Challenges and Opportunities in Deploying Explainable AI for Financial Risk Assessment
Afsha Imran Akkalkot, Nitin Kulshrestha, Geeti Sharma, Kawerinder Singh Sidhu, Sneha Suhasrao Palimkar, K. Nethravathi · 2025
Artificial intelligence (AI) has been used more and more in financial decision-making recently, raising questions about the accountability and transparency of these complex systems. The current study investigates the way Explained Artificial Intelligence (XAI) methods might alleviate these concerns and improve the openness of financial decision-making procedures. Nowadays machine learning algorithms are easier to use than ever before, but creating and deploying systems that facilitate real-world banking services has proved challenging. This is mostly due to the fact that algorithms for machine learning are neither transparent or explainable, two attributes that are essential to creating reliable technology. What sets this study unique is the construction of an explainable artificial intelligence (XAI) model that addresses these accessibility concerns while also serving as an instrument for the establishment of credit risk control policies. This work proposes an explainable artificial intelligence model for financing risk control to measure the risks associated with credit financing via peer-to-peer financing networks. The framework uses Shapley parameters to provide AI forecasts according to significant factors that explain. The Support Vector Machine (SVM) and gradient boosting methods had the greatest accuracy scores, 92.4 and 97.6, accordingly. The accuracy of the model was evaluated on a bigger database, and the findings demonstrated that it regularly achieved high levels of accuracy. The SVM and GBM models achieved accuracies of 94.8 and 97.6, respectively.