Using Weighted Similarity to Assess Risk of Illegal Fund Raising in Online P2P Lending

Using Weighted Similarity to Assess Risk of Illegal Fund Raising in Online P2P Lending

Jianying Xiong, Min Tu, Ying Zhou
Copyright: © 2018 |Pages: 18
DOI: 10.4018/IJDCF.2018100105
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Abstract

Peer-to-peer (P2P) lending is an important internet financial mode, which has a greater risk of illegal fund raising. From the risk research on P2P lending platforms has focused on policy and law, and the existing risk assessment is mainly aimed at borrowers' credit. Since it cannot meet the needs of effective supervision, this article proposes a risk alarm model from the perspective of illegal fund raising based on similarity weighted case. Through the investigation of P2P illegal fundraising cases, this article has extracted the risk features to build a risk feature matrix. A case to be evaluated needs to be transformed into a feature vector in the data preprocessing stage. Then, the similarity vector can be obtained by comparing a feature vector with the vectors in the risk feature matrix. The following selected the TOP K similarity to calculate the risk value by weighting. The experiments show that under the condition of even a small sample, it can reasonably evaluate the risk of the P2P lending platform, to achieve a certain risk alarm effect, and has a good feasibility.
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The research of economic crime caused by illegal fund raising in China mainly focuses on the legal, including the legalities of fund-raising behavior, policy and regulations, illegal fund-raising prevention and control opinions. The key words in the study of fund raising in 2013 and 2014 are mainly “Internet Finance”, “Risk Prevention”, “Financing”, “Risk” and so on. Especially to the problem of “risk”, although the existing research results are few, it has become a new research hotspot since 2014(Li, 2016; Meng & Yu, 2016). The frontier issues of behavior research indicating that scholars are no longer limited to the traditional perspective of fundraising research, they also hope to seek a new way to solve the problem by expanding the new perspective.

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