A System-Aware Pipeline for Deep Neural Network Modeling in Financial Credit Risk
A System-Aware Pipeline for Deep Neural Network Modeling in Financial Credit Risk
Author(s): Radoslav KeremidchievSubject(s): Business Economy / Management, Financial Markets, Artificial Intelligence
Published by: Евдемония Продъкшън ЕООД
Keywords: Dnn; XGB; Systems; tabular data; feature space
Summary/Abstract: Deep Neural Networks (DNNs) have demonstrated strong predictive performance in many domains, yet their adoption in credit scoring is limited due to concerns about interpretability and reliability. This study examines how a DNN behaves when trained on a rigorously preprocessed, high-dimensional financial dataset (839 features; 256k samples). Using SHAP, diagnostic rule sweeps, and a comparison with XGBoost, we show that the DNN internalizes smooth, continuous structures in the data that make post-hoc rule corrections largely unnecessary. In contrast, XGBoost benefits from rule-based diagnostics because of its discrete threshold behavior. Results also reveal that the effectiveness of interpretability techniques depends on preserving systemic feature relationships during preprocessing. The findings unify DNN interpretation with system-theoretic reasoning: the tabular dataset behaves as an interconnected financial system rather than a collection of isolated variables, and the DNN’s learned representation reflects this structure. This positions DNNs as credible, interpretable tools for credit risk modeling when supported by system-aware analysis.
Journal: Vanguard Scientific Instruments in Management
- Issue Year: 22/2026
- Issue No: 1
- Page Range: 62-72
- Page Count: 11
- Language: English
