arXiv subjects

Bart Baesens

Publications and source records attributed to Bart Baesens.

At least 19 recordsLinked to original sources

arXiv2026

Foundation Models for Credit Risk Prediction: A Game Changer?

Predictive models play a pivotal role in credit risk management, guiding critical decisions through accurate estimation of default probabilities and losses. Extensive research has introduced new modeling techniques, complemented by large-scale benchmarking studies consolidating the state-of-the-art. Today, quasi-standards such as gradient-boosting models paired with SHAP explainers have emerged, yet continuous improvement of risk models remains a top priority. Concurrently, rapid advancements in AI, most notably large language models, have disrupted predictive modeling paradigms. Foundation models, pretrained on extensive datasets from diverse domains, have demonstrated remarkable performance by leveraging prior knowledge. While prevalent in natural language processing and computer vision, foundation models for tabular data have only recently emerged. We conjecture that pretraining on out-of-domain data is particularly beneficial in small-data settings, such as SME lending or specialized corporate portfolios, and may help address longstanding challenges including low default portfolios and class imbalance. This paper benchmarks recently proposed tabular foundation models against a broad set of competitors, including established and advanced machine learning techniques, across two core tasks: PD and LGD modeling. Our evaluation encompasses various datasets, performance indicators, and experimental conditions. We find that tabular foundation models generally perform best across datasets and tasks. Moreover, they offer significant improvement in predictive performance as dataset size shrinks. These results are remarkable given that the models are tested out-of-the-box, without hyperparameter tuning, ensuring ease of use and mitigating computational costs.

cs.LG↗

arXiv2026

GARG-AML against Smurfing: A Scalable and Interpretable Graph-Based Framework for Anti-Money Laundering

Purpose: We introduce GARG-AML, a fast and transparent graph-based method to catch `smurfing', a common money-laundering tactic. It assigns a single, easy-to-understand risk score to every account in both directed and undirected networks. Unlike overly complex models, it balances detection power with the speed and clarity that investigators require. Methodology: The method maps an account's immediate and secondary connections (its second-order neighbourhood) into an adjacency matrix. By measuring the density of specific blocks within this matrix, GARG-AML flags patterns that mimic smurfing behaviour. We further boost the model's performance using decision trees and gradient-boosting classifiers, testing the results against current state-of-the-art on both synthetic and open-source data. Findings: GARG-AML matches or beats state-of-the-art performance across all tested datasets. Crucially, it easily processes the massive transaction graphs typical of large financial institutions. By leveraging only the adjacency matrix of the second-order neighbourhood and basic network features, this work highlights the potential of fundamental network properties towards advancing fraud detection. Originality: The originality lies in the translation of human expert knowledge of smurfing directly into a simple network representation, rather than relying on uninterpretable deep learning. Because GARG-AML is built expressly for the real-world business demands of scalability and interpretability, banks can easily incorporate it in their existing AML solutions.

cs.SI↗

arXiv2025

Native Design Bias: Studying the Impact of English Nativeness on Language Model Performance

Large Language Models (LLMs) excel at providing information acquired during pretraining on large-scale corpora and following instructions through user prompts. This study investigates whether the quality of LLM responses varies depending on the demographic profile of users. Considering English as the global lingua franca, along with the diversity of its dialects among speakers of different native languages, we explore whether non-native English speakers receive lower-quality or even factually incorrect responses from LLMs more frequently. Our results show that performance discrepancies occur when LLMs are prompted by native versus non-native English speakers and persist when comparing native speakers from Western countries with others. Additionally, we find a strong anchoring effect when the model recognizes or is made aware of the user's nativeness, which further degrades the response quality when interacting with non-native speakers. Our analysis is based on a newly collected dataset with over 12,000 unique annotations from 124 annotators, including information on their native language and English proficiency.

cs.CL↗

arXiv2025

Are Economists Always More Introverted? Analyzing Consistency in Persona-Assigned LLMs

