Deep learning enhancing banking services: a hybrid transaction classification and cash flow prediction approach

Abstract

Small Medium Enterprises (SMEs) are vital to the global economy and all societies. However, they face a complex and challenging environment, as in most sectors they are lagging behind in their digital transformation. Banks, retaining a variety of data of their SME customers to perform their main activities, could offer a solution by leveraging all available data to provide a Business Financial Management (BFM) toolkit to their customers, providing value added services on top of their core business. In this direction, this paper revolves around the development of a smart, highly personalized hybrid transaction categorization model, interconnected with a cash flow prediction model based on Recurrent Neural Networks (RNNs). As the classification of transactions is of great significance, this research is extended towards explainable AI, where LIME and SHAP frameworks are utilized to interpret and illustrate the ML classification results. Our approach shows promising results on a real-world banking use case and acts as the foundation for the development of further BFM banking microservices, such as transaction fraud detection and budget monitoring.