Abstract
Churn prediction is vital to companies as to identify potential churners and prevent losses in advance. Although it has been addressed as a classification task and a variety of models have been employed in practice, fund management services have presented several special challenges. One is that financial data is extremely imbalanced since only a tiny proportion of customers leave every year. Another is a unique cost-sensitive learning problem, i.e., costs of wrong predictions for churners should be related to their account balances, while costs of wrong predictions for non-churners should be the same. To address these issues, this paper proposes a new churn prediction model based on ensemble learning. In our model, multiple classifiers are built using sampled datasets to tackle the imbalanced data issue while exploiting data fully. Moreover, a novel sampling strategy is proposed to deal with the unique cost-sensitive issue. This model has been deployed in one of the leading fund management institutions in Australia, and its effectiveness has been fully validated in real applications.
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Brownlow, J., Chu, C., Fu, B., Xu, G., Culbert, B., Meng, Q. (2018). Cost-Sensitive Churn Prediction in Fund Management Services. In: Pei, J., Manolopoulos, Y., Sadiq, S., Li, J. (eds) Database Systems for Advanced Applications. DASFAA 2018. Lecture Notes in Computer Science(), vol 10828. Springer, Cham. https://doi.org/10.1007/978-3-319-91458-9_49
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DOI: https://doi.org/10.1007/978-3-319-91458-9_49
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