Product Recommendation System With Machine Learning Algorithms for SME Banking

Abstract

In the present era, where competition pervades across all domains, profitability holds crucial economic importance for numerous companies, including the banking industry. Offering the right products to customers is a fundamental problem that directly affects banks’ net revenue. Machine learning (ML) approaches can address this issue using customer behavior analysis from historical customer data. This study addresses the issue by processing customer transactions using a bank’s current account debt (CAD) product with state-of-the-art ML approaches. In the first step, exploratory data analysis (EDA) is performed to examine the data and detect patterns and anomalies. Then, different regression methods (tree-based methods) are tested to analyze the model’s performance. The obtained results show that the light gradient boosting machine (LGBM) algorithm outperforms other methods with an 84% accuracy rate in the light gradient boosting algorithm, which is the most accurate of the three methods used.