УДК: 519.87/005.74
https://doi.org/10.25198/2077-7175-2023-3-72
APPLICATION OF CLUSTER ANALYSIS OF BANK CUSTOMERS
N. Hüseynov
Azerbaijan State University of Economics, Baku, Azerbaijan
e-mail: Natig_huseynov@unec.edu.az
Abstract. Since companies can have thousands and more customers, effective management of this customer base is one of the most important conditions for business success. In order to know the customers, it is possible to categorize them by dividing them into small groups according to their different similarities, and then specify the type of services to be offered to them. Customer segmentation has the potential to make a difference in different businesses. The fact that the variety of products and services offered in the banking sector is increasing day by day and the transition to the digital environment is faster in this sector shows that the correct segmentation of the customers of the banks will save them more profit and time in this competitive market.
In this study the main intention is to divide customers into small manageable groups using clustering algorithms and to find the relative importance of these groups using multi-criteria decision-making technique. In this regard, the customer segmentation approach was implemented in one of the banks operating in Azerbaijan. Currently, the bank is one of the financial institutions with the largest service network in Azerbaijan. The bank in question provides services to more than 5 million individuals and more than 22 thousand legal entities. In addition to these, it closely participates in a number of social software applications developed by the state and applies a several of the programs for the improvement of the real sector.
Key words: customer segmentation, K-means, cluster analysis.
Cite as: Hüseynov, N. (2023) [Application of cluster analysis of bank customers]. Intellekt. Innovacii. Investicii [Intellect. Innovations. Investments]. Vol. 3, pp. 72–82, https://doi.org/10.25198/2077-7175-2023-3-72.
