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Risks 2018, 6(2), 41; https://doi.org/10.3390/risks6020041

Active Management of Operational Risk in the Regimes of the “Unknown”: What Can Machine Learning or Heuristics Deliver?

1
DZ BANK AG, Platz der Republik, 60265 Frankfurt, Germany
2
House of Finance, Goethe University, Theodor-W.-Adorno-Platz 3, 60323 Frankfurt, Germany
3
University of Applied Sciences, Kaiserslautern—Zweibrücken, Amerikastrasse 1, 66482 Zweibrücken, Germany
*
Author to whom correspondence should be addressed.
Received: 10 March 2018 / Revised: 8 April 2018 / Accepted: 16 April 2018 / Published: 23 April 2018
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Abstract

Advanced machine learning has achieved extraordinary success in recent years. “Active” operational risk beyond ex post analysis of measured-data machine learning could provide help beyond the regime of traditional statistical analysis when it comes to the “known unknown” or even the “unknown unknown.” While machine learning has been tested successfully in the regime of the “known,” heuristics typically provide better results for an active operational risk management (in the sense of forecasting). However, precursors in existing data can open a chance for machine learning to provide early warnings even for the regime of the “unknown unknown.” View Full-Text
Keywords: operational risk; artificial intelligence; machine learning; heuristics; machine reasoning operational risk; artificial intelligence; machine learning; heuristics; machine reasoning
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Milkau, U.; Bott, J. Active Management of Operational Risk in the Regimes of the “Unknown”: What Can Machine Learning or Heuristics Deliver? Risks 2018, 6, 41.

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