Internship Report

on
PROJECTTITLE (IN CAPITAL
LETTERS ONLY)
This line is also for TITLE only
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Submitted in partial fulfilment ofthe requirements for the award of the degree
of
BACHELOR OF TECHNOLOGY
In
ELECTRICAL AND ELECTRONICS ENGINEERING
Submitted by
R.S.V.KRISHNA
21B91A02C6

Next24tech Pvt Ltd, Hyderabad

Duration:10-11-2023 to 10-01-2024

DEPARTMENT OF ELECTRICAL AND ELECTRONICS ENGINEERING

S.R.K.R. ENGINEERING COLLEGE (A)

(Affiliated to JNTU KAKINADA)(Approved by A.I.C.T.E, New Delhi)
(Accredited by N.B.A., NAAC with ‘A+’ grade, New Delhi)
SRKR MARG, CHINNA AMIRAM, BHIMAVARAM-534204.

(2024)
 S.R.K.R. ENGINEERING COLLEGE (A)
(Affiliated to JNTU KAKINADA) (Recognized by A.I.C.T.E, New Delhi)
(Accredited by N.B.A., NAAC with ‘A+’ grade, New Delhi)
CHINNA AMIRAM, BHIMAVARAM-534204

DEPARTMENT OF ELECTRICAL AND ELECTRONICS

ENGINEERING

Certificate
This is to certify that the summer Internship Report titled “FRAUD DETECTION ON
BANK PAYMENTS” is the bonafied work done by Mr. S.Vijay Kumar Raju
(21B91A02D0) at the end of Second year B. Tech ., at Next24tech Pvt Ltd,
Hyderabad from 10-11-2023 to 10-01-2024 in partial fulfilment of the requirements for the
award of the Degree of „Bachelor of Technology‟ with specialization of Electrical and
Electronics Engineering in S.R.K.R. Engineering College (A), Bhimavaram.

Dean, T&P Mentor Internship Coordinator

Head of the
Department
 VALID
INTERNSHIP
CERTIFICATE
Given
By
the
COMPAN
Y

iv
 DECLARATION

TheSummerInternship Project report entitled “FRAUD DETECTION ON BANK

PAYMENTS” has been carried out by me in the partial fulfilment of the requirements for
the award of the degree of Bachelor of Technology in the Department of Electrical and
Electronics Engineering,Sagi Rama KrishnamRaju Engineering College (A), Bhimavaram.
I hereby declare that this work has not been submitted to any other university/institute for
the award of any other degree/diploma.

Roll. No. Name Signature

21B91A02D0 S.Vijay kumar raju

v
 Table of Contents
S. No Name Page.No

1. Introduction 4
4
1. What are the different types of Machine Learning?
4
2. Benefits of Using Machine Learning in Bank Marketing
5
3. About Industry (Bank Marketing)
5
4. AI / ML Role in Bank Marketing
6
2. Bank Marketing Dataset content 6
1. Main Drivers for AI Bank Marketing
7
2. Internship Project - Data Link
8
3. AI / ML Modelling and Results 8
1. Your Problem of Statement
8
2. Data Science Project Life Cycle 9
1. Data Exploratory Analysis 9
2. Data Pre-processing 9
1. Check the Duplicate and low variation data 10
2. Identify and address the missing variables 10
3. Handling of Outliers 10
4. Categorical data and Encoding Techniques 10
5. Feature Scaling 10
3. Selection of Dependent and Independent variables 10
4. Data Sampling Methods 10
1. Stratified sampling 11
2.Simple random 11

sampling 3.2.5Models Used for 11

11
Development
11
3. Model 01
11
4. Model 02
11
5. Model 03
6. Model 04 1
7. Model 10 2
12
3. AI / ML Models Analysis and
12
Final Results
12
1.Different Model codes
3.3.2Random Forest Python Code 13
3. 3.3Extra Trees Python code
14
4. Conclusions and
15
Future work 15
5. References 15
Appendices
4. Python code Results
5. List of Charts
 Abstract
Today organizations, which hire data scientists are especially interested in job candidate’s portfolio.
Analysis of organization’s marketing data is one of the most typical applications of data science and
machine learning. Such Analysis will definitely be a nice contribution to this portfolio.

In general, datasets which contain marketing data can be used for 2 different business goals:
1. Prediction of the results of the marketing campaign for each customer and clarification of
factors which affect the campaign results. This helps us to find out the ways how to make
marketing Campaigns more efficient.

