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Supervised Learning Problem For Solving

The document describes a dataset from Thera Bank containing information on 5000 customers, focusing on their demographics and responses to a personal loan campaign, which had a 9.6% acceptance rate. The bank aims to improve conversion rates of liability customers to personal loan customers through targeted marketing strategies. The objective includes using classification models to predict the likelihood of customers accepting personal loans, with specific steps outlined for data analysis and model evaluation.

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panchariyapiyush2013
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26 views2 pages

Supervised Learning Problem For Solving

The document describes a dataset from Thera Bank containing information on 5000 customers, focusing on their demographics and responses to a personal loan campaign, which had a 9.6% acceptance rate. The bank aims to improve conversion rates of liability customers to personal loan customers through targeted marketing strategies. The objective includes using classification models to predict the likelihood of customers accepting personal loans, with specific steps outlined for data analysis and model evaluation.

Uploaded by

panchariyapiyush2013
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Data Description:

The file Bank.xls contains data on 5000 customers. The data include customer
demographic information (age, income, etc.), the customer's relationship with the bank
(mortgage, securities account, etc.), and the customer response to the last personal loan
campaign (Personal Loan). Among these 5000 customers, only 480 (= 9.6%) accepted
the personal loan that was offered to them in the earlier campaign.

Domain:
Banking

Context:
This case is about a bank (Thera Bank) whose management wants to explore ways of
converting its liability customers to personal loan customers (while retaining them as
depositors). A campaign that the bank ran last year for liability customers showed a
healthy conversion rate of over 9% success. This has encouraged the retail marketing
department to devise campaigns with better target marketing to increase the success
ratio with minimal budget.

Attribute Information:
 ID : Customer ID
 Age : Customer's age in completed years
 Experience : #years of professional experience
 Income : Annual income of the customer ($000)
 ZIP Code : Home Address ZIP code.
 Family : Family size of the customer
 CCAvg : Avg. spending on credit cards per month ($000)
 Education : Education Level. 1: Undergrad; 2: Graduate;
3: Advanced/Professional
 Mortgage : Value of house mortgage if any. ($000)
 Personal Loan : Did this customer accept the personal loan offered in the
last campaign?
 Securities Account : Does the customer have a securities account with the bank?
 CD Account : Does the customer have a certificate of deposit (CD)
account with the bank?
 Online : Does the customer use internet banking facilities?
 Credit card : Does the customer use a credit card issued by
UniversalBank?

Learning Outcomes:
 Exploratory Data Analysis
 Preparing the data to train a model
 Training and making predictions using a classification model
 Model evaluation

Objective:
The classification goal is to predict the likelihood of a liability customer buying personal
loans.

Steps and tasks:


1. Read the column description and ensure you understand each attribute well
2. Study the data distribution in each attribute, share your findings (15 marks)
3. Get the target column distribution. Your comments (5 marks)
4. Split the data into training and test set in the ratio of 70:30 respectively (5 marks)
5. Use different classification models (Logistic, K-NN and Naïve Bayes) to predict
the likelihood of a customer buying personal loans (15 marks)
6. Print the confusion matrix for all the above models (5 marks)
7. Give your reasoning on which is the best model in this case and why it performs
better? (5 marks)

References:
 Data analytics use cases in Banking
 Machine Learning for Financial Marketing

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