- Conference Article
4
- 10.1109/icpects62210.2024.10780120
Machine Learning for Predictive Telemarketing: Boosting Campaign Effectiveness in Banking
- Oct 08, 2024
- Srinivasa Rao Bogireddy + 1 more +1
Telemarketing, while often perceived as intrusive, remains a potent tool for banks to acquire new customers, cross-sell products, and deepen customer relationships. However, the old-style, unsystematic telemarketing continues to record low response rates and is damaging to a brand image. This is where machine learning comes into play in the picture. The collected customer data blended with the tools of the predictive analysis provide the opportunity to drastically enhance the telemarketing campaign results, focusing on the right customer at the right time with the right products. In this research, the following classification models are employed with the intention of evaluating their predictive accuracy in the context of customer response to telemarketing: XGBoost (XGB), Gradient Boosting (GB), Logistic Regression (LR), Decision Tree (DT), and K-Nearest Neighbors (KNN). By assessment of classification reports, confusion matrices, and ROC curves, it was concluded that the XGBoost model has the highest accuracy, precision, recall, and F1-score. Gradient boosting also identified good results, but logistic regression gave a more balanced approach though less accurate. As it will be recalled, the decision tree, while considered adequate, was observed to overtrain while K-Nearest Neighbors faced severe problems with misclassification where the minority class was involved. These results also indicate the importance of model selection in addressing the challenges associated with telemarketing data and for making the best strategies for allocating resources for the best performing model, which is XGBoost, when it comes to improving predictive precision and customer targeting in telemarketing.
Read more