Application of data mining to financial analysis:

The financial data in banking and financial industry is generally reliable and of high quality which facilitates systematic data analysis and data mining. Some of the typical cases are as follows −

1. Design and construction of data warehouses for multidimensional data analysis and data mining.

2. Loan payment prediction and customer credit policy analysis.

3. Classification and clustering of customers for targeted marketing.

4. Detection of money laundering and other financial crimes.

1: Design and construction of data warehouses for multidimensional data analysis and data mining

• View the debt and revenue changes by month, by region, by sector, and by other factors

• Access statistical information such as max, min, total, average, trend, etc.

2: Loan payment prediction/consumer credit policy analysis

• feature selection and attribute relevance ranking

• Loan payment performance

• Consumer credit rating

3: Classification and clustering of customers for targeted marketing

• multidimensional segmentation by nearest-neighbor, classification, decision trees, etc. to identify customer groups or associate a new customer to an appropriate customer group

4: Detection of money laundering and other financial crimes

• integration of from multiple DBs (e.g., bank transactions, federal/state crime history DBs)**

• Tools: data visualization, linkage analysis, classification, clustering tools, outlier analysis, and sequential pattern analysis tools (find unusual access sequences)