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DATA MINING IN BANKING AND FINANCE: A NOTE FOR BANKERS
Rajanish Dass
Indian Institute of Management Ahmedabad
rajanish@iimahd.ernet.in
Abstract
Currently, huge electronic data repositories are being maintained by banks and other
financial institutions. Valuable bits of information are embedded in these data
repositories. The huge size of these data sources make it impossible for a human
analyst to come up with interesting information (or patterns) that will help in the
decision making process. A number of commercial enterprises have been quick to
recognize the value of this concept, as a consequence of which the software market
itself for data mining is expected to be in excess of 10 billion USD. This note is
intended for bankers, who would like to get aware of the possible applications of data
mining to enhance the performance of some of their core business processes. In this
note, the author discusses broad areas of application, like risk management, portfolio
management, trading, customer profiling and customer care, where data mining
techniques can be used in banks and other financial institutions to enhance their
business performance.
Keywords: Data Mining, Banks, Financial Institutions, Risk Management, Portfolio
Management, Trading, CRM, Customer Profiling
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DATA MINING IN BANKING AND FINANCE: A NOTE FOR BANKERS
Rajanish Dass
Indian Institute of Management Ahmedabad
rajanish@iimahd.ernet.in
As knowledge is becoming more and more synonymous to wealth creation and as a
strategy plan for competing in the market place can be no better than the information
on which it is based, the importance of knowledge and information in today’s
business can never be seen as an exogenous factor to the business. Organizations and
individuals having access to the right...