FUTURIST TECH SOLUTION CONSULTANCY

CLIENT PROJECT
CLOSURE AND
REFLECTION

Tolulope Adelodun Adewara

21063644
 EXPLORING FACTORS LEADING TO CHURN AND
PREDICTING CUSTOMER CHURN FOR CHARIS BANK
PLC

Presentation Outline
•Solution/Model Testing Plan, Evaluation & Outputs
•Data visualisation & communication of insight.  
•Interpretation & application in comparison to Data Analysis
Hypothesis
•Conclusion, recommendations & next steps for Client
•Key Lessons Learnt and Personal Reflection
•Client feedback

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EXECUTIVE SUMMARY OF PREVIOUS STAGE 

• In the project initiation phase, we embarked on a journey to identify factors leading to churn and
predict customer churn for Charis Bank. Defining the project's scope, formulated assumptions, and
BLOG 1 developed a project plan alongside a risk register to anticipate and mitigate potential challenges. 

• The Data Collection and Analysis Phase undertook a process of gathering relevant data regarding
customer behavior. This involved sourcing open datasets, Data analysis was conducted, employing 
exploratory data analysis to discover patterns and meaningful insights. Comprehensive literature
BLOG 2 reviews and case study that aligned with the project's objectives.

• The Research design and model methodologies Phase, we delved deep into model methodologies,
exploring various techniques to predict customer churn, model evaluation, we identified the most
suitable model to predict churn behavior. This phase concluded with a recommendation of the
BLOG 3 appropriate model that the Bank could implement to address their customer churn challenges. 
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A BRIEF ABOUT THE CLIENT

Charis Bank Plc (CBP) is financial institution that accepts
deposits from customers and provides various financial
services across Nigeria.

The bank embarked on an ambitious expansion strategy, with

a focus on increasing their profitability . However, some of
there customers are leaving the bank leading to an increase in
customer churn rate in the bank thereby affecting the bank’s
goal .
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INTRODUCTION INTO CHURN ANALYSIS

Analyzing churn is of utmost importance as it provides valuable insights

into customer behavior, ultimately aiding in efforts to retain customers and
elevate their satisfaction levels.

Project Objective
This project's primary focus is on investigating the factors responsible for
churn and developing predictive capabilities for identifying customer
churn at Charis Bank Plc.

Major impact of customer churn to the bank :

Revenue Loss
Deposit reduction
Reduction in Profitability
Brand damage
MODEL SELECTION 6

Proposed Models in predicting churn are:

• Customer Segmentation
• Customer life value (CLV)
• Customer service management (CSM)
• Predictive Analytic Model
MODEL RECOMMENDED TO THE CLIENT7

Predictive Analytic Model

• The Model recommended for this project is Predictive

Analytic Model. Leveraging machine learning using Decision
Tree the bank will be able build a model to predict the
likelihood of a customer churning and identify the major
factors leading to churn.

• This model will provide the bank with insights to improve

customer retention, enhance their service offerings, and stay
competitive in the market.
 MODEL TESTING PLAN 8

The diagram provides a clear illustration of predictive modeling categorized into essential steps. (Kaur, I.
and Kaur, J., 2020, Karvana et al 2019)
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MODEL TESTING CRITERIA

DATA MODEL SCALABILITY INTERPRETABILITY MODEL

AVAILABILITY ROBUSTNESS PERFORMANCE:

Ensuring that the The model's results

The historical The model should be This criterion focuses on
decision tree model can should be easy to
customer data related robust and able to the accuracy of the
handle large volumes of understand and interpret.
handle variations in predictive model. Metrics
to behavior and data efficiently, as the This allows stakeholders
such as accuracy, precision,
interactions should data inputs and bank may have a to gain insights into the
and recall are used to
be readily available changes in customer substantial customer factors leading to churn
assess how well the model
behavior over time base.   and develop targeted
and of high quality. is making predictions
strategies. 

The above criteria collectively ensures the accuracy and reliability of the predictive model, ultimately defining its
effectiveness and success (Yang, Y., 2021, Baykara, B., 2015.)
Churn Analysis by Age Group

DATA

VISUALIZATION
Churn Analysis by Number of Products

DATA
VISUALIZATION
Churn Analysis by resolution of customer complains

DATA

VISUALIZATION
Churn Analysis by Technical Support

DATA

VISUALIZATION
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DATA

VISUALISATION

OF DECISION TREE
DECISION TREE EXPLANATION
The decision tree output serves as a roadmap, highlighting the
key factors influencing customer churn. It starts with the most
crucial factor, which is customer age, and branches into
segments based on other attributes like balance, product
usage, and membership status.