2. Finding out customer segments, using data for customers, who subscribed to Term Deposit.
This helps to identify the profile of a customer, Who is more likely to acquire the product
and develop more targeted marketing campaigns.

This dataset containing bank marketing campaign data and we can use it to optimize marketing
campaigns to attract more customers to a term deposit Subscription

In order to optimize marketing campaigns with the help of a dataset, we will have to take following
steps:

1. Import data from datasets and perform initial high level analysis

2. Clean the Data

3. Use Machine Learning Techniques

Bank Marketing process steps:

 Understand the customer needs
 Develop a basic strategy
 Make a Decision
 Execute a plan
 Deliver the results
 CHAPTER 1
INTRODUCTION

With the increasing power of computer technology, companies and institutions can
nowadays store large amounts of data at reduced cost. The amount of available data is
increasing exponentially and cheap disk storage makes it easy to store data that previously
was thrown away. There is a huge amount of information locked up in databases that is
potentially important but has not yet been explored. The growing size and complexity of
the databases makes it hard to analyse the data manually, so it is important to have
automated systems to support the process. Hence there is the need of computational tools
able to treat these large amounts of data and extract valuable information.

In this context, Data Mining provides automated systems capable of processing large
amounts of data that are already present in databases. Data Mining is used to
automatically extract important patterns and trends from databases seeking regularities or
patterns that can reveal the structure of the data and answer business problems. Data mining
includes learning techniques that fall into the field of Machine learning. The growth of
databases in recent years brings data mining at the forefront of new business technologies.

A key challenge for the insurance industry is to charge each customer an appropriate price
for the risk they represent. Risk varies widely from customer to customer and a deep
understanding of different risk factors helps predict the likelihood and cost of insurance
claims. The goal of this program is to see how well various statistical methods perform in
predicting auto Insurance claims based on the characteristics of the driver, vehicle and
driver / vehicle coverage details.

A number of factors will determine BI claims prediction among them a driver's age, past
accident history, and domicile, etc. However, this contest focused on the relationship
between claims and vehicle characteristics well as other characteristics associated with the
auto insurance policies.
1.1. What are the different types of Machine Learning?

How Machine Learning Works?

Machine learning uses two types of techniques:

Supervised learning, which trains a model on known input and output data so that
it can predict future outputs, and Unsupervised learning, which finds hidden
patterns or intrinsic structures in input data.

Supervised Learning:

Supervised machine learning builds a model that makes predictions based on evidence
in the presence of uncertainty. A supervised learning algorithm takes a known set of
input data and known responses to the data (output) and trains a model to generate
reasonable predictions for the response to new data. Use supervised learning if you
have known data for the output you are trying to predict.
Supervised learning uses Regression and Classification techniques to develop predictive
models.

Fig 1.1 Types of machine learning

Regression techniques predict continuous responses - for example, changes in
temperature or fluctuations in power demand. Typical applications include electricity load
forecasting and algorithmic trading.

Use regression techniques if you are working with a data range or if the nature of
your response is a real number, such as temperature or the time until failure for a
piece of equipment.

Common regression algorithms include linear model, nonlinear model, stepwise

regression, Gradient Descent Regression, Support Vector Regression, Ridge and
Lasso Regressions.

Classification techniques predict discrete responses - for example, whether an email is

genuine or spam, or whether a tumour is cancerous or benign. Classification models
classify inpu t data into categories. Typical applications include medical imaging, speech
recognition, and credit scoring.

Use classification if your data can be tagged, categorized, or separated into specific
groups or classes. For example, applications for hand-writing recognition use
classification to recognize letters and numbers.
In image processing and computer vision, unsupervised pattern recognition techniques
are used for object detection and image segmentation.

Common algorithms for performing classification include support vector machine

(SVM), boosted and bagged decision trees, k-nearest Neighbour, Naïve Bayes,
discriminant analysis, logistic regression, and neural networks.

Using Supervised Learning to Predict Heart Attacks: Suppose clinicians want to

predict whether someone will have a heart attack within a year. They have data on
previous patients, including age, weight, height, and blood pressure. They know
whether the previous patients had heart attacks within a year. So, the problem is
combining the existing data into a model that can predict whether a new person will have
a heart attack within a year.
Unsupervised Learning:
Unsupervised learning finds hidden patterns or intrinsic structures in data. It is
used to draw inferences from datasets consisting of input data without labelled
responses.

