Intelligent Pricing with Clarity: Interpretable AI for Customer-Centric Time Deposit Interest Rates

Imece S., Hamza Gundog B., Koroglu B., Iyigün C.

International Conference on Intelligent and Fuzzy Systems, INFUS 2024, Çanakkale, Turkey, 16 - 18 July 2024, vol.1090 LNNS, pp.68-77, (Full Text) identifier identifier

  • Publication Type: Conference Paper / Full Text
  • Volume: 1090 LNNS
  • Doi Number: 10.1007/978-3-031-67192-0_9
  • City: Çanakkale
  • Country: Turkey
  • Page Numbers: pp.68-77
  • Keywords: Customer-specific interest rates, Explainable artificial intelligence (XAI), Machine learning algorithms, Time deposit contracts
  • Middle East Technical University Affiliated: Yes

Abstract

Time deposits represent a savings account type where customers place their funds for a designated period. The process of determining interest rates tailored to individual customer-specific time-deposit contracts presents a formidable challenge. It involves the intricate balance of ensuring customer satisfaction while concurrently ensuring banking profitability. In our study, we focused on the prediction of interest rates for time deposit contracts by leveraging customer-specific and macroeconomic features. The data utilized was sourced from a private bank in Turkey. We delved into several machine learning algorithms to secure reliable results and executed rigorous statistical comparisons among them. Subsequently, our emphasis shifted to the realm of explainable AI techniques, allowing us to derive substantial insights from the machine learning algorithms, particularly concerning customer-specific aspects. In light of this framework, our research bears significant relevance for our banking partner, proffering both elucidation and a decisive approach.