Customer Churn Analysis and Prediction in Banking Industry using Machine Learning

2020 ◽  
Author(s):  
Ishpreet Kaur ◽  
Jasleen Kaur
Keyword(s):  
Machine Learning ◽  
Banking Industry ◽  
Customer Churn ◽  
Churn Analysis

scholarly journals Customer Churn in Retail E-Commerce Business: Spatial and Machine Learning Approach

2022 ◽  
Vol 17 (1) ◽  
pp. 165-198
Author(s):  
Kamil Matuszelański ◽  
Katarzyna Kopczewska
Keyword(s):  
Machine Learning ◽  
Urban Areas ◽  
Latent Dirichlet Allocation ◽  
Demographic Data ◽  
Numerical Data ◽  
Gradient Boosting ◽  
Modern Approach ◽  
Rural And Urban Areas ◽  
Customer Churn ◽  
Extreme Gradient Boosting

This study is a comprehensive and modern approach to predict customer churn in the example of an e-commerce retail store operating in Brazil. Our approach consists of three stages in which we combine and use three different datasets: numerical data on orders, textual after-purchase reviews and socio-geo-demographic data from the census. At the pre-processing stage, we find topics from text reviews using Latent Dirichlet Allocation, Dirichlet Multinomial Mixture and Gibbs sampling. In the spatial analysis, we apply DBSCAN to get rural/urban locations and analyse neighbourhoods of customers located with zip codes. At the modelling stage, we apply machine learning extreme gradient boosting and logistic regression. The quality of models is verified with area-under-curve and lift metrics. Explainable artificial intelligence represented with a permutation-based variable importance and a partial dependence profile help to discover the determinants of churn. We show that customers’ propensity to churn depends on: (i) payment value for the first order, number of items bought and shipping cost; (ii) categories of the products bought; (iii) demographic environment of the customer; and (iv) customer location. At the same time, customers’ propensity to churn is not influenced by: (i) population density in the customer’s area and division into rural and urban areas; (ii) quantitative review of the first purchase; and (iii) qualitative review summarised as a topic.

scholarly journals Exploratory analysis on prediction of loan privilege for customers using random forest

2018 ◽  
Vol 7 (2.21) ◽  
pp. 339 ◽  
Author(s):  
K Ulaga Priya ◽  
S Pushpa ◽  
K Kalaivani ◽  
A Sartiha
Keyword(s):  
Machine Learning ◽  
Random Forest ◽  
Data Model ◽  
Model Evaluation ◽  
Banking Industry ◽  
Performance Parameters ◽  
Training Set ◽  
Test Set ◽  
Learning Technique ◽  
Analytical Processing

In Banking Industry loan Processing is a tedious task in identifying the default customers. Manual prediction of default customers might turn into a bad loan in future. Banks possess huge volume of behavioral data from which they are unable to make a judgement about prediction of loan defaulters. Modern techniques like Machine Learning will help to do analytical processing using Supervised Learning and Unsupervised Learning Technique. A data model for predicting default customers using Random forest Technique has been proposed. Data model Evaluation is done on training set and based on the performance parameters final prediction is done on the Test set. This is an evident that Random Forest technique will help the bank to predict the loan Defaulters with utmost accuracy.  

scholarly journals Predicting Bank Operational Efficiency Using Machine Learning Algorithm: Comparative Study of Decision Tree, Random Forest, and Neural Networks

2020 ◽  
Vol 2020 ◽  
pp. 1-12
Author(s):  
Peter Appiahene ◽  
Yaw Marfo Missah ◽  
Ussiph Najim
Keyword(s):  
Machine Learning ◽  
Random Forest ◽  
Decision Tree ◽  
Banking Sector ◽  
Banking Industry ◽  
Predictive Accuracy ◽  
Learning Algorithm ◽  
Machine Learning Algorithms ◽  
Machine Learning Algorithm ◽  
And Performance

The financial crisis that hit Ghana from 2015 to 2018 has raised various issues with respect to the efficiency of banks and the safety of depositors’ in the banking industry. As part of measures to improve the banking sector and also restore customers’ confidence, efficiency and performance analysis in the banking industry has become a hot issue. This is because stakeholders have to detect the underlying causes of inefficiencies within the banking industry. Nonparametric methods such as Data Envelopment Analysis (DEA) have been suggested in the literature as a good measure of banks’ efficiency and performance. Machine learning algorithms have also been viewed as a good tool to estimate various nonparametric and nonlinear problems. This paper presents a combined DEA with three machine learning approaches in evaluating bank efficiency and performance using 444 Ghanaian bank branches, Decision Making Units (DMUs). The results were compared with the corresponding efficiency ratings obtained from the DEA. Finally, the prediction accuracies of the three machine learning algorithm models were compared. The results suggested that the decision tree (DT) and its C5.0 algorithm provided the best predictive model. It had 100% accuracy in predicting the 134 holdout sample dataset (30% banks) and a P value of 0.00. The DT was followed closely by random forest algorithm with a predictive accuracy of 98.5% and a P value of 0.00 and finally the neural network (86.6% accuracy) with a P value 0.66. The study concluded that banks in Ghana can use the result of this study to predict their respective efficiencies. All experiments were performed within a simulation environment and conducted in R studio using R codes.

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