Clustering is the most common unsupervised learning technique. It is used for

exploratory data analysis to find hidden patterns or groupings in data. Applications
for cluster analysis include gene sequence analysis and market research.

For example, if a cell phone company wants optimize the locations where they build
cell phone towers, they can use machine learning to estimate the number of clusters of
people relying on their towers. A phone can only talk to one tower at a time, so the
team uses clustering algorithms to design the best placement of cell towers to
optimize signal reception for groups, or clusters, of their customers.

Common algorithms for performing clustering include k-means and k-

medoids, Apriori algorithms, hierarchical clustering, Gaussian mixture
models and hidden Markov models.

1.2. Benefits of Using Machine Learning in Airlines.

Exploring the Advantages and Disadvantages of Machine Learning:

• When it comes to learning technology, we should be aware of the pros and

cons of that technology. The reason is so that we can understand the
capabilities of that subject.

• That is exactly what we are doing here. Understanding the advantages

and disadvantages of Machine Learning will help us to unlock many doors.
• The advantages of Machine Learning are vast. It helps us to create ways of
modernizing technology. The disadvantages of Machine Learning tell us its limits
and side effects. This helps us to find different innovative ways to reduce these
problems.

Advantages of Machine Learning:

• Automation of Everything: Machine Learning is responsible for
cutting the workload and time. By automating things, we let the algorithm do
the hard work for us. Automation is now being done almost everywhere. The
reason is that it is very reliable. Also, it helps us to think more creatively.
Due to ML, we are now designing more advanced computers. These
computers can handle various Machine Learning models and algorithms
efficiently. Even though automation is spreading fast, we still don’t
completely rely on it. ML is slowly transforming the industry with its
automation.

• Wide Range of Applications: ML has a wide variety of

applications. This means that we can apply ML on any of the major fields.
ML has its role everywhere from medical, business, banking to science
and tech. This helps to create more opportunities. It plays a major role in
customer interactions. Machine Learning can help in the detection of
diseases more quickly. It is helping to lift up businesses. That is why investing
in ML technology is worth it.

• Scope of Improvement: Machine Learning is the type of technology

that keeps on evolving. There is a lot of scope in ML to become the top
technology in the future. The reason is it has a lot of research areas in it. This
helps us to improve both hardware and software. In hardware, we have various
laptops and GPU. These have various ML and Deep
Learning networks in them. These help in the faster processing power
of the system. When it comes to software, we have various UI and libraries in
use. These help in designing more efficient
algorithms.
 • Efficient Handling of Data: Machine Learning has many factors that make
it reliable.
One of them is data handling. ML plays the biggest role when it comes
to data currently. It can
handle any type of data. Machine Learning can be multidimensional or
different types of data. It can
process and analyze these data those normal systems can’t. Data is the most
important part of any
Machine Learning model. Also, studying and handling of data is a field.
• Best for Education and Online Shopping:

ML would be the best tool for education in the future. It provides very creative
techniques to help students study.

Recently in China, a school has started to use ML to improve student focus. In

online shopping, the ML model studies your searches. Based on your search
history, it would provide advertisements.
These will be about your search preferences in previous searches. In this, the
search history is the data for the model. This is a great way to improve e-
commerce with ML.

3. About Industry (Bank Marketing)

The bank marketing industry has been going through massive transformations in
the past couple of years. With more emphasis on customized loan plans and the
increasing level of market competition. Bank marketing is known for its nature of
developing a unique brand image,which is treated as the capital reputation of the
financial academy. It is very important for a bank to develop good relationship with
valued customers accompanied by innovative ideas which can be used as measures
to meet their requirements. Basically, banks engage in transaction of products and
services through their retail outlets known as branches to different customers at the
grassroots
level. This is referred as the ‘top to bottom’ approach. Relationship banking can
be defined as a process that includes proactively predicting the demands of
individual bank customers and taking steps to meet these demands before the
client shows them.
 1. AI / ML Role in Bank Marketing:

Machine Learning is a sub-set of artificial intelligence where computer algorithms

are used to autonomously learn from data. Machine learning (ML) is getting more
and more attention and is becoming increasingly popular in many other industries.
Within the insurance industry, there is more application of ML regarding the Bank
Marketing.

2.0 Bank Marketing Dataset content:

The data is related with direct marketing campaigns of a Portuguese banking instructions.

