GEORGE BROWN COLLEGE

SCHOOL OF BUSINESS

Association Analysis of Bank Data

Elham Safari

Contents
Deliverable 1: EM Activity Report..............................................................................................................2
Deliverable 2: Case Questions.....................................................................................................................7
Deliverable 3: Management Report...........................................................................................................12

Deliverable 1: EM Activity Report

The result- Nod: Association Diagram Window
This window shows the result of associations based on two categories that are confidence and support.
From this diagram we can find out the top 3 rules with the highest confidence and support.

Rule Matrix that indicates the two sides of the rules

Statistics Line Plot shows the highest confidence rate and support rate that are as follows:
CKING
SVG

CKING

SVG
Support (%) = 54.17
Support (%) = 54.17

CKING
ATM

ATM
Support (%) = 36.19
CKING Support (%) = 36.19

SVG
ATM

ATM
SVG

HMEQLC

CKING

Confidence (%) = 100.00

MTG

CKING

Confidence (%) = 97.81

CCRD

CKING

Confidence (%) = 95.96

Support (%) = 25.69

Support (%) = 25.69

In the second stage, sequence analysis was conducted and based on the output results the top three rules
discovered .

Summary of Association Tool - Statistics Plot that shows the highest confidence and support as follows:
Confidence
CKING ==> CKCRD ==> CKCRD
CKCRD ==> CKCRD
CKING ==> SVG
Support
CKING
CKING
SVG

ATM

Confidence (%) = 100.00

Confidence (%) = 100.00
Confidence (%) = 63.15

SVG
Support (%) = 63.15
ATM
Support (%) = 42.19
Support (%) = 41.53

Statistics Line Plot- Sequence Analysis

Deliverable 2: Case Questions

Written Responses to Case Questions
7. After completing the initial association analysis (ignoring sequence), answer the following:
a. What are the top 3 rules with the highest support? Explain what these rules imply in business
terms. What potential recommendations would you make, based on the top 3 rules with the
greatest support.
Based on the statistics plot, the top three rules with the highest support are as follows:
CKING
SVG

CKING

SVG
Support (%) = 54.17
Support (%) = 54.17

CKING
ATM

ATM
Support (%) = 36.19
CKING Support (%) = 36.19

SVG
ATM

ATM
SVG

Support (%) = 25.69

Support (%) = 25.69

These rules indicates that the probability that a customer has both checking and saving account with the
bank is 54.17% which means that almost half of the customers have both services (checking and saving
accounts) with the bank. According to the plot, 36.19% of customers have both checking and automated
teller machine debit card and 25.69% of them have both checking and automated teller machine debit card
and saving account.
A recommendation to be appropriate for this scenario is to advise the sales representative to promote
another service when customer comes to sign up for a specific service based on the above percentage or
they can start with a specific product that a customer needs and then later identifying additional needs
based on the above percentage. For example considering the highest percentage of CKING
SVG sales representative can cross-sell these two products or the banking system can design a
specific promotion for the customers who sign up for both products as a package.

b. What are the top 3 rules with the highest confidence? Explain what these rules imply in
business terms. What potential recommendations would you make based on the top 3 rules
with the greatest confidence. Are any of the confidence rules 100%? If so, is the confidence
likely due to customer choice, or is it a consequence of the product design? What would the
top 3 rules be if it was purely based on customer choice?
Based on the statistics plot, the top three rules with the highest confidence are as follows:
HMEQLC

CKING

Confidence (%) = 100.00

MTG

CKING

Confidence (%) = 97.81

CCRD

CKING

Confidence (%) = 95.96

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Considering the highest confidence from the statistics plot, we can conclude that all customers who have
checking account also have home equity line of credit with bank and a huge number of customers who
have checking accounts applied for mortgage or credit card. Therefore, checking account and home equity
line of credit or checking account and mortgage or checking account and credit card are cross-sold to
banks customers.
Based on the above numbers, my recommendation would be that the bank designs a marketing plan for
those potential clients who have already checking accounts to recommend them add-on services
including mortgage, credit card, and home equity line of credit. Direct marketing through mail, email, and
fliers is the best way to upsell the above-mentioned services. Another effective method of marketing is
inbound marketing. Customers who call bank for various reasons can present a great opportunity to sell
additional services. Considering the high percentage of confidence for these products bank can be sure that
its profit margin will not suffer if they invest extra budget on advertising for this purpose only.
Yes, we have 100% confidence rule for HMEQLC
CKING, which means all customers who have
checking account also have home equity line of credit with bank. The reason is the both customer choices
and product design. Because we do not have sufficient information regarding the bank marketing mix and
product design, it is hard to say that the reason is due to product design only and customer choices does not
have any impact on 100% confidence. In my opinion the current confidence rules is more based on product
design by bank since bank is trying to upsell the services. If it was purely based on customer choices, the
top three rules might be changed as follows:
CKCRD

