Application Of Data Mining To Financial Crisis Prewarning And Risk Control

Faced with increasingly fierce market competition, the traditional financial crisis prewarning model can not catch corporate crisis signal timely. Based on data mining to establish enterprise financial crisis prewarning system will be a very meaningful try. This paper presents the research in financial risk management and existing data mining methods, this paper will demonstrate the use of decision tree algorithms to enterprise financial crisis and risk control. This article firstly proposed the idea that judge financial crisis management warning signal from the perspective of project investment by using the decision tree algorithm. At the same time, the model will determine whether to trigger warning signals or not and record the causes and their types. Also in this paper we establish risk control model based on hedge theory, making up for the lack of taking risk control after forecasting the financial crisis into consideration of previous study. We hope that this paper can provide a reference for the small start-up companies and listed companies’ financial risk management.