Question

For the following industry, answer the questions below: Banking

a) Describe the nature of data sources in your chosen industry.

b) Describe one possible data mining application in your industry.

c) List and discuss the major issues that need to be tackled

Answer 1

a)the nature of data sources:-Primary data source for commercial paper,selected interest and foreign exchange rates,reserve of depository institutions,money supply,consumer credit,commercial bank assets and liabilities,industrial production and capacity utilization,flow of funds etc. Other primary data sources are housing and construction related data,including new residential construction,new residential sales and construction spending.manufacturing and trade data like manufacturers,inventories and orders.Data for economics analysis like Gross domestic product(GDP),related data from National income and product accounts(NIPA),Gross state Product(GSP),,personal income,(national,state,and local area),international balance of payments and related data and monthly international trade.

B).one possible data mining application:- 1.Customer retention in banking sector:-Today customer have so many opinions with regard to where they can choose to do their business. Executive in the banking industry,therefore, must be aware that if they are not giving each customer their full attention,the customer can simply find another bank that will.Data mining can help in targeting new customer for products and services and in discovering a customer's previous purchasing patterns so that the bank will be able to retain existing customers by offering incentives that are individually tailored to each customer's needs.

To improve customer retention,three steps are needed:

1)measurement the customer retention

2)Identification of root cause of defection and related key services issue

3)Development of corrective action to improve retention

Measurement of existing customer retention rates is the first significant step in the task of improving loyalty.This involves measuring retention rate and profitability analysis.

C) List and Discuss the major issues

1) Macroeconomic risk- These risks are top concern for all survey respondent despite the fact that many economics have return to positive growth. For bankers, uncertainties in macroeconomics environments together with persistent end high level of debt across sovereign, corporate consumer sector lay the ground work for asset bubble to bust in the event of significant

2) Regulation- Bankers recognize the need for tougher controls,concerns were raised about the volume and complexity of current regulations which were stated to eat into management time and overall industry margins.Bankers were also concerned about the impact of rising regulatory requirements on innovation and diversity,as well as their ability to compete effectively against smaller players who are not exposed to the same regulatory scrutiny.

3)political interference:-Bankers are aware of the potential for greater political interference in how they manage their operations,lending polices,and taxation based on a host of macro and microeconomics.

4)Technology risk:-of all the most urgent concerns,outdated core IT system were a significant concern for global bankers.Faliure to invest appropriately in secure,agile system that can enhance digital and mobile banking can result in significant loss while compounding the risk of cyber attacks.

5)Criminality:-Cyber attacks are increasingly seen as a top concern for bankers.Many respondents worried that banks are not currently equipped to prevent attacks from opportunistic hackers,organized criminals,or government-funded corporate espionage.