For instance, younger customers are more likely to churn, and

those with more products or inactive memberships are also
prone to leaving. In essence, the decision tree helps us
identify who is likely to leave and why, enabling us to make
informed decisions to enhance customer satisfaction and
engagement.
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The output of decision tree model holds insights into customer
churn behavior. Let's translate these insights into actionable COMMUNICATING
steps for Charis Bank.
INSIGHT,
1. Understanding Variable Importance: The most impactful
variables as shown on tree are age, the number of products,
INTERPRETATION
and membership status. These findings tell us that younger
customers, those with more products, and inactive members & APPLICATION
are more likely to churn emphasizing the need to focus on
retaining these customer segments in the bank. OF DECISION TREE

2. Age's Role in Churn: Age stands out as the most crucial FOR CHURN
factor being at the top of the tree. Younger customers
exhibit a higher likelihood of churning. With this insight PREDICTION
Charis Bank should explore strategies that appeal to
younger customers, ensuring their satisfaction and loyalty.
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COMMUNICATING
3. Products and Customer Satisfaction:
The number of products a customer uses affects churn. INSIGHT,
Those with more products might require extra attention to
enhance their experience and satisfaction. The Bank could INTERPRETATION
tailor offers or services to cater to the needs of such
customers. & APPLICATION

OF DECISION TREE

4. Active Membership Impact: FOR CHURN

Inactive members are prone to churn. This suggests that PREDICTION
customers engagement is key to customer retention. Charis
Bank can implement measures to encourage customer
interaction, fostering loyalty and reducing churn.

.
OUTCOMES OF THE DATA ANALYSIS CORRESPONDING TO THE HYPOTHESES 18
OUTLINED ON YOUR CLIENT BLOG PAGE 1.

Age and Churn: TRUE, supports the hypothesis that age has a significant impact on
churn behavior

Number of Products and Churn: TRUE, analysis reveals that customers with
more products tend to have a higher churn rate.

Active Customer and Churn: TRUE, analysis shows that active customers have a
lower churn rate.

Balance and Churn: FALSE, analysis reveals a weak association between balance and
churn, customer balance does not significantly influence churn. 
RECOMMENDATION AND NEXT STEPS
There are some recommendations for my clients based on the
project's findings, scope and business goals. They are tailored
to address specific challenges faced by the business, in the
context of addressing customer churn.
The recommendations provided are designed to have a
positive impact on the client’s business in ways such as :
 Cost reduction
 Increase profitability
 Improving customer experience
 Improve decision making using data analysis

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RECOMMENDATION AND NEXT STEPS
Improve Customer Engagement :
The recommendation is to enhance customer satisfaction by improving customer engagement
using a decision tree to identify potential churners and provide personalized services to
address their concerns, with data indicating that customer engagement improve loyalty and
align with the goal of strengthening customer relationships for higher retention rates and a
better bank reputation (Rahman and Kumar, 2020).

Proactive Risk Management:

The recommendation is to implement an early warning system based on the predictive
model to identify customers at risk of churning, allowing for timely interventions and risk
mitigation. This proactive approach aims to reduce the financial losses associated with
customer churn (Latif, 2023).

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RECOMMENDATION AND NEXT STEPS
Customer Segmentation :
The recommendation is to use the decision tree model to identify customer segments at risk of
churning and tailor marketing strategies to these groups. This approach aims to expand
market share and reduce churn rates, with data analysis supporting the effectiveness of
segment-specific strategies for improving customer retention (Wu et al, 2021).. The goal is for
Charis Bank to position itself as customer-centric, gaining a competitive advantage and
increasing market share.

Compliance and Ethical Considerations:

This recommendation is to ensure that data used for the predictive model Charis Bank
adheres to regulatory guidelines and ethical standards. This includes implementing a data
governance framework and collaborating with legal and compliance teams to ensure
transparent and ethical use of customer data in line with Charis Bank's regulatory goals.

09/07/2023 Annual Review 21

 CONCLUSION OF PROJECT
• In conclusion, our project on customer churn prediction for Charis Bank Plc represents a journey of
data exploration, analysis, and recommendations. we have gained valuable insights into the
dynamics of customer behaviors and its impact on churn rates.

• By analyzing historical data and employing techniques such as predictive modeling using decision
tree, Our analysis revealed attributes like customer age, number of product, active status play a role
in predicting churn.

• The insights derived from our analysis will empower the bank to implement proactive measures to
retain customers and improve customer satisfaction
 
• The project has shown the importance of combining technical expertise to reveal potential of data-
driven decision-making. By leveraging the power of data analytics, we have equipped them with
actionable recommendations to mitigate churn risks and optimize customer relationships. 
PERSONAL REFLECTION
Undertaking the consultancy project was both an enlightening and challenging
journey. The project was meticulously divided into four distinct phases, each
offering unique insights and opportunities for growth as discussed below: 

Phase 1: Project Initiation

At the project's outset, setting clear objectives with the client was
essential, but since there was no actual client, I lacked a deep
understanding of their specific challenges. To address this, I conducted
extensive industry research about banks in Nigeria to identify potential
pain points, which helped tailor my approach appropriately .
However, I recognize that involving a real client at the project onset could
have provided more accurate insights for the project.