The marketing campaigns were based on phone calls. Often, more than one contact to the

same client was required, in order to access if the product(bank term deposit) was subscribed

or not. Data set has 16 predicator variables and 45K rows . Customers who received phone

calls not be unique and a same customer might receive multiple phone calls.

The last column y will be the target variable.

The main factors for term deposit claims are Age, Job, Education, Marital , Default , Housing,
Loan, balance , contact, month, day, duration, campaign, previous.outcomes,days…

2.1 Main Drivers for AI Airlines

Predictive modelling allows for simultaneous consideration of many variables

and quantification of their overall effect. When a large number of claims
are analysed, patterns regarding the characteristics of the claims that drive
loss development begin to emerge.
The following are the main drivers which influencing the term
deposit Analytics:
Policy Characteristics Term Deposit Information
 Exposures  Pays higher interest rates
 Limits and Deductibles  Claimant data (Credit
info, geography, social data, etc.)
 Subscriptions
 Other participants
Insured Characteristics (customers,
mediators,
 Credit Information
etc.)
 Prior loss experience  Fixed and Reset Daily
 Payment history  Active Participation

Geography based on insured Date and time of Profits and

locations Report
 Auto Repair Costs Details from Prior Claims
 Jurisdictional Orientation  from same insured
 Demographics  from same claimant

Agency Characteristics  from same location

 Exclusive Agents  Household Characteristics
 Independent Agents
2.2 Internship Project - Data Link

The data is related to the customers of age , gender ,Zipcode , merchant , category , amount ,

Fraud these are the main factors of this dataset.

The internship project data has taken from Kaggle and the link is:

Kaggle

https://www.kaggle.com/code/gustavooff/fraud-detection-on-bank-payments/notebook
 1. AI / ML Modelling and Results

2. Your Problem of Statement

Predictive models are most effective when they are constructed using a company’s own
historical claims data since this allows the model to recognize the specific nature of a
company’s exposure as well as its claims practices. The construction of the model also
involves input from the company throughout the process, as well as consideration of industry
leading claims practices and benchmarks.

Predictive modelling can be used to quantify the impact to the claims department resulting from
the failure to meet or exceed claim service leading practices. It can also be used to identify the
root cause of claim leakage. Proper use of predictive modelling will allow for potential savings
across two dimensions:

Early identification of claims with the potential for high leakage, thereby allowing for
the proactive management of the claim

Recognition of practices that are unnecessarily increasing claims settlement payments.

3.2 Data Science Project Life Cycle

Data Science is a multidisciplinary field of study that combines programming skills, domain
expertise and knowledge of statistics and mathematics to extract useful insights and knowledge
from data.

In simple terms, a data science life cycle is nothing but a repetitive set of steps that you need to
take to complete and deliver a project/product to your client.

Although the data science projects and the teams involved in deploying and developing the
model will be different, every data science life cycle will be slightly different in every other
company.
However, most of the data science projects happen to follow a somewhat similar process.

In order to start and complete a data science-based project, we need to understand the various roles
and responsibilities of the people involved in building, developing the project.
 1. Data Exploratory Analysis

Exploratory Data Analysis refers to the critical process of performing initial

investigations on data so as to discover patterns, to spot anomalies, to test hypothesis
and to check assumptions with the help of summary statistics and graphical
representations.

2. Data Pre-processing

Data pre-processing, a component of data preparation, describes any type of processing

performed on raw data to prepare it for another data processing procedure. It has
traditionally been an important preliminary step for the data mining process. More
recently, data preprocessing techniques have been adapted for training machine
learning models and AI models and for running inferences against them.

Data pre-processing transforms the data into a format that is more easily and effectively
processed in data mining, machine learning and other data science tasks. The techniques
are generally used at the earliest stages of the machine learning and AI development
pipeline to ensure accurate results.
3.2.1.1 Check the Duplicate and low variation data

Types of Duplicate Features in Machine Learning:

Two things distinguish top data scientists from others in most cases: Feature Creation and
Feature Selection. i.e., creating features that capture deeper/hidden insights about the business
or customer and then making the right choices about which features to choose for your model.

1. Duplicate Values (Same value for each record)

2. Duplicate Index (value of two features are different but they occur at the

same index) Keeping duplicate features in your dataset introduces the

problem of multicollinearity.
 In the case of linear models, weights distribution between the two
features will be problematic.
 If you are using tree-based modes, it won’t matter unless you are looking
at feature importance.
 In the case of distance-based models, it will make that feature count more
in the distance.

3.2.2.2 Identify and address the missing variables

What are missing data?

