SYNOPSIS
Title
Predicting Offer Relevance in Financial Services Using Machine Learning: A Decision
Science Approach
Contents
1. Abstract
2. Introduction
3. Objectives and Scope
4. Research Methodology
5. Chapter Plan
6. Expected Findings / Conclusions
7. Sources / References
1. Abstract
Financial institutions today rely heavily on targeted marketing to improve customer engagement
and increase the adoption of card-based and digital financial products. However, most offer
campaigns still struggle with low click-through and redemption rates due to the absence of
personalized targeting mechanisms. This will help build up opportunities for making decisions
that are data backed with the help of data science, which will help in boosting offer relevance by
predicting what are the customer segments who are best-suited for a particular kind of offer
This particular study is aimed at trying to formulate ML-based models that are predictive to
estimate the chances of the customer engaging with a particular kind of offer. The research will
analyse transactional behaviour, demographic variables (if available), and offer-level attributes
to identify patterns associated with offer relevance. The methodology will encompass steps like
data pre-processing, engineering features, fixing data imbalance and lastly building predictive
models such as Logistic Regression, Random Forest, XGBoost, and CatBoost. Additional AI
techniques (e.g., SHAP) will be used to help us interpret outputs of the model and provide
insights useful in the business context which might help us to improve marketing efficiency,
reduce campaign wastage, and increase ROI for financial service providers. The findings will
further support the development of a decision-science-based targeting framework that
institutions can adopt to improve customer engagement and personalization.
2. Introduction
Offer targeting in financial services is a major component of customer engagement and
retention strategies. However, most traditional targeting methods rely on broad segmentation,
rule-based logic, or historical averages. These approaches often fail to capture individual
customer behaviour, resulting in irrelevant offers and low engagement rates.
The rapid growth of machine learning provides institutions with the ability to analyse large-scale
transactional and behavioural data, enabling them to predict and offer relevance at an individual
level.
The choice of this topic was made because:
● It reflects a real life challenge which is contemporary and faced by financial institutions.
● Machine learning–driven decision science is now central to modern marketing strategies.
● I have prior exposure to similar datasets, making it feasible to execute rigorous analysis.
3. Objectives and Scope
Objectives
1. To identify behavioural, transactional, and offer-related factors that drive offer relevance
in financial services.
2. To build predictive models that calculate (approximately) the probability of a customer
engaging with a financial offer.
3. To compare and view the performance of different ML algorithms for predicting the
relevance of an offer.
4. To use explainable AI techniques to interpret model predictions and derive managerial
insights.
5. To develop a decision-science–based framework for improving targeted marketing
effectiveness.
Scope
● The study will use publicly available or synthetically generated datasets resembling
real-world financial transactional and marketing data.
● The focus will be on customer-offer interactions, predictive modelling, interpretability, and
business strategy implications.
● The scope excludes simulated and synthetic customer data.
4. Research Methodology
Phase 1: Desk Research
● Review literature on machine learning in fields like marketing, customer response
prediction, financial services personalization, and decision science frameworks.
● Identify research gaps and establish foundational knowledge.
Phase 2: Data Collection & Preparation
● Use open-source datasets (e.g- Kaggle) or simulate synthetic datasets that is similar to
financial offer-response data.
● Perform steps like data cleaning, transformation, feature engineering (e.g., RFM
variables, behavioural metrics), and exploratory analysis (EDA).
● Address class imbalance using techniques like SMOTE, class weights, or other
techniques.
Phase 3: Model Development
● Build predictive models including different algorithms like Logistic Regression, Random
Forest, XGBoost, CatBoost, and LightGBM.
● Perform further hyperparameter tuning and cross-validation.
● Evaluate using AUC, precision-recall, F1-score, and accuracy.
Phase 4: Explainability & Decision Framework
● Use SHAP or LIME to interpret the predictions and extract key behavioural drivers from
it.
● Propose a targeting strategy based on predicted probabilities and thresholds.
Phase 5: Conclusion & Recommendations
● Summarize findings, implications for business, limitations, and directions for future
research.
5. Chapter Outline
Chapter 1: Introduction
○ Context and Problem Statement
Chapter 2: Literature Review
○ Previous studies on machine learning in financial services marketing, decision
making, prediction of clicks
Chapter 3: Research Methodology
○ Sources of data, steps in data processing, chosen models, methods of evaluation
Chapter 4: Data Analysis & Model Development
○ Exploratory data analysis, engineering of data attributes, construction of the
model, outcomes
Chapter 5: Model Interpretation & Managerial Insights
○ SHAP and LIME analyses, implications for managerial decisions
Chapter 6: Findings, Conclusion & Recommendations
○ Summary, constraints, recommendations for future research
Bibliography & Annexures
○ Sources, snippets of code (where permitted), graphs, and tables
6. Anticipated Findings / Conclusions /
Recommendations
● Determination of the most significant predictors of the applicability of offers.
● A high degree of reliability in a machine learning model to predict the likelihood of a click.
● A model to personalize offers encouragement which enhances the return on investment
in marketing.
● Understanding of customers' financial services product behaviors.
● Operational recommendations for financial organizations to facilitate predictive targeting.
7. Sources / References
(For example, possible references)
● Academic papers, Industry reports, Kaggle datasets, Research articles
(All references will be fully cited in APA style in the final report.)