ANALYSIS OF THE EFFECTIVENESS OF POLYNOMIAL FIT SMOTE MESH ON IMBALANCE DATASET FOR BANK CUSTOMER CHURN PREDICTION WITH XGBOOST AND BAYESIAN OPTIMIZATION

Jhiro Faran; Agung Triayudi

doi:10.52436/1.jutif.2024.5.3.1284

Jhiro Faran Post Graduate Information Technology Department, Universitas Nasional, Indonesia
Agung Triayudi Post Graduate Information Technology Department, Universitas Nasional, Indonesia

DOI: https://doi.org/10.52436/1.jutif.2024.5.3.1284

Keywords: Bayesian Optimization, Churn, Imbalance data, SMOTE, XGBoost

Abstract

The case of churn in the banking industry, namely customers who leave or no longer use bank services, is a serious problem that requires an appropriate solution. The aim of this research is to predict churn and take appropriate preventive actions using machine learning. The dataset contains 10,000 bank customer data with 14 relevant features. Only about 20% of customers experience churn, creating a data imbalance problem in classification. To overcome data imbalances, the SMOTE oversampling technique was applied. Also introduced was the development of the SMOTE technique, namely, Polynomial Fit SMOTE Mesh (PFSM). PFSM works by combining each point in the data with a linear function and producing synthetic data at each connected distance. Experimental results show that the model developed using PFSM and optimized with Bayesian Optimization for the XGBoost algorithm achieved 86.1% accuracy, 70.87% precision, 53.81% recall, and 61.17% F-score. This indicates that the approach is successful in improving predictive capabilities and identifying potential customers for churn earlier. This research has significant relevance in the banking industry, helping banks to safeguard their customers and improve banking business performance..

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