TransBoost: A Boosting-Tree Kernel Transfer Learning Algorithm for Improving Financial Inclusion

Abstract

The prosperity of mobile and financial technologies has bred and expanded various kinds of financial products to a broader scope of people, which contributes to financial inclusion. It brings non-trivial social benefits of diminishing financial inequality. However, the technical challenges in individual financial risk evaluation exacerbated by the unforeseen user characteristic distribution and limited credit history of new users, as well as the inexperience of newly-entered companies in handling complex data and obtaining accurate labels, impede further promotion of financial inclusion. To tackle these challenges, this paper develops a novel transfer learning algorithm (i.e., TransBoost) that combines the merits of tree-based models and kernel methods. The TransBoost is designed with a parallel tree structure and efficient weights updating mechanism with theoretical guarantee, which enables it to excel in tackling real-world data with high dimensional features and sparsity in O(n) time complexity. We conduct extensive experiments on two public datasets and a unique largescale dataset from Tencent Mobile Payment. The results show that the TransBoost outperforms other state-of-the- art benchmark transfer learning algorithms in terms of prediction accuracy with superior efficiency, demonstrate stronger robustness to data sparsity, and provide meaningful model interpretation. Besides, given a financial risk level, the TransBoost enables financial service providers to serve the largest number of users including those who would otherwise be excluded by other algorithms. That is, the TransBoost improves financial inclusion.