Financial Statistics/Marketing Seminar

Sponsored by SORA - the Southern Ontario Chapter of the American Statistical Association and the Southern Ontario Regional Association of the Statistical Society of Canada. This seminar is co-sponsored by the Bank of Nova Scotia and is the fifth in a series.

Everyone is welcome to attend. There is no fee for these seminars, but space is limited so pre-registration is essential.

Speakers:

Chris Ralph
Senior Manager Market Segmentation, Bank of Montreal
Rogan Vleming,
Senior Research Analyst Market Segmentation, Bank of Montreal

Date:

Wednesday June 28, 2000

Time:

2:00 - 4:30 p.m.

Location:

The Bank of Nova Scotia,
National Trust Board Room
"1 Financial Place"
1 Adelaide Street East, 3rd Floor, Toronto

This is 1 block north of King at the south-east corner of Yonge and Adelaide (King subway station).

Topic

Evolving Segmentation Solutions with Genetic Algorithms

The development of a robust client segmentation solution is a key prerequisite to the design of strategic new value propositions in financial services. However, the computationally intensive nature of the underlying clustering techniques currently being employed to build these systems requires that the analyst make tradeoffs between development time and the effectiveness (robustness and relevance) of the final solution. The analyst must often rely heavily on the "business experience" of the system end-users to help sort through the massive number of potential system inputs, such as the number of clusters, number of driver variables and model inputs. Experience has shown that different analysts will come up with very different solutions, often to the frustration of the end users.

We have addressed these issues by developing an objective function which measures both the relevance of the final solution and the "distinctness" of the clusters themselves. This objective function is then used by a genetic algorithm (GA) to evaluate, rank, and evolve progressively better solutions using the simple operators of selection, crossover, and mutation. The GA enables us to do a constrained (# of cluster, # of inputs) yet highly parallel search through all possible combinations of cluster driver variables, and leads to closer-to-optimal solution in much less time than previously possible. Our talk will focus on the development of the objective function, and the challenges we faced encoding the problem.

Program

About the Speakers

Chris Ralph, Senior Manager Market Segmentation, Bank of Montreal.
B.Eng, Industrial Engineering (Ryerson), MBA, Information Systems (McMaster)

Rogan Vleming, Senior Research Analyst Market Segmentation, Bank of Montreal.
B.Eng, Mechanical Engineering (McMaster), MBA Finance (McMaster)

Please RSVP

Due to limited space, we require all attendees to preregister with Tamara Arenovich, Vice-Chair, SORA Committee for Financial Statistics & Marketing:

Tamara Arenovich
Statistical Consultant
Centre for Academic Technology
University of Toronto
Phone: (416) 978-5128
Fax: (416) 978-7705
E-mail: tamara.arenovich@utoronto.ca

For those who register colleagues and guests for this seminar, please make sure that you include the name, phone number, company name/institution name, e-mail address and fax number of those people so that we will have a proper record in our system.

For more information about this seminar and other SORA events and activities, please contact either Tamara or Ivan Hon, Chair, SORA Committee for Financial Statistics & Marketing:

Ivan Hon
Senior Technical Manager
Retail Marketing
The Bank of Nova Scotia
602-100 Yonge Street,
Toronto, Ontario M5H 1H1
Phone: (416) 933-1493
E-mail: ivan.hon@scotiabank.com