Personalized Large Language Models (LLMs) are increasingly used in diverse applications, where they are assigned a specific persona - such as a happy high school teacher - to guide their responses. While prior research has examined how well LLMs adhere to predefined personas in writing style, a comprehensive analysis of consistency across different personas and task types is lacking. In this paper, we introduce a new standardized framework to analyze consistency in persona-assigned LLMs. We define consistency as the extent to which a model maintains coherent responses when assigned the same persona across different tasks and runs. Our framework evaluates personas across four different categories (happiness, occupation, personality, and political stance) spanning multiple task dimensions (survey writing, essay generation, social media post generation, single turn, and multi-turn conversations). Our findings reveal that consistency is influenced by multiple factors, including the assigned persona, stereotypes, and model design choices. Consistency also varies across tasks, increasing with more structured tasks and additional context. All code is available on GitHub.

cs.CL↗

arXiv2025

Network Analytics for Anti-Money Laundering -- A Systematic Literature Review and Experimental Evaluation

Money laundering presents a pervasive challenge, burdening society by financing illegal activities. The use of network information is increasingly being explored to effectively combat money laundering, given it involves connected parties. This led to a surge in research on network analytics for anti-money laundering (AML). The literature is, however, fragmented and a comprehensive overview of existing work is missing. This results in limited understanding of the methods to apply and their comparative detection power. This paper presents an extensive and unique literature review, based on 97 papers from Web of Science and Scopus, resulting in a taxonomy following a recently proposed fraud analytics framework. We conclude that most research relies on expert-based rules and manual features, while deep learning methods have been gaining traction. This paper also presents a comprehensive framework to evaluate and compare the performance of prominent methods in a standardized setup. We compare manual feature engineering, random walk-based, and deep learning methods on two publicly available data sets. We conclude that (1) network analytics increases the predictive power, but caution is needed when applying GNNs in the face of class imbalance and network topology, and that (2) care should be taken with synthetic data as this can give overly optimistic results. The open-source implementation facilitates researchers and practitioners to extend this work on proprietary data, promoting a standardised approach for the analysis and evaluation of network analytics for AML.

cs.SI↗

arXiv2025

Collaborative governance of cyber violence: A two-phase, multi-scenario four-party evolutionary game and SBI1I2R public opinion dissemination

Cyber violence severely disrupts public order in both cyberspace and the real world. Existing studies have gradually advocated collaborative governance but rely on macro-level theoretical analyses. This study integrates micro- and macro-level perspectives to propose a two-stage, multi-scenario governance mechanism for cyber violence. In the first phase, a multi-scenario evolutionary game model with four parties involved in cyber violence was developed based on evolutionary game theory. Matlab simulations show that under strong government regulation, moderate levels of punishment implemented by the government against the online media that adopt misguidance strategies can achieve the most desirable stable state. In the second phase, the role of bystanders was introduced by integrating communication dynamics theory, and emotional factors were considered alongside game strategies. This led to the development of a new SBI1I2R model for public opinion dissemination in cyber violence. Netlogo simulations found that increasing the "correct guidance" strategy by the online media reduces the influence of cyber violence supporters and the time it takes for their nodes to drop to zero, but does not significantly shorten the time for the peak to occur. Comparatively, collaborative intervention between the online media and the government was most effective in curbing public opinion, followed by the government's independent "strong regulation." Relying solely on the online media's "correct guidance" produced the weakest effect. Finally, this mechanism was applied to a case study, and a multi-stage, multi-scenario analysis based on life cycle theory enhanced its practical applicability.

cs.MA↗

arXiv2025

On the Performance of LLMs for Real Estate Appraisal

The real estate market is vital to global economies but suffers from significant information asymmetry. This study examines how Large Language Models (LLMs) can democratize access to real estate insights by generating competitive and interpretable house price estimates through optimized In-Context Learning (ICL) strategies. We systematically evaluate leading LLMs on diverse international housing datasets, comparing zero-shot, few-shot, market report-enhanced, and hybrid prompting techniques. Our results show that LLMs effectively leverage hedonic variables, such as property size and amenities, to produce meaningful estimates. While traditional machine learning models remain strong for pure predictive accuracy, LLMs offer a more accessible, interactive and interpretable alternative. Although self-explanations require cautious interpretation, we find that LLMs explain their predictions in agreement with state-of-the-art models, confirming their trustworthiness. Carefully selected in-context examples based on feature similarity and geographic proximity, significantly enhance LLM performance, yet LLMs struggle with overconfidence in price intervals and limited spatial reasoning. We offer practical guidance for structured prediction tasks through prompt optimization. Our findings highlight LLMs' potential to improve transparency in real estate appraisal and provide actionable insights for stakeholders.

