Business application of split and compare quantiles
Salient Features in Action
Post-Deployment Analysis
Business Risk Analysis
Financial Decision-Making with SCQ
Effective Decision-Making
Granular Risk Assessment
0.001-480 48.0-60.0 60.0-67.0 67.0-73.0 73.0-78.0 78.0-82.0 82.0-86.0 86.0-89.0 89.0-92.5 92.5-86.0
20000
8000
506.27 279.96 307.58 268.13
1580.21
17500
7000
1651.50
Similarly, in the SCQ plot, we can replace probabilities with corresponding monetary values. Doing so allows us to analyze the total monetary value that we will get at a chosen probability threshold. For instance, at a 67% decision threshold, the total monetary transaction value can be estimated at $17288.51K. However, there is a possibility of losing $3508.1K due to model error. In such a scenario, stakeholders would like to select a decision threshold or bins of decision thresholds that minimize the dollar value loss resulting from model errors. By doing so, businesses can optimize their decision-making processes and minimize their overall monetary losses.
611.96
1611.72
15020
6000
667.03
2157.11
12000
5000
845.18
2185.72
10200
4000
856.11
2171.89
7500
3000
1411.31
2122.26
5000
2000
2121.81
1871.97
2114.03
2000
1000
1734.79
0
0
Conclusion
Traditional practices in explainable artificial intelligence (XAI) have typically been limited to basic model explainability and data visualization. However, it's vital to take things one step further, dissect the model and understand the potential risks associated with errors in the model. Surprisingly, a lower error rate doesn't necessarily equal lower financial loss and vice versa. As such, it's crucial not just to analyze the model’s errors statistically but also from a monetary standpoint before making a decision on the threshold. It is important to note that stakeholders may prefer choosing bins of different thresholds instead of a single flat decision boundary. This approach can provide a better trade-off between the monetary value of the model's errors and its accuracy.
Authors
Supriya Panigrahi Consultant, Fractal Dimension
Sray Agarwal
Sakshi Gulyani Consultant, Fractal Dimension
Principal Consultant, Fractal Dimension
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