FIN Investors employ neural networks to forecast the performance of

stock index futures, currencies, natural gas and oil stocks, treasury bond
futures, gold stocks, and other major investments.

systems, neural networks help detect fraud in credit card

• In banking
transactions and insurance claims, fight crime, and gauge customer
satisfaction.
Figure TG 4.2illustrates how a neural network might process a typical
mortgage application. Note that the network has three levels of interconnected
nodes (similar to the human brain): an input layer; a middle, or hidden, layer%
and an output layer. When the neural network is trained, the strengths, or
weights, of its connections change. Inour example, the input nodes are age,
income, occupation, marital status, employer, length of time with that
employer, the desired amount of the mortgage, and the current interest rate.
The neural network has already been trained with data input from many
mortgage applications, successful and unsuccessful. That is, the neural
network has established a pattern as to which input variables are necessary
for a successful mortgage application. Interestingly, the neural network can
adjust as both mortgage amounts and interest rates increase or decrease.

Machine learning systems often use neural networks. Machine learning

systems are artificial intelligence systems that learn from data. For instance,
a machine learning system can be trained on email messages to learn to
distinguish between spam and non-spam messages. After learning, the
system can then be used to classify new email messages into spam and non-
spam folders. The following are other examples of machine learning:
Optical character recognition: Printed, handwritten characters are
recognized automatically based on previous examples.

•Facialrecognition: Identify faces in images.

Topic identification: Categorize news articles as to whether they are about

politics, sports, entertainment, and so on.

•Fraud detection: Identify credit card transactions that may be fraudulent.

• Custome
to a
segmentation:
particular promotion.
Identify which customers may respond positively

to
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Because neural networks are difficult researchers at
up and use, two
the University of Vienna have created a system called N2Sky. N2Sky helps to
set up neural networks in
the cloud so that their services can be shared. The
two researchers want to make neural networks available as a shared resource