Retail Assets Management in Indian Banking : Credit Marketing Model Using Data Mining Approach

With the increasing competition, decreasing customer loyalty and plethora of banking products, it has become essential in today’s sluggish economy for banks to accurately position themselves. This paper presents a credit marketing model using an advanced data mining for acquisition segmentation and profit forecast. The average profitability (NPV) could increase with the use of an advanced data mining approach since the profit accruals vary across segments. Profit Forecast Models are built across each segment during the average life of a product. The model implementation on a Bank’s test data results in the robust segment distribution in groups of 22%, 29%, 14% and 35%, which forms a good representation of the population. Segments demonstrate distinction across their demographic and credit behavior profiles. The gains in our model scenario over a random scenario stands at Rs. 168 and Rs.29 for the top two segments respectively