Final Presentation from graduate capstone.

1. Synchrony Financial
Response to the
Financial Crisis

2. Synchrony Financial
 110 million open accounts
 Eight decades providing customers with credit and
financing solutions
 Largest provider of private label credit cards in the US
 200,000 partners in retail, manufacturing, buying groups
and associations
 Focus on creating stronger engagement between buyers
and brands
 Tools and technologies – proprietary analytics and
tailored loyalty programs

3.  Improve upon current applicant risk evaluation
 Decrease default rate
 Improve consumer relationships
 Increase ROI
 Decrease capital losses
Our Goals

4. Current State
 Synchrony Financial default rate = 30%

5. What is a Random Forest?
 An ensemble of decision trees
 Accurate with supervised learning situations
 Efficient when working with large data sets
 Easy to build, tune, and adjust
 Allows us to identify most important variables

6. Pilot Results
 133 defaults per 575 loans or 23.13% default rate
 But is it a good fit?

7. But can we do better?

8. Pilot Modification
 Why modify?
 Decrease over-fitting
 Remove highly correlated variables
 Goals:
 Eliminate variables that could skew results
 Identify variables (applicant characteristics) to look for
 Ensure our model fits well and is useful

9. Modification Results

10. Most Important Variable?

11. Conclusions
 Anonymity
 Improved accuracy
 Increased ROI
 Increased relationships

12. Thank you.