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 PERSONAL REFLECTION
Phase 2: Data Collection and Analysis
During the online data collection process, new challenges arose, particularly
regarding data quality and relevance due to missing data and inconsistencies. I
managed this by dedicating substantial time for data cleaning. In the future,
investing more time in data profiling and exploring automated data validation
methods could further enhance data quality.

Phase 3: Research Model Methodologies

In the methodology phase, building predictive models, particularly using decision trees,
was rewarding, but the challenge was conveying complex statistical findings in a client-
friendly manner. To address this, I improved my communication and visualization skills
to present findings in an understandable way for easier client implementation. 

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PERSONAL REFLECTION

Recommendation and Presentation Phase:

In the final phase of the project, presenting our findings and

recommendations to the client was crucial. While they appreciated the
insights into churn drivers, challenges arose in harmonizing our strategies
with their existing processes. To overcome this, we provided detailed
explanations and clarifications, but for future projects, enhancing client
involvement in strategy development, particularly in understanding their
operational procedures, could lead to better alignment. 

09/07/2023 Annual Review 25

 KEY LESSONS LEARNT IN THE PROJECT
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• Importance of Data Preprocessing and Cleaning

1 • I learnt that cleaning, transforming, and handling missing values is crucial for accurate analysis and modeling.

• Ethics and Privacy

• I understood that using sensitive customer data emphasizes the need to adhere to ethical guidelines and data privacy
2 regulations. 

• Communication Skills
3 • I learnt how to explain technical concepts to non-technical stakeholders requiring clear communication and visualization .

• Project Management
• I understood the importance of project planning is vital for successful project execution which helps in adapting to
4 unforeseen challenges that may arise.

• Business Context Integration

• I learnt that having a deeper understanding of the client's business processes and challenges will lead to more practical and
5 effective recommendations to solving the client problem. 
CLIENT FEEDBACK
“The client expressed satisfaction with the project's outcome,
highlighting the empowerment of their team in addressing
customer churn proactively. They acknowledge the project's
role in understanding the complexities of customer behavior
dynamics.

Additionally, the client recognizes the need to shift towards a

personalized approach to customer engagement for improved
satisfaction and targeted interactions. They emphasize the
significance of data-driven decision-making and express
interest in utilizing machine learning expertise within their
team to further enhance the predictive model”.
 REFERENCE
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Baykara, B., (2015). ‘Impact of evaluation methods on decision tree accuracy’. Master's thesis. pp 12-46. [Online] Available
at: https://trepo.tuni.fi/bitstream/handle/10024/97207/GRADU-1432814149.pdf?sequence=1&isAllowed=y [Accessed: 23
August 2023]. 

Rahman, M. and Kumar, V., (2020) ‘Machine learning based customer churn prediction in banking’. International
conference on electronics, communication and aerospace technology. Vol 4, pp. 1196-1201.

Karvana, K.G.M., Yazid, S., Syalim, A. and Mursanto, P., {2019} ‘Customer churn analysis and prediction using data mining
models in banking industry’. International workshop on big data and information security (IWBIS) (pp. 33-38). [Online]
Available at  https://ieeexplore.ieee.org/stamp/stamp.jsp?tp=&arnumber=8935884 [Accessed: 21 August 2023]. 

Kaur, I. and Kaur, J., (2020) ‘Customer churn analysis and prediction in banking industry using machine learning’. In 2020
Sixth International Conference on Parallel, Distributed and Grid Computing (PDGC) .pp. 434-437. [Online] Available at: 
https://ieeexplore.ieee.org/stamp/stamp.jsp?tp=&arnumber=9315761 [Accessed: 25 August 2023].  

Latif, H., (2023) ‘Advancing Data Integrity in Banking: AI/ML Solutions and Best Practices’. International Journal of
Computer Science and Technology. 7(1), pp.185-203.
 REFERENCE
29

Murindanyi, S., Mugalu, B.W., Nakatumba-Nabende, J. and Marvin, G., (2023.) ‘Interpretable Machine Learning for Predicting Customer
Churn in Retail Banking’. International Conference on Trends in Electronics and Informatics. Vol 7 pp. 967-974. [Online] Available at:https
://ieeexplore.ieee.org/stamp/stamp.jsp?tp=&arnumber=10125859 [Accessed: 23 August 2023]. 

Yang, Y., (2021) ‘The evaluation of online education course performance using decision tree mining algorithm’. Complexity pp.1-13.
[Online] Available at: https://www.hindawi.com/journals/complexity/2021/5519647/ [Accessed: 23 August 2023] 

Wu, S., Yau, W.C., Ong, T.S. and Chong, S.C., (2021) ‘Integrated churn prediction and customer segmentation framework for telco
business’. International conference on electronics, communication and aerospace technology.  Vol 9, pp.62118-62136.
ThankYou

TREY 30
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