A Multiclass Ensemble Learning Approach for Predicting Customer Churn in Commercial Banks
Keywords:
Customer Churn, Fusion Model, Big Data, Machine LearningAbstract
In the era of burgeoning big data and the expansive reach of the Internet, commercial banks are confronted with the challenge of managing an extensive customer base while striving to meet their evolving needs. A nuanced and reliable understanding of consumer preferences is imperative for banks to ensure customer retention and to preemptively address potential churn. This research introduces a sophisticated approach to predict customer churn through the lens of multiclass categorization, leveraging the prowess of ensemble machine learning algorithms. By integrating the strengths of XGBoost, LightBoost, and CatBoost with a bagging ensemble method, our model offers a refined prediction of customer churn, distinguishing between various levels of churn risk. This multiclass ensemble learning framework not only enhances the predictive accuracy but also provides a more granular insight into customer behavior patterns. The efficacy of our model is assessed using the kappa statistic, a robust measure for evaluating the consistency of predictions across multiple categories. Our experimental results reveal that the kappa value of our multiclass ensemble model significantly surpasses that of single-algorithm approaches, indicating a superior predictive performance and reliability. The insights gleaned from our model can inform targeted marketing strategies and customer retention efforts, thereby mitigating the risk of customer churn. Through the application of this multiclass ensemble learning model, banks can achieve a more strategic and informed approach to maintaining customer loyalty and optimizing their service offerings.