Examples of data cleaning methods and data transformation methods in the

banking and finance context

Data Cleaning Methods:

1. Removal (duplicates, outliers): Removing duplicate transactions in a bank

account statement dataset to prevent double-counting or misleading
summaries.
2. Imputation (missing values): Filling in missing income data for loan
applicants using the median income of applicants with similar demographics
or credit history.
3. Correction (data types, format): Correcting the date format of transaction
records in a dataset to ensure consistency and facilitate time-series analysis.
4. Data validation: Ensuring that loan application data, such as credit scores
and income, falls within a reasonable range and adheres to predefined
constraints.
5. Consistency checks: Ensuring that account balances match the sum of
deposits and withdrawals in a dataset of bank transactions.

Data Transformation Methods:

1. Standardization: Standardizing financial ratios, such as the price-to-earnings

ratio, to allow for a comparison of stocks across different sectors.
2. Scaling (normalization): Scaling loan amounts to fall within a specific range
(e.g., between 0 and 1) to facilitate comparisons and improve machine
learning model performance.
3. Aggregation (summarization): Aggregating daily stock prices into weekly or
monthly averages for long-term trend analysis.
4. Filtering (subset selection): Filtering a dataset of stock transactions to
include only those with a trade volume above a certain threshold.
5. Merging (combining datasets): Merging customer data from an acquired
bank with the existing customer database based on unique identifiers.
6. Pivoting (reshaping data): Pivoting a long-format dataset of account
balances over time into a wide format where each column represents a
different month or quarter.
7. Feature extraction (new variables): Deriving new features such as debt-to-
income ratio or credit utilization ratio from raw loan application data to
improve credit risk assessment.
 8. Data encoding (categorical to numerical): Encoding categorical data, such as
employment status or loan purpose, as numerical values for use in machine
learning algorithms.

These examples demonstrate how data cleaning and data transformation methods
can be applied to various banking and finance scenarios to improve data quality,
facilitate analysis, and enhance decision-making.