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Domain knowledge

As explained in Financial AI in Practice

Subject-matter understanding that guides the interpretation and transformation of data into meaningful variables.

Domain knowledge is subject-matter understanding that guides feature engineering: it helps turn raw financial data into variables that represent meaningful concepts rather than arbitrary correlations. In a data asset layer, it supports preparing data for predictive modeling alongside attention to data quality, security, and regulatory compliance. section 1.4.1

Financial examples of domain-guided features include:

How Financial AI in Practice covers it

How deep it goes
Defines its role and gives feature examples, but stops short of implementation steps or code.
Examples
Uses volatility measures, fraud-velocity variables, and seasonal consumer-spending patterns as feature examples.
What you can do after
Apply it to shape financial features that represent meaningful concepts rather than arbitrary correlations.
How it connects
Links feature engineering with investment signals, fraud detection, and credit scoring.

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This explainer was generated by Manning's knowledge graph from the text of Financial AI in Practice. The section links point to the parts of the book it draws on.