Feature representation for customer attrition risk prediction in retail banking

  • Authors:
  • Yanbo J. Wang;Gang Di;Junxuan Yu;Juan Lei;Frans Coenen

  • Affiliations:
  • Information Management Center, China Minsheng Banking Corp., Ltd., Beijing, China,Institute of Finance and Banking, Chinese Academy of Social Sciences, Beijing, China;Department of Science and Technology, The People's Bank of China, Beijing, China;Institute of Finance and Banking, Chinese Academy of Social Sciences, Beijing, China,Department of Financial Markets, Longjiang Bank, Harbin, Heilongjiang, China;Department of Retail Banking, China Minsheng Banking Corp., Ltd., Beijing, China;Department of Computer Science, University of Liverpool, Liverpool, UK

  • Venue:
  • ICDM'13 Proceedings of the 13th international conference on Advances in Data Mining: applications and theoretical aspects
  • Year:
  • 2013

Quantified Score

Hi-index 0.00

Visualization

Abstract

Nowadays, customer attrition is increasingly serious in commercial banks, particularly with respect tomiddle- and high-valued customers in retail banking. To combat this attrition it is incumbent for banks to develop a prediction mechanism so as to identify customers who might be at risk of attrition. This prediction mechanism can be considered to be a classifier. In particular, the problem of predicting risk of customer attrition can be prototyped as a binary classification task in data mining. In this paper we identify a set of features, for customer "attrition vs. non-attrition" classification, based on the RFM (Recency, Frequency and Monetary) model. The reported evaluation indicates that proposed set of features produces a much more effective classifier than that generated using previously suggested features.