Decision support modeling for multiple criteria assessments using a likelihood-based consensus ranking method under Pythagorean fuzzy uncertainty

The role of artificial intelligence in developing a banking risk index: an application of Adaptive Neural Network-Based Fuzzy Inference System (ANFIS)

Banking risk measurement and management remain one of many challenges for managers and policymakers. This study contributes to the banking literature and practice in two ways by (a) proposing a risk ranking index based on the Mahalanobis Distance (MD) between a multidimensional point representing a bank's risk measures and the corresponding critical ratios set by the banking authorities and (b) determining the relative importance of a bank's risk ratios in affecting its financial standing using an Adaptive Neuro-Fuzzy Inference System. In this study, ten financial ratios representing five risk areas were considered, namely: Capital Adequacy, Credit, Liquidity, Earning Quality, and Operational risk. Data from 45 Gulf banks for the period 2016-2020 was used to develop the model. Our findings indicate that a bank is in a sound risk position at the 99%, 95%, and 90% confidence level if its Mahalanobis distance exceeds 4.82, 4.28, and 4.0, respectively. The maximum distance computed for the banks in this study was 9.31; only five out of the forty-five banks were below the 4.82 and one below the 4.28 and 4.0 thresholds at 3.96. Sensitivity analysis of the risks indicated that the Net Interest Margin is the most significant factor in explaining variations in a bank's risk position, followed by Capital Adequacy Ratio, Common Equity Tier1, and Tier1 Equity in order. The remaining financial ratios: Non-Performing Loans, Equity Leverage, Cost Income Ratio, Loans to Total Assets, and Loans to Deposits have the least influence in the order given; the Provisional Loans Ratio appears to have no influence.

Evolved distance measures for circular intuitionistic fuzzy sets and their exploitation in the technique for order preference by similarity to ideal solutions

Circular intuitionistic fuzzy (C-IF) sets are an up-and-coming tool for enforcing indistinct and imprecise information in variable and convoluted decision-making situations. C-IF sets, as opposed to typical intuitionistic fuzzy sets, are better suited for identifying the evaluation data with uncertainty in intricate realistic decision situations. The architecture of the technique for order preference by similarity to ideal solutions (TOPSIS) provides powerful evaluation tools to aid decision-making in intuitionistic fuzzy conditions. To address appraisal issues associated with decision analysis involving extremely convoluted information, this paper propounds a novel C-IF TOPSIS approach in the context of C-IF uncertainty. This research makes three significant contributions. First, based on the three- and four-term operating rules, this research introduces C-IF Minkowski distance measures, which are new generalized representations of distance metrics applicable to C-IF values and C-IF sets. Such general C-IF distance metrics can alleviate the constraints of established C-IF distance measures, provide usage resiliency through parameter settings, and broaden the applicability of metric analysis. Second, unlike existing C-IF TOPSIS methods, this research fully utilizes C-IF information characteristics and extends the core structure of the classic TOPSIS to C-IF contexts. With the newly developed C-IF Minkowski metrics, this study faithfully demonstrates the trade-off evaluation and compromise decision rules in the TOPSIS framework. Third, this research builds on the core strengths of the pioneered C-IF Minkowski distance measures to create innovative C-IF TOPSIS techniques utilizing four different combinations, including displaced and fixed anchoring frameworks, as well as three- and four-term representations. Such a refined C-IF TOPSIS methodology can assist decision-makers in proactively addressing increasingly sophisticated decision-making problems in practical settings. Finally, this research employs two innovative prioritization algorithms to address a site selection issue of large-scale epidemic hospitals to illustrate the superior capabilities of the C-IF TOPSIS methodology over some current related approaches.