Data Mining

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Models Created by Data Mining

• Linear Equations

• Rules

• Clusters

• Graphs

• Tree Structures

• Recurrent Patterns

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Knowledge Discovery in Databases (KDD)

• Select target data

• Preprocess data

• Transform (if necessary)

• Data mine information

• Interpret discovered structures

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Dependant and Independent Variables

• Dependant Variable - Attribute to be predicted.

• Independent Variable - Attributes used for making the prediction.

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Fields Contributing to Data Mining

• Database Technology• Statistics• Machine Learning• High Performance Computing• Pattern Recognition• Neural Networks• Data Visualization• Information Retrieval

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Applications of Data Mining

• Decision Making

• Process Control

• Information Management

• Query Processing

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Methods of Data Reduction

• Drill-down analysis

• Clustering

• Aggregation

• Simple Tabulation

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Exploratory Data Analysis (EDA)

• Distributions of Variables

• Correlation Matrices

• Multi-way Frequency Tables

• Cluster Analysis

• Classification Trees

• Other multivariate techniques

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Statistical Methods Used in Data Mining

• Regression Analysis

• Standard Distribution

• Cluster Analysis

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Industries Using Data Mining

• Banking

• Insurance

• Medicine

• Retail

• Security

• Sciences

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Financial Uses of Data Mining

• Fraud Detection

• Money Laundering Detection

• Risk Management

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Medical Uses of Data Mining

• Chemical Compounds

• Genetic Material

• Predictive Treatment Models

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Retail Uses of Data Mining

• Direct Marketing

• Store Design

• Store Operations

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Security Uses of Data Mining

• Assess crime patterns

• Homeland Security

• Identification of suspicious activities

• Pre-screening

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Scientific Uses of Data Mining

• Image analysis

• Classification of large data sets

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Other Novel Uses for Data Mining

• NBA’s Advanced Scout Program

• Firefly

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Predictive Analytics

• An advanced form of data mining that makes prediction models for the behavior of variables in large data sets.

• Highly specialized for each application

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Uses of Predictive Analytics

• Cost-Benefit Analysis

• Predicting Customer Behavior

• Reducing Costs

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Financial Uses of Predictive Analytics

• Credit Ratings

• Economic Prediction Models

• Federal Reserve

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Text Mining

• Extracts data from unstructured data sets

• Allows for data mining of large data sets that are not databases

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Sentiment Analysis

• Uses semantic techniques and keywords to detect favorable and unfavorable opinions toward specific subjects.

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Privacy Concerns with Data Mining

• Big Brother

• Puts too much power into the hands of Governmental Security Forces

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False Positives in Data Mining for Security Reasons

• Costs the people and the Government

• Subject of controversy and civilian mistrust

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Data Mining as Another Tool for Security

• Government doesn’t wish to interfere in civilian life

• Actual intrusions of privacy incur legal costs

• Useful for correlating with other sources of data

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Visual and Speech Processing

• Examining large amounts of real-time input for specific data and relationships between data

• Requires a certain amount of predictive modeling

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Data Mining is an Essential Use of Computers

• It makes the previously impossible possible

• Powerful tool for progress and understanding

• Lasting Impact