Description/Paper Instructions
Final Project Milestone Two
A clear description of the structure and purpose of the decision tree model that you choose.
Bank failures in the future are the leading debate in the United States. The failure will lead to the closure of many saving and withdrawal banks in the US that depend on the US government to protect customer data against breaches and hacking confidential information. A financial crisis is looming in the United States when the banks fail to employ proper strategic measures to protect their clients. In recent studies, the financial predicament has hit the US from 2001 up-to-date (FDIC, 2020). The issue has raised controversies concerning banks’ effectiveness and the security of depositors in the investment industry. The problem of analyzing, identifying preventive measures of bank failures, restoring client trust, productivity, and improving the banking industry’s performance has become one of the hot topics in the US with numerous unresolved cases of bank failures.
Tackling the menace requires the ICT department to formulate measures that include using a tree decision model that states the underlying causes of bank failures within the investment industry. The Data Envelopment Analysis (DEA), Decision Tree Algorithms, and Federal Deposit Insurance Corporation (FDIC) are some of the decision tree models an IT expert can use to protect vulnerabilities, which cause bank failures (Appiahene et al., 2020). In collaboration with the FDIC, the DEA has established parameters in the works as effective methods to increase bank proficiency and performance. The FDIC has clearly stated the list of banks that closed due to bank failures. The combination of the FDIC and the DEA aims to analyze bank failures and several ways of increasing the cybersecurity of individual data in the US’s banking industry (FDIC, 2020). After comparing the outcomes of the research form the DEA, the findings suggested that the DT decision model tree and its C5.0 algorithms provide an exceptional predictive model of bank failures. However, the FDIC decision model tree is the best model for analyzing risks in bank failures. The FDIC’s primary purpose is to hold information concerning the number of banks/ financial institutions that failed in the past. The FDIC is a government entity and has credible data about banks that cannot carry out their duties because of data insecurity or lack of Cybersecurity (FDIC, 2020). Additionally, the FDIC ensures that its information is easily accessible by any IT expert who wants to analyze threats that cause bank failures.
Documentation refers to potential complications in the analysis process, in an outline or bulleted format. This should be clear, concise, and thorough.
Potential challenges exist in the analysis processes. After the Great Recession, regulators and IT experts continue to face challenges in repairing a financial system and paving the way for frameworks that help control and prevent bank failures. The implementation and ongoing refinement of improvements occupy a major challenge to both investors and supervisors to assure the public about their data and money’s cybersecurity. The continuation of developing macroprudential frameworks in the US remains an impossible mission up-to-date. It implies that the supervisor must continue assessing individual bank threats, which is a problematic complication affected by monetary policy, economic drivers, and technology advancement.
First, the low-interest rate is a significant complication in the establishment of bank failures in the US. The presence of monetary policies that aid economic growth and the persistence of low-interest rates since 2001 has negatively affected bank productivity. The banks should establish proper strategies that monitor money spending during economic decline (Christodoulakis, 2015). When it fails to have software that stimulates such expenditures, customers might spend more, which leads to the pumping of more money in the market. The primary obligation of software is to control the circulation of money. The current economic environment saw before this complication and weakened the demand for loans. This complication affects the net interest margins of the bank. Second, rapid change landscape for lending and payments mechanisms.
An individual can refer to this complication as a disruptive technology. The technology change may negatively or positively influence bank productivity in monitoring vulnerabilities that cause bank failures in the United States (Appiahene et al., 2020). Sometimes the advancement of technology might enhance productivity and efficacy across all bank industries and financial institutions even if it affects existing banks. In the banking industry, the rise of technology, such as cybersecurity, challenges existing banks that lack competent IT departments that deal with banks’ confidential information for lending and payment models (Garg et al., 2018). The existence of online and mobile banking methods promotes efficient and easy ways for consumers to access banking services at no cost. However, it is costly to design, implement, and protect consumers’ privacy data who prefer using such platforms to transact money in small banks. As a result, most clients complain about the presence of fraudsters in online services who use hacking methods to steal money from people (Garg et al., 2018). Such acts may cause small banks to fail since many customers will shun from using their services because of a lack of advanced technology that protects clients from hackers.
An evaluation of the model results includes a discussion of whether or not the results are reasonable and the model is accurate, whether or not there are elements that are not present or needlessly present, and any errors that may be present.
The results are reasonable and accurate since the information held by the FDIC is compatible and successful. The FDIC website has quarterly banking profiles that provide an inclusive summary of FDIC-insured banks’ financial results (FDIC, 2020). Such graphical information about the FDIC model makes it a viable source of data needed in the research. Additionally, the FDIC is a hundred percent accurate in predicting bank failures from 2001 up-to-date because of technological advancement. The data provides varying information on the financial industry in the US applied to predict bank failures. The only error in the model is the lack of proof about the causes of bank failures in the US, whether it is through cyber insecurity or hacking of individual accounts.
References
Appiahene, P et al. (2020). Predicting bank operational efficiency using machine learning
algorithm: Comparative study of decision tree, random forest, and neural networks.
Advances in Fuzzy Systems, 20(1), p. 1-12. doi.org/10.1155/2020/8581202
Christodoulakis, N. (2015). How crises shaped economic ideas and policies: Wiser after
the events? Springer.
