Bank Direct Deposit Marketing

1. Bank Direct Deposit Marketing (80 points) The increasingly vast number of marketing campaigns over time has reduced its effect on the general public. Furthermore, economic pressures and competition have led marketing managers to invest in directed campaigns with a strict and rigorous selection of contacts. Such direct campaigns can be enhanced through the use of Business Intelligence (BI) and Data Mining (DM) techniques. BI is an umbrella term that includes architectures, tools, databases, applications and methodologies with the goal of using data to support decisions of business managers. DM is a BI technology that uses data-driven models to extract useful knowledge (e.g. patterns) from complex and vast data. Real-world data were collected from a Portuguese marketing campaign related with bank deposit subscription. The business goal is to find a model that can explain success of a contact, i.e. if the client subscribes the deposit. Such model can increase campaign efficiency by identifying the main characteristics that affect success, helping in a better management of the available resources (e.g. human effort, phone calls, time) and selection of a high quality and affordable set of potential buying customers. There are two main approaches for enterprises to promote products and/or services: through mass campaigns, targeting general indiscriminate public or directed marketing, targeting a specific set of contacts. Nowadays, in a global competitive world, positive responses to mass campaigns are typically very low, less than 1%. Alternatively, directed marketing focus on targets that assumable will be keener to that specific product/service, making this kind of campaigns more attractive due to its efficiency. Nevertheless, directed marketing has some drawbacks, for instance it may trigger a negative attitude towards banks due to the intrusion of privacy. It should be stressed that due to internal competition and current financial crisis, there are huge pressures for European banks to increase a financial asset. To solve this issue, one adopted strategy is offer attractive long-term deposit applications with good interest rates, in particular by using directed marketing campaigns. Also, the same drivers are pressing for a reduction in costs and time. Thus, there is a need for an improvement in efficiency: lesser contacts should be