Predicting customers churning in banking industry: A machine learning approach

Amgad Muneer, Rao Faizan Ali, Amal Alghamdi, Shakirah Mohd Taib, Ahmed Almaghthawi, Ebrahim Abdulwasea Abdullah Ghaleb

Abstract


In this era, machines can understand human activities and their meanings. We can utilize this ability of machines in various fields or applications. One specific field of interest is a prediction of churning customers in any industry. Prediction of churning customers is the state of art approach which predicts which customer is near to leave the services of the specific bank. We can use this approach in any big organization that is very conscious about their customers. However, this study aims to develop a model that offers a meaningful churn prediction for the banking industry. For this purpose, we develop a customer churn prediction approach with the three intelligent models Random Forest (RF), AdaBoost, and Support Vector Machine (SVM). This approach achieves the best result when the Synthetic Minority Oversampling Technique (SMOTE) is applied to overcome the unbalanced dataset and the combination of undersampling and oversampling. The method on SMOTED data has produced excellent results with a 91.90 F1 score and overall accuracy of 88.7% using RF. Furthermore, the experimental results show that RF yielded good results for the full feature-selected datasets.

Keywords


AdaBoost; Banking industry; Churning; Random forest; SMOTE; Support vector machine;

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DOI: http://doi.org/10.11591/ijeecs.v26.i1.pp539-549

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