hammer B. Autonomous Learning of Representations. KI - Künstliche Intelligenz. 2015;29(4):339–351.Besides the core learning algorithm itself, one major question in machine learning is how to best encode given training data such that the learning technology can efficiently learn based thereon and generalize to novel data. While classical approaches often rely on a hand coded data representation, the topic of autonomous representation or feature learning plays a major role in modern learning architectures. The goal of this contribution is to give an overview about different principles of autonomous feature learning, and to exemplify two principles based on two recent examples: autonomous metric learning for sequences, and autonomous learning of a deep representation for spoken language, respectively

The design of an effective sensor fusion model for condition monitoring systems of turning processes

High energy price and the increasing requirements of quality and low cost of products have created an urgent need to implement new technologies in current automated manufacturing environments. Condition monitoring systems of manufacturing processes have been recognised in recent years as one of the essential technologies that provide the competitive advantage in many manufacturing environments. This research aims to develop an effective sensor fusion model for turning processes for the detection of tool wear. Multi-sensors combined with a novelty detection algorithm and Learning Vector Quantisation (LVQ) neural networks are used in this research to detect tool wear and provide diagnostic and prognostic information. A novel approach, termed ASPST, (Automated Sensor and Signal Processing Selection System for Turning) is used to select the most appropriate sensors and signal processing methods. The aim is to reduce the number of sensors needed in the overall system and reduce the cost. The ASPST approach is based on simplifying complex sensory signals into a group of Sensory Characteristic Features (SCFs) and evaluating the sensitivity of these SCFs in detecting tool wear. A wide range of sensory signals (cutting forces, strain, acceleration, acoustic emission and sound) and signal processing methods are also implemented to verify the capability of the approach. A cost reduction method is also implemented based on eliminating the least utilised sensor in an attempt to reduce the overall cost of the system without sacrificing the capability of the condition monitoring system. The experimental results prove that the suggested approach provides a responsive and effective solution in monitoring tool wear in turning with reduced time and cost

Machine Learning in Wireless Sensor Networks: Algorithms, Strategies, and Applications

Wireless sensor networks monitor dynamic environments that change rapidly over time. This dynamic behavior is either caused by external factors or initiated by the system designers themselves. To adapt to such conditions, sensor networks often adopt machine learning techniques to eliminate the need for unnecessary redesign. Machine learning also inspires many practical solutions that maximize resource utilization and prolong the lifespan of the network. In this paper, we present an extensive literature review over the period 2002-2013 of machine learning methods that were used to address common issues in wireless sensor networks (WSNs). The advantages and disadvantages of each proposed algorithm are evaluated against the corresponding problem. We also provide a comparative guide to aid WSN designers in developing suitable machine learning solutions for their specific application challenges.Comment: Accepted for publication in IEEE Communications Surveys and Tutorial