Customer segmentation in Retail Banking Industry
: why Retail Banks should implement data mining techniques?

  • Eduarda Montalvão Baptista (Student)

Student thesis: Master's Thesis

Abstract

One of the most methodologies tool companies have to assure customer satisfaction and loyalty is customer segmentation. The purpose of this research is to explain what may be the most appropriate method to segment retail banking customers and how it can be implemented. Although demographic data is still the most commonly characteristics analysed by retail banks, behavioural segmentation as proved to achieve better results as it takes into account the heterogeneous patterns of services usage and consumption among individuals with the same age and income. Nevertheless, retail banks are the organizations by excellence mostly capable to apply this method, as it operates in the sector of activity with more organized and complete information about customers. Not only are known the consumption patterns as well as banks have access to information about customers’ income and attitudes towards investment and saving products. A comprehensive analysis was perform to assess the current state of the art of transaction processing system in Portugal, its operational model and how financial information could be collected. Given the extensive portions of data available, it was identified a technological solution to assist the information treatment. Data mining strategic implementation plan was drawn and this dissertation also assesses all the advantages of its integration by retail banks.
Date of Award8 Nov 2014
Original languageEnglish
Awarding Institution
  • Universidade Católica Portuguesa
SupervisorRute Xavier (Supervisor)

Designation

  • Mestrado em Gestão

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