R studio
Description
Thera Bank – Loan Purchase Modeling
This case is about a bank (Thera Bank) which has a growing customer base. Majority of these customers are liability customers (depositors) with varying size of deposits. The number of customers who are also borrowers (asset customers) is quite small, and the bank is interested in expanding this base rapidly to bring in more loan business and in the process, earn more through the interest on loans. In particular, the management wants to explore ways of converting its liability customers to personal loan customers (while retaining them as depositors). A campaign that the bank ran last year for liability customers showed a healthy conversion rate of over 9% success. This has encouraged the retail marketing department to devise campaigns with better target marketing to increase the success ratio with a minimal budget. The department wants to build a model that will help them identify the potential customers who have a higher probability of purchasing the loan. This will increase the success ratio while at the same time reduce the cost of the campaign. The dataset has data on 5000 customers. The data include customer demographic information (age, income, etc.), the customer’s relationship with the bank (mortgage, securities account, etc.), and the customer response to the last personal loan campaign (Personal Loan). Among these 5000 customers, only 480 (= 9.6%) accepted the personal loan that was offered to them in the earlier campaign.
Link to the case file:
Thera Bank_Personal_Loan_Modelling-dataset-1.xlsx
You are brought in as a consultant and your job is to build the best model which can classify the right customers who have a higher probability of purchasing the loan. You are expected to do the following:
EDA of the data available. Showcase the results using appropriate graphs – (10 Marks)
Apply appropriate clustering on the data and interpret the output(Thera Bank wants to understand what kind of customers exist in their database and hence we need to do customer segmentation) – (10 Marks)
Build appropriate models on both the test and train data (CART & Random Forest). Interpret all the model outputs and do the necessary modifications wherever eligible (such as pruning) – (20 Marks)
Check the performance of all the models that you have built (test and train). Use all the model performance measures you have learned so far. Share your remarks on which model performs the best. – (20 Marks)
Hint : split <- sample.split(Thera_Bank$Personal Loan, SplitRatio = 0.7)
#we are splitting the data such that we have 70% of the data is Train Data and 30% of the data is my Test Data
train<- subset(Thera_Bank, split == TRUE)
test<- subset( Thera_Bank, split == FALSE)
Please note the following:
Please note the following:
1. There are two parts to the submission:
1. The output/report in any file format – the key part of the output is the set of observations and insights from the exploration and analysis
2. Commented R code in .R or .Rmd
2. Please dont share your R code and/or outputs only, we expect some verbiage/story too – a meaningful output that you can share in a business environment
3. Any assignment found copied/ plagiarized with other groups will not be graded and awarded zero marks
4. Please ensure timely submission as post-deadline assignment will not be accepted
Thanks
Collepals.com Plagiarism Free Papers
Are you looking for custom essay writing service or even dissertation writing services? Just request for our write my paper service, and we'll match you with the best essay writer in your subject! With an exceptional team of professional academic experts in a wide range of subjects, we can guarantee you an unrivaled quality of custom-written papers.
Get ZERO PLAGIARISM, HUMAN WRITTEN ESSAYS
Why Hire Collepals.com writers to do your paper?
Quality- We are experienced and have access to ample research materials.
We write plagiarism Free Content
Confidential- We never share or sell your personal information to third parties.
Support-Chat with us today! We are always waiting to answer all your questions.