CKING

SVG

CKING

TRUST

CKING

c. What are the top 3 rules with the highest lift? Explain what these rules imply in business
terms. What potential recommendations would you make based on the top 3 rules with the
greatest lift.
Top three rules with the highest lift are:
CKING & CCRD
CKCRD
CKCRD
CCRD

CKCRD
CKING & CCRD

(3.33)
(3.33)

CCRD (3.19)
CKCRD (3.19)

CKING & CKCRD

CCRD
CCRD
CKING & CKCRD

(3.19)
(3.19)

Based on the rules with the highest lift, we can conclude that the associations are highest for checking
account and credit card with checking/debit card and the second and third higher associations are
check/debit card with credit card and checking account and check/debit card with credit card. These
services are most common products that are cross-sold. A recommendation to be appropriate for this
scenario is to put more emphasis on selling the above services because of its strength of the association.

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d. In your opinion, what are the 3 most significant rules that you have discovered in this analysis.
Provide some additional product development or product marketing strategy
recommendations that could take advantage of these association rules.
The three most significant rules that I have discovered are:
HMEQLC

CKING

Confidence (%) = 100.00

MTG

CKING

Confidence (%) = 97.81

CKING

SVG

Support (%) = 54.17

These rules are useful to discover the product design of a business while analyzing their data or we can
discover a pattern in historical data based on customers choices and project it into the future.
I recommend designing new marketing strategy for the services that are more likely to be adopted as
complementary product based on the highest confidence level and support. Marketing department of the
bank needs to conduct an extensive study on secondary data of the bank in order to complete the list of
eligible clients who already have services with the bank and communicate with them through mail, email,
and fliers (direct marketing ) or offering the new packages during customer service interactions (inbound
marketing). These services could be offered as banking bundle.
8. Make the necessary modifications and add a second association node that takes purchase sequence
into account (pages 6-78 to 6-80) answer the following questions.
a. What additional information is being provided to the output as a result of considering sequence?
If we look at the sequence report, we find out some different numbers for lift. In the previous report the
highest lift was 3.33 an the second higher number was 3.19 while in sequence report we can see the higher
number for lift such as 8.85 for CKING ==> CKCRD ==> CKCRD and CKCRD ==> CKCRD which
means we have the higher strength of associations with sequence analysis. The other difference between
two outputs is that the number of rules in the first report is 169 but in sequence report the number of rules
decreased to 141.

b. What are the top 3 rules for each category (confidence, support and lift)?
Confidence
CKING ==> CKCRD ==> CKCRD
CKCRD ==> CKCRD
CKING ==> SVG

Confidence (%) = 100.00

Confidence (%) = 100.00
Confidence (%) = 63.15

Support
CKING
SVG
Support (%) = 63.15
CKING
ATM
Support (%) = 42.19
SVG
ATM
Support (%) = 41.53
Lift
CKING ==> CKCRD ==> CKCRD (8.85)
CKCRD ==> CKCRD
(8.85)

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HMEQLC ==> HMEQLC
(3.25)
CKING ==> HMEQLC ==> HMEQLC
(3.25)

c. What impact (if any) did considering purchase sequence have on the resulting rules? What
impact (if any) does sequencing have to the previous recommendations?
If we compare the percentages in two outputs for support category, we notice the higher percentage of
support for the same rules. Regarding the lift category, the number is higher and the rules are more in
sequence analysis output.
The sequence analysis report can make us more confident about our decision we made to promote the
service as a bundle or offering new package due to the higher percentage in second report. The bank can
also add some more services to its product design.

d. In your opinion, what are the 3 most significant rules that you have discovered in this analysis.
What additional marketing strategy recommendations would you add to your analysis that
could take advantage of these association rules?
CKING ==> SVG

Confidence (%) = 63.15

Support (%) = 63.15

CKING ==> CKCRD ==> CKCRD

Confidence (%) = 100.00

Lift (8.85)

CKCRD ==> CKCRD

Confidence (%) = 100.00

Lift (8.85)