cs.AI↗

arXiv2025

End-To-End Self-Tuning Self-Supervised Time Series Anomaly Detection

Time series anomaly detection (TSAD) finds many applications such as monitoring environmental sensors, industry KPIs, patient biomarkers, etc. A two-fold challenge for TSAD is a versatile and unsupervised model that can detect various different types of time series anomalies (spikes, discontinuities, trend shifts, etc.) without any labeled data. Modern neural networks have outstanding ability in modeling complex time series. Self-supervised models in particular tackle unsupervised TSAD by transforming the input via various augmentations to create pseudo anomalies for training. However, their performance is sensitive to the choice of augmentation, which is hard to choose in practice, while there exists no effort in the literature on data augmentation tuning for TSAD without labels. Our work aims to fill this gap. We introduce TSAP for TSA "on autoPilot", which can (self-)tune augmentation hyperparameters end-to-end. It stands on two key components: a differentiable augmentation architecture and an unsupervised validation loss to effectively assess the alignment between augmentation type and anomaly type. Case studies show TSAP's ability to effectively select the (discrete) augmentation type and associated (continuous) hyperparameters. In turn, it outperforms established baselines, including SOTA self-supervised models, on diverse TSAD tasks exhibiting different anomaly types.

cs.LG↗

arXiv2025

Advances in Continual Graph Learning for Anti-Money Laundering Systems: A Comprehensive Review

Financial institutions are required by regulation to report suspicious financial transactions related to money laundering. Therefore, they need to constantly monitor vast amounts of incoming and outgoing transactions. A particular challenge in detecting money laundering is that money launderers continuously adapt their tactics to evade detection. Hence, detection methods need constant fine-tuning. Traditional machine learning models suffer from catastrophic forgetting when fine-tuning the model on new data, thereby limiting their effectiveness in dynamic environments. Continual learning methods may address this issue and enhance current anti-money laundering (AML) practices, by allowing models to incorporate new information while retaining prior knowledge. Research on continual graph learning for AML, however, is still scarce. In this review, we critically evaluate state-of-the-art continual graph learning approaches for AML applications. We categorise methods into replay-based, regularization-based, and architecture-based strategies within the graph neural network (GNN) framework, and we provide in-depth experimental evaluations on both synthetic and real-world AML data sets that showcase the effect of the different hyperparameters. Our analysis demonstrates that continual learning improves model adaptability and robustness in the face of extreme class imbalances and evolving fraud patterns. Finally, we outline key challenges and propose directions for future research.

cs.LG↗

arXiv2024

INFLECT-DGNN: Influencer Prediction with Dynamic Graph Neural Networks

Leveraging network information for predictive modeling has become widespread in many domains. Within the realm of referral and targeted marketing, influencer detection stands out as an area that could greatly benefit from the incorporation of dynamic network representation due to the continuous evolution of customer-brand relationships. In this paper, we present INFLECT-DGNN, a new method for profit-driven INFLuencer prEdiCTion with Dynamic Graph Neural Networks that innovatively combines Graph Neural Networks (GNNs) and Recurrent Neural Networks (RNNs) with weighted loss functions, synthetic minority oversampling adapted to graph data, and a carefully crafted rolling-window strategy. We introduce a novel profit-driven framework that supports decision-making based on model predictions. To test the framework, we use a unique corporate dataset with diverse networks, capturing the customer interactions across three cities with different socioeconomic and demographic characteristics. Our results show how using RNNs to encode temporal attributes alongside GNNs significantly improves predictive performance, while the profit-driven framework determines the optimal classification threshold for profit maximization. We compare the results of different models to demonstrate the importance of capturing network representation, temporal dependencies, and using a profit-driven evaluation. Our research has significant implications for the fields of referral and targeted marketing, expanding the technical use of deep graph learning within corporate environments.

