Title: Using data mining to integrate recency-frequency-monetary value analysis and credit scoring methods for bank customer behaviour analysis

Authors: Mohammad Khanbabaei; Pantea Parsi; Najmeh Farhadi

Addresses: Department of Information Technology Management, Science and Research Branch, Islamic Azad University, Tehran, Iran ' Department of Information Technology Management, Science and Research Branch, Islamic Azad University, Tehran, Iran ' Department of Information Technology Management, Science and Research Branch, Islamic Azad University, Tehran, Iran

Abstract: Banks apply credit scoring to identify customers with low credit risk. Additionally, recency-frequency-monetary value (RFM) analysis method is suitable for identifying valuable bank customers. Data mining techniques can be used to discover useful patterns hidden in customer data. However, in previous research, data mining has been used separately in both credit scoring and RFM approaches. To evaluate customer behaviour, banks must employ credit scoring and RFM analysis method, simultaneously. This study proposes a framework for using data mining techniques to integrate credit scoring and RFM methods in the field of banking. In this framework, k-means had better performance than Kohonen network and DBSCAN to identify and cluster valuable customers based on the RFM and credit scoring indices. Moreover, the C5 decision tree, BN, and SVM with 94.10%, 92.71%, and 92.36% accuracy had better performance to classify valuable bank customers based on RFM and credit scoring indices.

Keywords: data mining; RFM method; credit scoring; banking; marketing.

DOI: 10.1504/IJDMMM.2023.134598

International Journal of Data Mining, Modelling and Management, 2023 Vol.15 No.4, pp.369 - 392

Received: 06 Nov 2022
Accepted: 06 Mar 2023
Published online: 30 Oct 2023 *

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