Analysis of Customer Data

 The database provided is from a bank which maintains customer details

Problem including information on the demographic and professional details.

Statement  A commercial bank wants to leverage the customer database to reduce

loss due to high default rate.
  Income is assumed to be in INR.
 “Income” is assumed to be hourly wages.
Assumptions (Monthly income = Income * 8 * 22)
 “Limit” indicates the total limit for given number of cards.
 “Education” indicates number of years of formal education.
 “Balance” indicates available credit limit of individual.
Spends = Limit – Balance
 The formula used is Quartile exclusive

Data
Insufficiency  Previous track record of individuals is needed to analyse spending
and repayment patterns.
 Total count - 100

Gender Ethnicity
Male
Caucasian Asian African American
48%

African Amer-
ican
25%
Caucasian

Analysis of Fe-
male
50%

Population
Asian
52% Male Female
26%

Spread of Age in Population

90 82
80 72
70
59 61 61
60

Frequency
50
40 32 31
30
20
10 2
0
30 40 50 60 70 80 90 100
Age
 Ethnicity vs credit rating
100%

90%

80%
46
50 49
54

Effect of
70%

Ethnicity?
60%

50%

24
40% 24
27
24
30%

20%
30
27
23 22
10%

0%
Q1 Q2 Q3 Q4

Asian African Caucasian

 1. Category of people most likely to default on payments.
Identifying High and low risk customers based :
 On Spending habits
 On Monthly income
 On Ethnicity

Business 

On Marital Status
On Student or Working professionals
Questions  On Age and Gender
2. Identifying favourable and non-favourable customers based on
complete credit utilization (Zero balance)
3. Category of people who can be targeted to maximize credit
limit usage, based :
 On percentage of credit utilization
 On Monthly income
 Percentage of Credit Utilization
Who to target to 140
131

maximize credit 120 116

limit usage?
Based on percentage of Credit 100

limit utilization, we can analyse

the data and observe that 91

No. of People
80
customers have a utilization of
67 68
less than 85%.
60
This can be improved by
offering incentives like
cashbacks. 40

Further analysis can be carried

out by identifying high income 20
11
customers within this range. 4
0
75 80 85 90 95 100
  Within the given data set, data points with zero credit balance have been
extracted.
 These represent people with exhausted credit limit – complete credit utilization
 Further analysis is carried out on these points based on features like ethnicity,
gender and marital status.
If Credit Balance  Target customers can be identified by analysing the monthly income of these
is Zero? data points.

Ethnic Composition of Zero Credit Balance Population

A credit balance of Zero means
that the individual has fully Non-Zero Credit Balance Caucasian
Asian African American
exhausted the credit limit on all 28
21
cards (100% credit utilization)
41
and has no further available
limit.

310

Zero Credit balance

 Monthly Income of Zero Credit Balance Population
Low income – Zero credit balance 50

implies high risk and over- 45

45

utilization 40

35
High income – Zero credit balance
implies low risk and good credit 30

Frequency
utilization 25
21
20
15
15
Monthly Income
Q1 3142.66 10
Q2 4776.64 6
Q3 6137.70 5
2
IQR = Q3-Q1 2995.04 1
0
1.5 * IQR 4492.55 3000 6000 9000 12000 15000 18000

Q1 - 1.5IQR -1349.9 Monthly Income

Q3 + 1.5IQR 10630.25

Non-Favourable Customers Favourable Customers

Box Plot
Monthly Income
Q1 3142.66
Q2 4776.64
Q3 6137.70
IQR = Q3-Q1 2995.04
1.5 * IQR 4492.55

Q1 - 1.5IQR -1349.90
Q3 + 1.5IQR 10630.25
For Population in the
category of Zero Credit
Balance, Spend per
card can be analysed
Spend per Card
Q1 500.25
Q2 744.75
Q3 1168
IQR = Q3-Q1 667.75
1.5 * IQR 1001.63

Q1 - 1.5IQR -501.38
Q3 + 1.5IQR 2169.63
 Data Analysis
% of credit utilization Monthly Income analysis Monthly Income analysis (Zero
analysis (total population) Credit Balance) Age of Population

55.66
Mean 91.04 Mean 7958.5 Mean 5073 Mean 75
0.862
Standard Error 0.34 Standard Error 310.1 Standard Error 285 Standard Error 49
Median 90.13 Median 5828.3 Median 4777 Median 56
Standard
Mode 100.00 Mode 4187.6 Deviation 2703 Mode 66
Standard Standard Standard 17.24
Deviation 6.76 Deviation 6203.0 Sample Variance 7303624 Deviation 981
38477110 297.5
Sample Variance 45.67 Sample Variance .7 Kurtosis 4 Sample Variance 558
-
1.065
Kurtosis -0.87 Kurtosis 2.9 Skewness 2 Kurtosis 58
0.011
Skewness -0.13 Skewness 1.7 Range 14388 Skewness 496
Range 27.69 Range 31025.3 Minimum 1824 Range 75
Minimum 72.31 Minimum 1822.3 Maximum 16212 Minimum 23
Maximum 100.00 Maximum 32847.6 Sum 456566 Maximum 98
36416.7 3183409.
Sum 6 Sum 5 Count 90 Sum 22267
Count 400.00 Count 400.0 Count 400
Descriptive Analysis
• The sample consists of 100 people – 48% male and 52% female population. Half of the
population belongs to Caucasian and other half is divided equally between African American and
Asian.
• The bar graph represents the customers from different regions in each quartile and their credit
ratings. We could infer that in each region the customers are distributed approximately equally
into all quartiles.
• The box plot addresses the group of people with zero credit balance and ranges of the income.
For people in the higher income range, it becomes easier to pay off the debt but customers in
the lower income range are less favorable for credit worthiness as they might not be able to pay
off the debt.
• This box plot shows that the outliers on the top of the graph are outliers and the most favorable
customers.
• The graph of the population with zero credit balance is left skewed which indicates that the
number of non-favourable customers are higher than favourable customers.
Descriptive Analysis
• 91 people have credit utilisation below 85%.
• From the analysis based on credit utilisation the customers with a potential to spend
more can be identified and they can be given incentives, discounts and cash backs.
• The sample consisted of 90 people with the zero balance or 100% credit utilization. Out
of these 90 individuals, people with higher income are the favorable set of customers
whereas the people with lower income pose a risk of default.
Thank You .