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Predicting direct marketing response in banking: comparison of class imbalance methods

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Abstract

Customers’ response is an important topic in direct marketing. This study proposes a data mining response model supported by random forests to support the definition of target customers for banking campaigns. Class imbalance is a typical problem in telemarketing that can affect the performance of the data mining techniques. This study also contributes to the literature by exploring the use of class imbalance methods in the banking context. The performance of an undersampling method (the EasyEnsemble algorithm) is compared with that of an oversampling method (the Synthetic Minority Oversampling Technique) in order to determine the most appropriate specification. The importance of the attribute features included in the response model is also explored. In particular, discriminative performance was enhanced by the inclusion of demographic information, contact details and socio-economic features. Random forests, supported by an undersampling algorithm, presented very high prediction performance, outperforming the other techniques explored.

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Authors and Affiliations

  1. Faculdade de Engenharia, Universidade do Porto, Rua Dr. Roberto Frias, 4200-465, Porto, Portugal

    Vera L. Miguéis, Ana S. Camanho & José Borges

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  1. Vera L. Miguéis
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  2. Ana S. Camanho
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  3. José Borges
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Correspondence to Vera L. Miguéis.

Appendix

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Table 3 Dataset variables
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Table 4 Variable importance measure
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Miguéis, V.L., Camanho, A.S. & Borges, J. Predicting direct marketing response in banking: comparison of class imbalance methods. Serv Bus 11, 831–849 (2017). https://doi.org/10.1007/s11628-016-0332-3

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