Evaluating Reputation of Internet Financial Platform: An Improved Fuzzy Evaluation Approach

Abstract

Recent frequent “thunderstorm incidents” of the internet financial platforms (IFPs) have caused the panic of investors. In order to measure and reduce the investment risk of IFPs, the focus of this study is to evaluate the reputation of IFPs regarding investment risk. First, the reputation evaluation indicator system of IFPs is constructed from two dimensions of direct and indirect reputations. Then, based on this system, an improved fuzzy evaluation approach (IFEA) integrating the method of fuzzy comprehensive evaluation (FCE), the analytic hierarchy process (AHP), and the factor analysis (FA) are proposed for evaluating the reputation of IFPs. Finally, a case study based on the data of 20 peer-to-peer (P2P) lending platforms from “Home of Online Loans” (HOL) in China is used to illustrate the IFEA. Results show that the IFEA can reduce uncertainty and randomness in the determination process of indicator weight and membership degree and therefore accurately obtain the reputation level of IFPs and help investors make better decisions. Meanwhile, the key factors in determining the reputation of IFPs are identified, thereby improving the reputation level of the IFPs.