COMP8230 Assessment: Data Mining in the Banking Industry - A Report

This report examines the application of data mining within the banking industry, addressing the challenges posed by a competitive landscape where customers are increasingly drawn to smaller financial institutions. The study emphasizes the strategic importance of data mining as a tool for banks to gain and maintain market share. It details the data mining process, from data warehousing to analysis, and highlights its ability to extract valuable insights from existing legacy systems. The report outlines several key areas where data mining provides solutions, including customer retention, cross-selling, fraud detection, loan risk assessment, and customer loyalty. A literature review approach is employed, exploring various data mining techniques such as clustering, predictive modeling, classification, and association. The study presents a step-by-step data mining process, from business understanding to deployment, and provides a case study analyzing deposit data from a New York bank. The report concludes by illustrating how data mining is used in investment banking and marketing, offering recommendations for banks to leverage data for competitive advantage and customer satisfaction.