Neural Networks in Finance: A Descriptive Systematic Review

Riyazahmed, K (2021). Neural Networks in Finance - A Descriptive Systematic Review. Indian journal of Banking and Finance, 5(2), 1- 27. https://doi.org/10.46281/ijfb.v5i2.997

27 Pages Posted: 12 Apr 2021

See all articles by Dr. K. Riyazahmed

Dr. K. Riyazahmed

SDM Institute for Management Developement

Date Written: March 26, 2021

Abstract

Traditional statistical methods pose challenges in data analysis due to irregularity in the financial data. To improve accuracy, financial researchers use machine learning architectures for the past two decades. Neural Networks (NN) are a widely used architecture in financial research. Despite the wider usage, NN application in finance is yet to be well defined. Hence, this descriptive study classifies and examines the NN application in finance into four broad categories i.e., investment prediction, credit evaluation, financial distress, and other financial applications. Likewise, the review classifies the NN methods used under each category into standard, optimized and hybrid NN. Further, accuracy measures used by the research work widely differ, in turn, pose challenges for comparison of a NN under each category and reduces the scope of formalizing a theory to choose optimum network model under each category.

Keywords: Neural Networks, ANN, Analytics, Machine Learning

JEL Classification: G1, G17, M150

Suggested Citation

Ahmed, Riyaz, Neural Networks in Finance: A Descriptive Systematic Review (March 26, 2021). Riyazahmed, K (2021). Neural Networks in Finance - A Descriptive Systematic Review. Indian journal of Banking and Finance, 5(2), 1- 27. https://doi.org/10.46281/ijfb.v5i2.997 , Available at SSRN: https://ssrn.com/abstract=3812945

Riyaz Ahmed (Contact Author)

SDM Institute for Management Developement ( email )

No. 1 Chamundi Hill Road
Sidharthnagar
Mysore, Karnataka 570011
India
9790548895 (Phone)

HOME PAGE: http://https://www.sdmimd.ac.in/riyazahmed

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