Development of a KBS for managing bank loan risk

The knowledge-based system (KBS) is introduced as an Al technique applied to bank loan risk management with an emphasis on the study of internal control of bank loans. Descriptions of the design and implementation of KBS for the internal supervising and auditing of bank loans are also included. The structural analysis involved in the system's decision situation is presented and leads to three basic decision components consisting of the auditing of loan approval, the auditing of pre-loan analysis, and the auditing of post-loan supervision. On the basis of these analyses, the structured situation diagram model, the dependency diagram, and the documents needed by the KBS are developed. The system is then implemented using JAVA. Using sample loan data for testing, the KBS prototype is demonstrated to be effective for evaluating the quality of auditing commercial loans. (C) 2001 Elsevier Science B.V. All rights reserved.