cs.SI↗

arXiv2024

Time-Series Foundation Models for Forecasting Soil Moisture Levels in Smart Agriculture

The recent surge in foundation models for natural language processing and computer vision has fueled innovation across various domains. Inspired by this progress, we explore the potential of foundation models for time-series forecasting in smart agriculture, a field often plagued by limited data availability. Specifically, this work presents a novel application of $\texttt{TimeGPT}$, a state-of-the-art (SOTA) time-series foundation model, to predict soil water potential ($ψ_\mathrm{soil}$), a key indicator of field water status that is typically used for irrigation advice. Traditionally, this task relies on a wide array of input variables. We explore $ψ_\mathrm{soil}$'s ability to forecast $ψ_\mathrm{soil}$ in: ($i$) a zero-shot setting, ($ii$) a fine-tuned setting relying solely on historic $ψ_\mathrm{soil}$ measurements, and ($iii$) a fine-tuned setting where we also add exogenous variables to the model. We compare $\texttt{TimeGPT}$'s performance to established SOTA baseline models for forecasting $ψ_\mathrm{soil}$. Our results demonstrate that $\texttt{TimeGPT}$ achieves competitive forecasting accuracy using only historical $ψ_\mathrm{soil}$ data, highlighting its remarkable potential for agricultural applications. This research paves the way for foundation time-series models for sustainable development in agriculture by enabling forecasting tasks that were traditionally reliant on extensive data collection and domain expertise.

cs.LG↗

arXiv2023

SEER : A Knapsack approach to Exemplar Selection for In-Context HybridQA

Question answering over hybrid contexts is a complex task, which requires the combination of information extracted from unstructured texts and structured tables in various ways. Recently, In-Context Learning demonstrated significant performance advances for reasoning tasks. In this paradigm, a large language model performs predictions based on a small set of supporting exemplars. The performance of In-Context Learning depends heavily on the selection procedure of the supporting exemplars, particularly in the case of HybridQA, where considering the diversity of reasoning chains and the large size of the hybrid contexts becomes crucial. In this work, we present Selection of ExEmplars for hybrid Reasoning (SEER), a novel method for selecting a set of exemplars that is both representative and diverse. The key novelty of SEER is that it formulates exemplar selection as a Knapsack Integer Linear Program. The Knapsack framework provides the flexibility to incorporate diversity constraints that prioritize exemplars with desirable attributes, and capacity constraints that ensure that the prompt size respects the provided capacity budgets. The effectiveness of SEER is demonstrated on FinQA and TAT-QA, two real-world benchmarks for HybridQA, where it outperforms previous exemplar selection methods.

cs.CL↗

arXiv2023

Investigating Bias in Multilingual Language Models: Cross-Lingual Transfer of Debiasing Techniques

This paper investigates the transferability of debiasing techniques across different languages within multilingual models. We examine the applicability of these techniques in English, French, German, and Dutch. Using multilingual BERT (mBERT), we demonstrate that cross-lingual transfer of debiasing techniques is not only feasible but also yields promising results. Surprisingly, our findings reveal no performance disadvantages when applying these techniques to non-English languages. Using translations of the CrowS-Pairs dataset, our analysis identifies SentenceDebias as the best technique across different languages, reducing bias in mBERT by an average of 13%. We also find that debiasing techniques with additional pretraining exhibit enhanced cross-lingual effectiveness for the languages included in the analyses, particularly in lower-resource languages. These novel insights contribute to a deeper understanding of bias mitigation in multilingual language models and provide practical guidance for debiasing techniques in different language contexts.

