Clustering algorithms for bank customer segmentation

Abstract

Market segmentation is one of the most important area of knowledge-based marketing. In banks, it is really a challenging task as data bases are large and multidimensional. In the paper we consider cluster analysis, which is the methodology, the most often applied in this area. We compare clustering algorithms in cases of high dimensionality with noise. We discuss using three algorithms: density based DBSCAN, k-means and based on it two-phase clustering process. We compare algorithms concerning their effectiveness and scalability. Some experiments with exemplary bank data sets are presented.