With higher level of confidence and support obtained from the sequence analysis, I recommend to expand
the market segment for the complementary products by extensive market research and competition
analysis. The bank needs to start its market expansion effort by determining the demographic location of
new target market.
9. Now that you have gained insight into both the demographic data via clustering the census data
and you have a better idea of the nature of how bank customers transactions are associated with
the banks
products and services, how would this additional insight influence how you would differentiate
branch
design, product branding, positioning, and promotion? How about product offer management?
Each branch can focus on promoting its service based on the income level at which a household would be
capable of entering the market. In order to improve up-sell opportunity, it is better to put more effort into
selecting the location with higher income household. For example, the product such as home equity line of
credit, automobile insurance loan and mortgage is better to promote or offer as a bundle in the location
with higher income household. If the bank wants to promote its individual retirement account for current or
future customer it is better to offer this product as a package in the location with older population who are
retired or the household in the verge of retirement. As the result of this situation, each rule is better to

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apply in some specific branches based on the demographic characteristics of the population. Considering
the popularity of services among the population of different location, each branch of bank can conduct
more marketing efforts on the specific service based on the characteristic of households.
10. Based on the other various methods of data analysis available to you have learned in this course
and your
program (i.e. logistic regression, ANOVA, etc.) what additional customer or transaction level
analysis would you recommend to management to further inform their strategies?
A simple random sampling can be conducted in order to study the customer purchase behaviour in different
location in order to find the best place to offer the product design based on discovered rules. An ANOVA
table can be used to provide an overall summary for each group of sample. We can state our hypothesis and
test it through analysis of variances presented in ANOVA table.

Deliverable 3: Management Report

Executive Summary
A bank decides to improve its cross-sell and up-sell opportunities in order to expand its market
share. The objective of this study is to examine the association between different retail banking
services offered to customers and to figure out the customer purchase behaviour as well as its
consequence. The bank is currently offering many different kinds of financial services to nearly
8,000 customers.
Based on the association analysis, different service combinations will be suggested to increase
revenue based on the discovered rules. These rules explain the probability of purchasing more
than one services by a potential customer. The analysis will be performed on thirteen different
products and in order to find out the associations between these products. This can be helpful to
suggest different marketing strategies for new and existing customers.

Problem definition
The challenge is to provide product development and to design marketing strategy that can take
advantages of the association rules. We need to consider relevant designing combination of

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services that fulfill actual need of clients based on the characteristics of the household in each
branch location. As the result of this situation, each rule is better to apply in some specific
branches based on the demographic characteristics of the population.
In order to increase company revenue we need to look at the historical data of customers purchase
behaviours. The bank needs to use predictive modeling that is based on past purchase behaviours
of its customers.
Analysis and Results
The initial association analysis of the data revealed various rules. After discovering the
associations between different services, we measured the strength of each association. The
probability of purchase was measured across three categories: support, confidence, and lift. The
support category shows the probability that a customer purchased two different services. The
confidence category is used to measure the probability that a customer added another service to
his/her package given that he/she had purchased one of the services before. Finally, the lift is used
to measure the strength of the associations. The top three rules for each category were discovered.
According to the top three rules based on the highest support rate, the probability that a customer
has both checking and saving account with the bank is 54.17% which means that almost half of
the customers have both services. According to the plot, 36.19% of customers have both checking
and automated teller machine debit card and 25.69% of them have both checking and automated
teller machine debit card and saving account.
Looking at the highest confidence rate, we discovered that all customers who have checking
account also have home equity line of credit with bank and a huge number of customers who have
checking accounts applied for mortgage or credit card. Therefore, checking account and home
equity line of credit or checking account and mortgage or checking account and credit card are
cross-sold to banks customers.
Based on the rules with the highest lift, we can conclude that the associations are highest for
checking account and credit card with checking/debit card and the second and third higher
associations are check/debit card with credit card and checking account and check/debit card with
credit card. These services are most common products that are cross-sold.

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In the secondary associations analysis we considered the purchase sequence and we found out
almost the same result with higher percentage for both confidence and support categories.
Conclusions and Recommendations
Based on the analysis of association with and without consequences, new marketing strategy
design is recommended for the services that are more likely to be adopted as complementary
product based on the highest confidence level and support. The new product design can be be
offered as banking bundle and promoted through direct marketing (mail, email, and fliers) or
introducing the new packages during customer service interactions (inbound marketing).
Appendix
Summary of Association Tool - Statistics Plot

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Statistics Line Plot- Sequence Analysis