Clustering Analysis for Credit Default Probabilities in a Retail Bank Portfolio
Journal Title: Database Systems Journal - Year 2012, Vol 3, Issue 2
Abstract
Methods underlying cluster analysis are very useful in data analysis, especially when the processed volume of data is very large, so that it becomes impossible to extract essential information, unless specific instruments are used to summarize and structure the gross information. In this context, cluster analysis techniques are used particularly, for systematic information analysis. The aim of this article is to build an useful model for banking field, based on data mining techniques, by dividing the groups of borrowers into clusters, in order to obtain a profile of the customers (debtors and good payers). We assume that a class is appropriate if it contains members that have a high degree of similarity and the standard method for measuring the similarity within a group shows the lowest variance. After clustering, data mining techniques are implemented on the cluster with bad debtors, reaching a very high accuracy after implementation. The paper is structured as follows: Section 2 describes the model for data analysis based on a specific scoring model that we proposed. In section 3, we present a cluster analysis using K-means algorithm and the DM models are applied on a specific cluster. Section 4 shows the conclusions.
Authors and Affiliations
Adela Tudor, Elena Andrei Dragomir
Keywords
Related Articles
- EP ID EP161579
- DOI -
- Views 85
- Downloads 0
Architecture of Automated Database Tuning Using SGA Parameters
Business Data always growth from kilo byte, mega byte, giga byte, tera byte, peta byte, and so far. There is no way to avoid this increasing rate of data till business still running. Because of this issue, database...
Cloud Computing and Smart Grids
Increasing concern about energy consumption is leading to infrastructure that supports real-time, two-way communication between utilities and consumers, and allows software systems at both ends to control and manage powe...
Integration of Web Technologies in Software Applications. Is Web 2.0 a Solution?
Starting from the idea that Web 2.0 represents “the era of dynamic web”, the paper proposes to provide arguments (demonstrated by physical results) regarding the question that is at the foundation if this article. Due to...
Commercially Available Data Mining Tools used in the Economic Environment
This paper presents some of the most common commercially available data mining tools, with their most important features, side by side, and some considerations regarding the evaluation of data mining tools by companies t...
Problem Decomposition Method to Compute an Optimal Cover for a Set of Functional Dependencies
The paper proposes a problem decomposition method for building optimal cover for a set of functional dependencies to decrease the solving time. At the beginning, the paper includes an overview of the covers of func...