Data Mining: a Tool for the Enhancement of Banking Sector
Data Mining: A Tool for the Enhancement of Banking Sector
Shipra Kalra; Rachika Gupta kalra.shipra87@gmail.com; guptarachika@yahoo.co.in
Lecturer, Chanderprabhu Jain College of Higher Studies and School of Law,
Sector A-8, Narela, Delhi-110040
Abstract
Data mining is emerging as a very useful tool for providing valuable information from large databases and enabling managers and business executives to make hard core decisions in a much easier and effective manner. It is a process of analyzing the data from various perspectives and summarizing it into valuable information. This paper defines what data mining is and how does it works. It then focuses on the use of data mining in banking industry on various areas like market segmentation, direct mail marketing, customer churn, fraud detection and risk management.
Keywords: data mining, market segmentation, direct mail marketing, customer churn, fraud detection, risk management
1. Introduction
Almost every organization today is recognizing the importance of utilizing data mining in their businesses. Data mining is emerging as a very useful tool for providing valuable information from large databases and enabling managers and business executives to make hard core decisions in a much easier and effective manner. Not only data mining helps to extract useful knowledge from large amount of data but it is also helping in declining various costs like cost of computation power and also reduces time for decision making and knowledge discovery.
Data mining is primarily used today by organizations with a strong consumer focus - retail, financial, communication, and marketing organizations. It enables these organizations to determine relationships among "internal" factors such as price, product positioning, or staff skills, and "external" factors such as economic indicators, competition, and customer demographics [13]. Data mining can help these organizations to better serve their customers, and increase the effectiveness of
Shipra Kalra; Rachika Gupta kalra.shipra87@gmail.com; guptarachika@yahoo.co.in
Lecturer, Chanderprabhu Jain College of Higher Studies and School of Law,
Sector A-8, Narela, Delhi-110040
Abstract
Data mining is emerging as a very useful tool for providing valuable information from large databases and enabling managers and business executives to make hard core decisions in a much easier and effective manner. It is a process of analyzing the data from various perspectives and summarizing it into valuable information. This paper defines what data mining is and how does it works. It then focuses on the use of data mining in banking industry on various areas like market segmentation, direct mail marketing, customer churn, fraud detection and risk management.
Keywords: data mining, market segmentation, direct mail marketing, customer churn, fraud detection, risk management
1. Introduction
Almost every organization today is recognizing the importance of utilizing data mining in their businesses. Data mining is emerging as a very useful tool for providing valuable information from large databases and enabling managers and business executives to make hard core decisions in a much easier and effective manner. Not only data mining helps to extract useful knowledge from large amount of data but it is also helping in declining various costs like cost of computation power and also reduces time for decision making and knowledge discovery.
Data mining is primarily used today by organizations with a strong consumer focus - retail, financial, communication, and marketing organizations. It enables these organizations to determine relationships among "internal" factors such as price, product positioning, or staff skills, and "external" factors such as economic indicators, competition, and customer demographics [13]. Data mining can help these organizations to better serve their customers, and increase the effectiveness of
References: [11] Ch08.fm Page 191 Monday, September 6, 1999 10:11 AM; Industry Applications of Data Mining.