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Application of Machine Learning on Client Prediction in Bank Marketing

In: Economic Management and Big Data Application Proceedings of the 3rd International Conference

Author

Listed:
  • Ziyue Li
  • Zhang Xu
  • Yiqiaochu Zhou

Abstract

High liquidity is one of the most significant objectives in the banking industry. To ensure stable liquidity, client prediction is a common method adopted by bank managers. Although there has been some literature discussing the methods to make client predictions, it lacks quantitative comparison between algorithms. This study will focus on the prediction of bank clients and compare the effectiveness of different algorithms in machine learning (neural network, decision tree, logistic regression). It is designed to compare the five metrics (Type I sample f1-score, Type II sample f1-score, accuracy, Area Under Curve, Kolmogorov-Smirnov) to distinguish the feasibility of different algorithms. The higher index represents the better algorithm. As the results, the neural network has the highest AUC (0.85) and highest Type I sample f1-score (0.50), while the logistic regression has the highest accuracy (0.90), KS (0.64), and Type II sample f1-score (0.50). (0.94). According to reality, the neural network is suggested to be the optimal algorithm that needs to be adopted by bank managers for client prediction.

Suggested Citation

  • Ziyue Li & Zhang Xu & Yiqiaochu Zhou, 2024. "Application of Machine Learning on Client Prediction in Bank Marketing," World Scientific Book Chapters, in: Sikandar Ali Qalati (ed.), Economic Management and Big Data Application Proceedings of the 3rd International Conference, chapter 96, pages 1064-1076, World Scientific Publishing Co. Pte. Ltd..
  • Handle: RePEc:wsi:wschap:9789811270277_0096
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    Keywords

    Big Data; Information Management; Economic; Data Applications; Blockchain; E-commerce;
    All these keywords.

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • C8 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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