Systematic Review of Financial Distress Identification using Artificial Intelligence Methods

ABSTRACT

The study presents a systematic review of 232 studies on various aspects of the use of artificial intelligence methods for identification of financial distress (such as bankruptcy or insolvency). We follow the guidelines of the PRISMA methodology for performing the systematic reviews. The study discusses bankruptcy-related financial datasets, data imbalance, feature dimensionality reduction in financial datasets, financial distress prediction, data pre-processing issues, non-financial indicators, frequently used machine-learning methods, performance evolution metrics, and other related issues of machine-learning-based workflows. The study findings revealed the necessity of data balancing, dimensionality reduction techniques in data preprocessing, and allow researchers to identify new research directions that have not been analyzed yet.

Disclosure statement

No potential conflict of interest was reported by the author(s).