Pilgrim Bank Case Study
Pilgrim Bank Case
September 26, 2013
How much do profits vary across customers? Provide statistical support for your answer.
Out of a sample of 31,634 Pilgrim Bank customers, from a population of 5 million total, and zero missing values, profits vary widely. The average customer profitability is $111.50. The minimum value of this data set is -$221 and the maximum is $2071. This describes that there is a very wide range. The median customer profitability is $9 and the standard deviation is $272.84. See exhibit one.
How does Pilgrim Bank make money from its customers and how can this explain the variation in customer profitability?
Pilgrim Bank makes its profit from customers with components including the balance in deposit accounts, the net interest spread, the fees collected by serving customers, and the interest from loans distributed. This can explain the variation in customer profitability because customer accounts generate different types of revenue for Pilgrim Bank. Each customer generates investment income by keeping a deposit balance. Fees are assessed for checking accounts, late payments and overdrafts. This is an important revenue source Pilgrim Bank. Since each customer varies in how many fees they rack up, each customer accounts for a different amount of the profitability from this source. Depending on the customer, a loan will be handled and the rate will be decided upon. Each customer would create revenue for the bank this way but not all would create the same amount.
Are online customers more profitable than offline customers? Provide statistical support for your answer.
The null hypothesis is that online and offline customers are no different and the alternative hypothesis is that there is a difference between online and offline customers. According to the data, online and offline customers are no different. We accept the null hypothesis and the differences are not meaningful. Of the 31,634 customers in the sample, 3854 are online customers and
September 26, 2013
How much do profits vary across customers? Provide statistical support for your answer.
Out of a sample of 31,634 Pilgrim Bank customers, from a population of 5 million total, and zero missing values, profits vary widely. The average customer profitability is $111.50. The minimum value of this data set is -$221 and the maximum is $2071. This describes that there is a very wide range. The median customer profitability is $9 and the standard deviation is $272.84. See exhibit one.
How does Pilgrim Bank make money from its customers and how can this explain the variation in customer profitability?
Pilgrim Bank makes its profit from customers with components including the balance in deposit accounts, the net interest spread, the fees collected by serving customers, and the interest from loans distributed. This can explain the variation in customer profitability because customer accounts generate different types of revenue for Pilgrim Bank. Each customer generates investment income by keeping a deposit balance. Fees are assessed for checking accounts, late payments and overdrafts. This is an important revenue source Pilgrim Bank. Since each customer varies in how many fees they rack up, each customer accounts for a different amount of the profitability from this source. Depending on the customer, a loan will be handled and the rate will be decided upon. Each customer would create revenue for the bank this way but not all would create the same amount.
Are online customers more profitable than offline customers? Provide statistical support for your answer.
The null hypothesis is that online and offline customers are no different and the alternative hypothesis is that there is a difference between online and offline customers. According to the data, online and offline customers are no different. We accept the null hypothesis and the differences are not meaningful. Of the 31,634 customers in the sample, 3854 are online customers and