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Symmetry-Aware Credit Risk Modeling: A Deep Learning Framework Exploiting Financial Data Balance and Invariance

  • Xu Han
  • , Yongbin Yang
  • , Jiaying Chen
  • , Mengdie Wang
  • , Mengjie Zhou*
  • , Zhengqiu Zhang (Editor)
  • *Corresponding author for this work

Research output: Contribution to journal › Article (Academic Journal) › peer-review

22 Citations (Scopus)

Abstract

With the proliferation of mobile devices and payment systems in modern financial services, there is an increasing need to process and analyze continuous streams of transaction data for credit risk assessment. Leveraging the inherent symmetries in financial markets and data structures, this paper introduces DeepCreditRisk, a symmetry-aware deep learning framework that addresses key challenges while maintaining critical invariance properties in financial data representation. The framework incorporates three main components: an adaptive temporal fusion mechanism, a heterogeneous graph neural network, and an attention-based interpretable output layer. The temporal fusion mechanism effectively models both short-term fluctuations and long-term trends in financial time series, while the heterogeneous graph neural network captures intricate relationships within the financial ecosystem. The framework maintains important symmetrical properties in both temporal and structural representations, ensuring balanced feature learning and invariant risk assessment. The attention-based output layer preserves representation symmetry while enhancing model interpretability. Extensive experiments on a large-scale credit risk dataset demonstrate DeepCreditRisk’s superior performance, achieving a 7.2% improvement in the Area Under the Receiver Operating Characteristic Curve (AUC-ROC) and an 18.6% improvement in the Kolmogorov–Smirnov (KS) statistic over state-of-the-art baseline models. The framework maintains high predictive power across various time horizons and provides interpretable insights into feature importance. DeepCreditRisk represents a significant advancement in applying deep learning to credit risk assessment, offering financial institutions a more accurate, robust, and transparent approach for evaluating creditworthiness and managing risk.
Original languageEnglish
Article number341
Number of pages27
JournalSymmetry
Volume17
Issue number3
Early online date24 Feb 2025
DOIs
Publication statusPublished - 1 Mar 2025

Bibliographical note

Publisher Copyright:
© 2025 by the authors.

Keywords

  • balanced risk assessment
  • symmetrical feature learning
  • financial data invariance

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