Bank Term Deposit Subscription Prediction
Economic Question & Motivation
Can client demographic, financial, and campaign-related characteristics predict whether a client subscribes to a bank term deposit?
Why is this important?
- Helps banks target customers more effectively
- Improves marketing efficiency
- Supports data-driven decision making
Dataset Description
Dataset: Bank Marketing Dataset
Source:
- Portuguese Retail Bank
- UCI Repository / Kaggle Mirror
- 2008–2010
Observations: 11,162 clients
Outcome Variable: Deposit (Yes / No)
Key Predictors: Balance, Housing Loan, Personal Loan, Duration, Previous Campaign Outcome
Probability & Distribution Analysis
- 52.6% No
- 47.4% Yes
- Balanced dataset
Modeling Strategy
We built two logistic regression models.
Model 1
- Balance
- Housing Loan
- Personal Loan
Model 2
- Balance
- Housing Loan
- Personal Loan
- Duration
- Previous Campaign Outcome
Goal: Determine whether campaign-related variables improve predictive performance.
Model Comparison
| Model | Accuracy | Precision | Recall |
|---|---|---|---|
| Model 1 | 0.603 | 0.627 | 0.626 |
| Model 2 | 0.789 | 0.770 | 0.861 |
Key Finding: Model 2 outperformed Model 1 across all evaluation metrics.
Cross Validation
| Metric | Test Set | Cross Validation |
|---|---|---|
| Accuracy | 0.789 | 0.786 |
| Precision | 0.770 | 0.769 |
| Recall | 0.861 | 0.846 |
Key Finding: Cross-validation results are very similar to test-set results.
Interpretation: Model 2 generalizes well and shows no strong evidence of overfitting.
Economic Interpretation
Positive effects:
- Higher balance
- Longer call duration
- Previous campaign success
Negative effects:
- Housing loan
- Personal loan
Implication: These variables can help banks target customers more effectively.
Limitations & Future Work
Limitations
- Missing income and wealth variables
- Single banking dataset
Future Work
- Random Forest
- Gradient Boosting
- Customer loyalty analysis
Conclusion
- Best Model: Model 2
- Accuracy: 78.9%
- Recall: 86.1%
- Stable across cross-validation
- Better customer targeting