cs.CL↗

arXiv2023

Self-Supervised Anomaly Detection of Rogue Soil Moisture Sensors

IoT data is a central element in the successful digital transformation of agriculture. However, IoT data comes with its own set of challenges. E.g., the risk of data contamination due to rogue sensors. A sensor is considered rogue when it provides incorrect measurements over time. To ensure correct analytical results, an essential preprocessing step when working with IoT data is the detection of such rogue sensors. Existing methods assume that well-behaving sensors are known or that a large majority of the sensors is well-behaving. However, real-world data is often completely unlabeled and voluminous, calling for self-supervised methods that can detect rogue sensors without prior information. We present a self-supervised anomalous sensor detector based on a neural network with a contrastive loss, followed by DBSCAN. A core contribution of our paper is the use of Dynamic Time Warping in the negative sampling for the triplet loss. This novelty makes the use of triplet networks feasible for anomalous sensor detection. Our method shows promising results on a challenging dataset of soil moisture sensors deployed in multiple pear orchards.

cs.LG↗

arXiv2022

Influencer Detection with Dynamic Graph Neural Networks

Leveraging network information for prediction tasks has become a common practice in many domains. Being an important part of targeted marketing, influencer detection can potentially benefit from incorporating dynamic network representation. In this work, we investigate different dynamic Graph Neural Networks (GNNs) configurations for influencer detection and evaluate their prediction performance using a unique corporate data set. We show that using deep multi-head attention in GNN and encoding temporal attributes significantly improves performance. Furthermore, our empirical evaluation illustrates that capturing neighborhood representation is more beneficial that using network centrality measures.

cs.SI↗

arXiv2022

Prescriptive maintenance with causal machine learning

Machine maintenance is a challenging operational problem, where the goal is to plan sufficient preventive maintenance to avoid machine failures and overhauls. Maintenance is often imperfect in reality and does not make the asset as good as new. Although a variety of imperfect maintenance policies have been proposed in the literature, these rely on strong assumptions regarding the effect of maintenance on the machine's condition, assuming the effect is (1) deterministic or governed by a known probability distribution, and (2) machine-independent. This work proposes to relax both assumptions by learning the effect of maintenance conditional on a machine's characteristics from observational data on similar machines using existing methodologies for causal inference. By predicting the maintenance effect, we can estimate the number of overhauls and failures for different levels of maintenance and, consequently, optimize the preventive maintenance frequency to minimize the total estimated cost. We validate our proposed approach using real-life data on more than 4,000 maintenance contracts from an industrial partner. Empirical results show that our novel, causal approach accurately predicts the maintenance effect and results in individualized maintenance schedules that are more accurate and cost-effective than supervised or non-individualized approaches.

econ.GN↗

arXiv2022

A new perspective on classification: optimally allocating limited resources to uncertain tasks

A central problem in business concerns the optimal allocation of limited resources to a set of available tasks, where the payoff of these tasks is inherently uncertain. In credit card fraud detection, for instance, a bank can only assign a small subset of transactions to their fraud investigations team. Typically, such problems are solved using a classification framework, where the focus is on predicting task outcomes given a set of characteristics. Resources are then allocated to the tasks that are predicted to be the most likely to succeed. However, we argue that using classification to address task uncertainty is inherently suboptimal as it does not take into account the available capacity. Therefore, we first frame the problem as a type of assignment problem. Then, we present a novel solution using learning to rank by directly optimizing the assignment's expected profit given limited, stochastic capacity. This is achieved by optimizing a specific instance of the net discounted cumulative gain, a commonly used class of metrics in learning to rank. Empirically, we demonstrate that our new method achieves higher expected profit and expected precision compared to a classification approach for a wide variety of application areas and data sets. This illustrates the benefit of an integrated approach and of explicitly considering the available resources when learning a predictive model.

cs.LG↗

arXiv2021

Expert-driven Trace Clustering with Instance-level Constraints

Within the field of process mining, several different trace clustering approaches exist for partitioning traces or process instances into similar groups. Typically, this partitioning is based on certain patterns or similarity between the traces, or driven by the discovery of a process model for each cluster. The main drawback of these techniques, however, is that their solutions are usually hard to evaluate or justify by domain experts. In this paper, we present two constrained trace clustering techniques that are capable to leverage expert knowledge in the form of instance-level constraints. In an extensive experimental evaluation using two real-life datasets, we show that our novel techniques are indeed capable of producing clustering solutions that are more justifiable without a substantial negative impact on their quality.

cs.LG↗