Risk Prediction for Internet Financial Enterprises by Deep Learning Algorithm and Sustainable Development of Business Transformation

Risk Prediction for Internet Financial Enterprises by Deep Learning Algorithm and Sustainable Development of Business Transformation

Yuting Zhao
Copyright: © 2022 |Pages: 16
DOI: 10.4018/JGIM.300741
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Abstract

It is necessary to find new ideas of business transformation of traditional financial enterprises under the background of Internet finance. Based on DL (deep learning) algorithm, the BPNN (Back Propagation neural network) model and Vector Autoregression model are used to analyze the business conflict of commercial banks among traditional financial enterprises under Internet finance. The business integration point of the two is found through the impulse response analysis of the impact of the Internet financial business on the traditional financial industry. Then, the DL algorithm based on BPNN is used to obtain the optimal solution of business integration, to promote the transformation of traditional financial services under the background of Internet finance. The results show that there is a close correlation between Internet finance and traditional financial business. The initial conflicts between the two are serious, but as time passes, they have a trend of mutual integration.
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Introduction

With the development of network communication technology, internet finance began to rise, greatly impacting the traditional financial industry. The main body of traditional finance is commercial banks, which play an important role in the national economy (Sun & Varatharajan, 2021; Wang et al., 2021a). In the modern market economy, commercial banks, as participants in the financial market, play a leading role in the development of the entire financial market and connect society and economic activities. The main financial services of commercial banks include deposits, loans, and customer services. China has actively participated in the continuous expansion of economic globalization with constant adjustments to the business strategy to seek development. Also, appropriate competition is encouraged in the financial industry, which continuously intensifies commercial competition among banks (Cui et al., 2021; Pei & Li, 2021). In the competitive environment, all commercial banks are committed to providing financial services for the management activities of various departments and enterprises of the national economy with diversified financial products and services to make finance more stable and promote the rapid development of the national economy.

Internet finance is a new economic model that combines the traditional economy and the internet. It has many advantages over the traditional internet in many aspects, despite some new shortcomings. The advantages of internet finance greatly impact traditional financial markets. In the traditional economy, there are many cost factors, such as operation cost, financial cost, information risk cost, and time cost. These costs greatly limit the development of the traditional financial industry, so many financial institutions conduct research to improve cost savings. Meanwhile, internet companies use the advantages of technologies and platforms to enter the existing financial industry, providing commercial and financial products based on the internet to the market, which promotes the development of the traditional financial industry (Brown et al., 2011; Sun et al., 2021). On the one hand, the combination of the internet and finance provides technical support for the creation and development of internet finance. On the other hand, it innovates the existing financial field by providing the possibility for internet companies to enter the financial field and promotes the innovation of internet financial modeling and financing. Common internet financial instruments include artificial intelligence, big data, cloud computing, search engines, and social media (Qi et al., 2020). Xie et al. (2016) built a new type of supply chain financial platform to solve the problem of mistrust among participants in the supply chain caused by information asymmetry. A more comprehensive analysis of internet finance and banking business is conducted here.

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