07 - Data Mining Applications


The popularity and acceptance of data mining has increased tremendously in the last few years.  A number of industries make the best use of data mining to make better critical business decisions and hence stand out from the crowd. Mainly businesses with strong customer focus are implementing data mining techniques to introduce different strategies that improves customer satisfaction. Some of the businesses that apply data mining techniques include retail, telecommunication, sales and marketing, healthcare, insurance, finance, manufacturing and so on. Data mining is also applied in a number of business areas including customer relationship management, business analysis and management, risk analysis and management, bioinformatics, computer security and so on.

Retail Industry

Different data mining techniques are widely applied in the retail industry to reduce cost and improve business. As retail industry includes a number of areas such as shopping, sales, transportation, customer relationship etc, the quantity of data getting collected and stored is too large. The growth of online shopping is also another reason for the tremendous increase in quantity of data. Retail industry uses data mining for identifying customer purchase patterns and trends, checking the effectiveness of promotions and advertisements, optimizing product pricing, customer segmentation, finding customer lifetime value, forecasting demand and so on. Strategies implemented based on these kinds of information will in turn improve the customer service and hence achieve better customer retention and satisfaction.

Telecommunication Industry

Telecommunication industry is one of the rapidly growing and highly competitive businesses today. Telecommunication industry offers a number of services including cell phone, fax, internet messenger, web data transmission and so on. Telecommunication industry uses data mining to identify call patterns, catch fraudulent activities, know and retain customers, identify products and services that yield higher profit, and so on. Lots of fraudulent activities are happening around misusing the potential of Internet and cell phone services. Data mining is really helpful in identifying such fraudulent activities.

Healthcare and Insurance

Insurance industries always require information about customers, competitors and market to survive. The major application of data mining in these industries is fraud detection. Studies show that fraudulent behavior can be detected and prevented to a greater extent with the help of data mining. This is possible by analyzing behavior patterns of risky customers. Data mining is also useful in claims analysis to find out the medical procedures that are claimed together, forecast customers who will potentially purchase new policies and so on.

Financial Organizations

Nowadays a number of banks and financial institutions offer a wide variety of banking services including investment, loans, credit cards etc. The data collected by these organizations are usually reliable, complete and of high quality. Hence, data mining can provide reliable information. Data mining can be effectively used to predict loan payment, identify fraudulent activities, analyze customer credit policy, classify and cluster customers for target marketing and so on.


The applications of data mining do not end here. The list goes on and on. Data mining techniques can be applied in biological data analysis, fluid dynamics, chemical engineering, ecosystem modeling, intrusion detection and so on. Researches and studies are still going on to identify different areas that can make the best use of data mining.

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