An Analysis of Mobile Banking User Behavior Using Customer Segmentation

This study proposed an integrated data mining and customer behavior scoring model to manage existing mobile banking users in an Iranian bank. This segmentation model was developed to identify groups of customers based on transaction history, recency, frequency, monetary background. It classified mobile banking users into six groups. This study demonstrated that identifying customers by a behavioral scoring facilitates marketing strategy assignment. Then the bank can develop its marketing actions. Thus, the bank can attract more customers, maintain its customers, and keep high customers' satisfaction. Keywords—Data mining; mobile data, mobile banking; customer segmentation Introduction Online banking is increasingly common. Financial institutions deliver online services via various electronic channels, subsequently diminishing the importance of conventional branch networks. The newly emerging channels of online banking and rapidly increasing penetration rates of mobile phones motivate this study (C. S. Chen, 2013). The internet has had a significant impact on financial institutions, allowing consumers to access many bank facilities 24 hours a day, while allowing banks to significantly cut their costs. Research has shown that online banking is the cheapest delivery channel for many banking services (KoenigLewis, Palmer, & Moll, 2010; Robinson, 2000). A number of studies have identified advantages to bank customers, including cost and time savings as well as spatial independence benefits (Koenig-Lewis et al., 2010). According to Gartner’s prediction of leading trends of 2012 in mobile applications, mobile commerce (m-commerce) remains the most important one. Gartner further forecasts that mobile devices will replace PCs as the main device to access the internet. As for the third quarter of 2012, IPSOS indicated that “The era of Multi-Screen has come, and smartphones account for the purchasing behavior of 65% of mobile device users.” According to that report, 66 percent of the smartphone holders in Taiwan access the internet via a smartphone at least once daily; approximately 57 percent of the customers perform mobile searches; and 40 percent of the customers shop via mobile phones (IPSOS, 2012). These statistics reflect vigorous growth in the scale of m-commerce. However, mobile banking remains in its infancy, and international adoption rates demonstrate the strong potential of m-commerce (FRB, 2012). Therefore, data mining for mobile banking is of priority concern for further developing mobile banking services (MBSs) (C.