Missing data are values that are not recorded in a dataset. They can be a single value missing
in a single cell or missing of an entire observation (row). Missing data can occur both in a
continuous variable (e.g., height of students) or a categorical variable (e.g., gender of a
population).

Missing data are common in any field of natural or behavioral science, but it is particularly
commonplace in social sciences research data.

In programming languages, missing values are represented as NA or Nan or simply an

empty cell in an object.
• The origins of missing data

So where do the missing values come from, and why do they even exist?

Let’s give an example. You are administering a questionnaire survey among a sample
of respondents; and in the questionnaire, you are asking a question about household
income. Now, what if a respondent refuses to answer that question? Would you make
that up or rather leave the field empty? You’d probably leave that cell empty —
creating an instance of missing value

• Problems caused

Missing values are undesirable, but it is difficult to quantify the magnitude of

effects in statistical and machine learning projects. If it’s a large dataset and a very
small percentage of data is missing the effect may not be detectable at all.

However, if the dataset is relatively small, every data point counts. In these
situations, a missing data point means loss of valuable information.

In any case, generally missing data creates imbalanced observations, cause biased
estimates, and in extreme cases, can even lead to invalid conclusion.

Case deletion: if the dataset is relatively large delete the complete record with a
missing value Substitution: substitute missing cells with (a) column mean, (b)
mean of nearest neighbors, (c) moving average, or (c) filling with the last
observation

Statistical imputation: a regression can be an effective way to determine the value

of missing cell given other information in the dataset

Sensitivity analysis: if the sample is small or missing values are relatively large
then conduct a sensitivity analysis with multiple variations of outcomes.

3.2.2.2 Identify objects and convert into numerical values:

 Defining data types when reading a CSV file

 Creating a custom function to convert data type
 as type () vs. to numeric ()
When doing data analysis, it is important to ensure correct data types. Otherwise, you may
get unexpected results or errors. In the case of Pandas, it will correctly infer data types in
many cases, and you can move on with your analysis without any further thought on the
topic.
Despite how well pandas works at some point in your data analysis process you will likely
need to explicitly convert data from one type to another. This article will discuss how to
change data to a numeric type. More specifically, you will learn how to use the Pandas built-
in methods as type () and to numeric () to deal with the following common problems:

 Converting string/int to int/float

 Converting float to int
 Converting a column of mixed data types
 Handling missing values
 Converting a money column to float
 Converting Boolean to 0/1
 Converting multiple data columns at once
3.2.2.3 Handling of Outliers

What is an outlier?

An outlier is an observation that lies an abnormal distance from other values in a random
sample from a population.

There is, of course, a degree of ambiguity. Qualifying a data point as an anomaly leaves it up
to the analyst or model to determine what is abnormal—and what to do with such data
points.
There are also different degrees of outliers:

• Mild outliers lie beyond an “inner fence” on either side.

• Extreme outliers are beyond an “outer fence.”

 3.2.2.4 Categorical data and Encoding Techniques

What is Categorical Data?

Since we are going to be working on categorical variables in this article, here is a quick
refresher on the same with a couple of examples. Categorical variables are usually
represented as ‘strings’ or ‘categories’ and are finite in number. Here are a few examples:

1. The city where a person lives: Delhi, Mumbai, Ahmedabad, Bangalore, etc.

2. The department a person works in: Finance, Human resources, IT, Production.

3. The highest degree a person has: High school, Diploma, Bachelors, Masters, PhD.

4. The grades of a student: A+, A, B+, B, B- etc.

In the above examples, the variables only have definite possible values. Further, we can
see there are two kinds of categorical data-

• Ordinal Data: The categories have an inherent order

• Nominal Data: The categories do not have an inherent order

Label Encoding:

• We use this categorical data encoding technique when the categorical feature is
ordinal. In this case, retaining the order is important. Hence encoding should reflect
the sequence.

• In Label encoding, each label is converted into an integer value. We will create
a variable that contains the categories representing the education qualification
of a person.
1. Stratified sampling

Stratified sampling randomly selects data points from majority class so they will be
equal to the data points in the minority class. So, after the sampling both the class
will have same no of observations.

It can be performed using strata function from the library sampling.

2. Simple random sampling

Simple random sampling is a sampling technique where a set percentage of the data is
selected randomly. It is generally done to reduce bias in the dataset which can occur if
data is selected manually without randomizing the dataset.