Federal Deposit Insurance Corporation. (2020). Failed bank list. FDIC,
https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/
Garg, N. et al. (2018). Towards the impact of hacking on cyber security. IIOAB Journal, 9(2), p. 61-77.
RUBRIC
QUALITY OF RESPONSE |
NO RESPONSE |
POOR / UNSATISFACTORY |
SATISFACTORY |
GOOD |
EXCELLENT |
Content (worth a maximum of 50% of the total points) |
Zero points: Student failed to submit the final paper. |
20 points out of 50: The essay illustrates poor understanding of the relevant material by failing to address or incorrectly addressing the relevant content; failing to identify or inaccurately explaining/defining key concepts/ideas; ignoring or incorrectly explaining key points/claims and the reasoning behind them; and/or incorrectly or inappropriately using terminology; and elements of the response are lacking. |
30 points out of 50: The essay illustrates a rudimentary understanding of the relevant material by mentioning but not full explaining the relevant content; identifying some of the key concepts/ideas though failing to fully or accurately explain many of them; using terminology, though sometimes inaccurately or inappropriately; and/or incorporating some key claims/points but failing to explain the reasoning behind them or doing so inaccurately. Elements of the required response may also be lacking. |
40 points out of 50: The essay illustrates solid understanding of the relevant material by correctly addressing most of the relevant content; identifying and explaining most of the key concepts/ideas; using correct terminology; explaining the reasoning behind most of the key points/claims; and/or where necessary or useful, substantiating some points with accurate examples. The answer is complete. |
50 points: The essay illustrates exemplary understanding of the relevant material by thoroughly and correctly addressing the relevant content; identifying and explaining all of the key concepts/ideas; using correct terminology explaining the reasoning behind key points/claims and substantiating, as necessary/useful, points with several accurate and illuminating examples. No aspects of the required answer are missing. |
Use of Sources (worth a maximum of 20% of the total points). |
Zero points: Student failed to include citations and/or references. Or the student failed to submit a final paper. |
5 out 20 points: Sources are seldom cited to support statements and/or format of citations are not recognizable as APA 6th Edition format. There are major errors in the formation of the references and citations. And/or there is a major reliance on highly questionable. The Student fails to provide an adequate synthesis of research collected for the paper. |
10 out 20 points: References to scholarly sources are occasionally given; many statements seem unsubstantiated. Frequent errors in APA 6th Edition format, leaving the reader confused about the source of the information. There are significant errors of the formation in the references and citations. And/or there is a significant use of highly questionable sources. |
15 out 20 points: Credible Scholarly sources are used effectively support claims and are, for the most part, clear and fairly represented. APA 6th Edition is used with only a few minor errors. There are minor errors in reference and/or citations. And/or there is some use of questionable sources. |
20 points: Credible scholarly sources are used to give compelling evidence to support claims and are clearly and fairly represented. APA 6th Edition format is used accurately and consistently. The student uses above the maximum required references in the development of the assignment. |
Grammar (worth maximum of 20% of total points) |
Zero points: Student failed to submit the final paper. |
5 points out of 20: The paper does not communicate ideas/points clearly due to inappropriate use of terminology and vague language; thoughts and sentences are disjointed or incomprehensible; organization lacking; and/or numerous grammatical, spelling/punctuation errors |
10 points out 20: The paper is often unclear and difficult to follow due to some inappropriate terminology and/or vague language; ideas may be fragmented, wandering and/or repetitive; poor organization; and/or some grammatical, spelling, punctuation errors |
15 points out of 20: The paper is mostly clear as a result of appropriate use of terminology and minimal vagueness; no tangents and no repetition; fairly good organization; almost perfect grammar, spelling, punctuation, and word usage. |
20 points: The paper is clear, concise, and a pleasure to read as a result of appropriate and precise use of terminology; total coherence of thoughts and presentation and logical organization; and the essay is error free. |
Structure of the Paper (worth 10% of total points) |
Zero points: Student failed to submit the final paper. |
3 points out of 10: Student needs to develop better formatting skills. The paper omits significant structural elements required for and APA 6th edition paper. Formatting of the paper has major flaws. The paper does not conform to APA 6th edition requirements whatsoever. |
5 points out of 10: Appearance of final paper demonstrates the student’s limited ability to format the paper. There are significant errors in formatting and/or the total omission of major components of an APA 6th edition paper. They can include the omission of the cover page, abstract, and page numbers. Additionally the page has major formatting issues with spacing or paragraph formation. Font size might not conform to size requirements. The student also significantly writes too large or too short of and paper |
7 points out of 10: Research paper presents an above-average use of formatting skills. The paper has slight errors within the paper. This can include small errors or omissions with the cover page, abstract, page number, and headers. There could be also slight formatting issues with the document spacing or the font Additionally the paper might slightly exceed or undershoot the specific number of required written pages for the assignment. |
10 points: Student provides a high-caliber, formatted paper. This includes an APA 6th edition cover page, abstract, page number, headers and is double spaced in 12’ Times Roman Font. Additionally, the paper conforms to the specific number of required written pages and neither goes over or under the specified length of the paper. |
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