Pricing in Banking and Finance by Utilizing Artificial Neural Networks

The objective of this paper is to analyze the theme of the application of the intelligent learning systems (such as artificial neural networks, expert systems, fuzzy models and genetic algorithms) in the pricing in banking and finance. All firms must settle a price for the services or products which they offer. The price is an important element of the marketing mix, being also an important source of income for the firm. As the competition in the financial systems has intensified, nowadays the settlement of correct prices has become an essential element for the marketing strategy of a bank. The price must not be considered as a purely financial problem, calculated by estimating only the costs to which a margin for profit will be added. The settlement of the price must consider also the stakeholders point of view. A peculiarity of the pricing in banking is also a partial lack of transparency which make difficult to understand the variables to analyze in order to forecast the phenomenon.