an applicationof cluster analysisinthe financial services（一个集群applicationof analysisinthe金融服务）.docVIP

An Application of Cluster Analysis in the Financial Services Industry Satish Nargundkar and Timothy J. Olzer; May Speh, Strategic Decision Services; Atlanta, GA  ABSTRACT Analytical models are critical in the Financial Services Industry in every phase of the credit cycle – Marketing, Acquisitions, Customer Management, Collections, and Recovery. While such models are now commonplace, the search for competitive advantage requires continuous improvement in the models. Customization of the models for each segment of the population is a crucial step towards achieving that end. Segments in the population may be defined judgmentally using one or two variables, but Cluster Analysis is an excellent statistical tool for multivariate segmentation. The clusters may be used to drive the model development process, to assign appropriate strategies, or both. This paper discusses the FASTCLUS procedure as a tool for segmentation of a population. The first phase involves preparing the data for clustering, which includes handling missing values and outliers, standardizing, and reducing the number of variables using tools such as the FACTOR procedure. The FASTCLUS discussion emphasizes the assumptions, the options available, and the interpretation of the SAS( output. Finally, the business interpretation of the cluster analysis is provided within the context of this specific industry. This enables the analyst to identify the appropriate number of clusters to use in model development or strategic planning. Introduction Statistical Models are used for several purposes in the Financial Services industry, such as predicting the likelihood of response to a credit offer, predicting risk for making approval decisions, predicting likelihood of rolling to a higher level of delinquency, etc. Whatever the predicted variable, a single model may not perform effectively across the population because different segments in the population with very different characteristics usually exist