Neural Networks: Business Applications

Abstract

Though inspired by biological learning systems, artificial neural networks (ANNs) have moved steadily towards the field of statistics, established themselves as a complete alternative to traditional statistical models. The recent rise in research activities into ANNs has established that neural networks have powerful prediction and pattern classification capabilities. With these promising capabilities, ANN have reached into a wide range of financial and business related applications as an important quantitative modeling tool in the ambit of financial markets, operations research and marketing. The aim of this paper is to provide brief description of neural networks especially their architecture, benefits and limitations over traditional forecasting models as well as main areas of application in business.