Network-aware credit scoring system for telecom subscribers using machine learning and network analysis

doi:10.1108/APJML-12-2020-0872

Network-aware credit scoring system for telecom subscribers using machine learning and network analysis

2021-10-05

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DOI：10.1108/APJML-12-2020-0872

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Purpose A good decision support system for credit scoring enables telecom operators to measure the subscribers' creditworthiness in a fine-grained manner. This paper aims to propose a robust credit scoring system by leveraging latent information embedded in the telecom subscriber relation network based on multi-source data sources, including telecom inner data, online app usage, and offline consumption footprint. Design/methodology/approach Rooting from network science, the relation network model and singular value decomposition are integrated to infer different subscriber subgroups. Employing the results of network inference, the paper proposed a network-aware credit scoring system to predict the continuous credit scores by implementing several state-of-art techniques, i.e. multivariate linear regression, random forest regression, support vector regression, multilayer perceptron, and a deep learning algorithm. The authors use a data set consisting of 926 users of a Chinese major telecom operator within one month of 2018 to verify the proposed approach. Findings The distribution of telecom subscriber relation network follows a power-law function instead of the Gaussian function previously thought. This network-aware inference divides the subscriber population into a connected subgroup and a discrete subgroup. Besides, the findings demonstrate that the network-aware decision support system achieves better and more accurate prediction performance. In particular, the results show that our approach considering stochastic equivalence reveals that the forecasting error of the connected-subgroup model is significantly reduced by 7.89-25.64% as compared to the benchmark. Deep learning performs the best which might indicate that a non-linear relationship exists between telecom subscribers' credit scores and their multi-channel behaviours. Originality/value This paper contributes to the existing literature on business intelligence analytics and continuous credit scoring by incorporating latent information of the relation network and external information from multi-source data (e.g. online app usage and offline consumption footprint). Also, the authors have proposed a power-law distribution-based network-aware decision support system to reinforce the prediction performance of individual telecom subscribers' credit scoring for the telecom marketing domain.

Keyword:

Credit scoring

Relation network

Stochastic equivalence

Power-law distribution

Machine learning

Deep learning

Network-aware credit scoring system for telecom subscribers using machine learning and network analysis

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