We used this method to split the dataset into train dataset which contains 70% of
the total data and test dataset with the remaining 30% of the data.

Steps involved in Sampling:

The first stage in the sampling process is to clearly define the target population.

• So, to carry out opinion polls, polling agencies consider only the
people who are above 18 years of age and are eligible to vote in the
population. Sampling Frame – It is a list of items or people forming a
population from which the sample is taken.

• So, the sampling frame would be the list of all the people whose
names appear on the voter list of a constituency.
• Generally, probability sampling methods are used because every
vote has equal value and any person can be included in the sample
irrespective of his caste, community, or religion.
Different samples are taken from different regions all over the country.

• Sample Size – It is the number of individuals or items to be taken in a

sample that would be enough to make inferences about the population with the
desired level of accuracy and precision

• Once the target population, sampling frame, sampling technique,

and sample size have been established, the next step is to collect data from
the sample.
5. Models Used for Development

1. Model 01(Logistic regression)

Logistic uses logistic link function to convert the likelihood values to probabilities so we
can get a good estimate on the probability of a particular observation to be positive class or
negative class. The also gives us p-value of the variables which tells us about significance of
each independent variable.

2. Model 02(Decision Tree Classifier)

Decision Tree is a Supervised learning technique that can be used for both classification
and Regression problems, but mostly it is preferred for solving Classification problems. It is a
treestructured classifier, where internal nodes represent the features of a dataset, branches
represent the decision rules, and each leaf node represents the outcome.

In a Decision tree, there are two nodes, which are the Decision Node and Leaf Node.
Decision nodes are used to make any decision and have multiple branches, whereas Leaf
nodes are the output of those decisions and do not contain any further branches.

The decisions or the test are performed based on features of the given dataset.
 It is a graphical representation for getting all the possible solutions to a
problem/decision based on given conditions.

It is called a decision tree because, like a tree, it starts with the root node, which
expands on further branches and constructs a tree-like structure.

Decision Trees (DTs) are a non-parametric supervised learning method used for
classification and regression. The goal is to create a model that predicts the value of a
target variable by learning simple decision rules inferred from the data features. A tree
can be seen as a piece wise constant approximation

3.2.5.3 Model 03(Random Forest Classifier)

Random forest is an algorithm that consists of many decision trees. It was first
developed by Leo Bierman and Adele Cutler. The idea behind it is to build several trees, to
have the instance classified by each tree, and to give a "vote" at each class. The model uses
a "bagging" approach and the random selection of features to build a collection of
decision trees with controlled variance. The instance's class is to the class with the
highest number of votes, the class that occurs the most within the leaf in which the
instance is placed.

The error of the forest depends on:

• Trees correlation: the higher the correlation, the higher the forest error rate.

• The strength of each tree in the forest. A strong tree is a tree with low error. By using

trees that classify the instances with low error the error rate of the forest decreases.

3.2.5.4 Model 04(Extra Trees Classifier)

This class implements a meta estimator that fits several randomized decision trees
(a.k.a. extra-trees) on various sub-samples of the dataset and uses averaging to improve
the predictive accuracy and control over- fitting.
 3.2.5.5 Model 05(KNN Classifier)
K-Nearest Neighbor is one of the simplest Machine Learning algorithms based on
Supervised Learning technique K-NN algorithm assumes the similarity between the new
case/data and available cases and put the new case into the category that is most like the
available categories’-NN algorithm stores all the available data and classifies a new data
point based on the similarity. This means when new data appears then it can be easily
classified into a well suite category by using KNN algorithm.

K-NN algorithm can be used for Regression as well as for Classification but mostly it
is used for the Classification problems K-NN is a non-parametric algorithm, which means it
does not make any assumption on underlying data. It is also called a lazy learner algorithm
because it does not learn from the training set immediately instead it stores the dataset and
at the time of classification, it performs an action on the dataset KNN-algorithm at the
training phase just stores the dataset and when it gets new data, then it classifies that data
into a category that is much like the new data.

6. Model 06(Naïve Bayes)

Naïve Bayes is a probabilistic machine learning algorithm used for many classification
functions and is based on the Bayes theorem. Gaussian Naïve Bayes is the extension
of naïve Bayes. While other functions are used to estimate data distribution, Gaussian
or normal distribution is the simplest to implement as you will need to calculate the
mean and standard deviation for the training data.

What is the Naive Bayes Algorithm?

Naive Bayes is a probabilistic machine learning algorithm that can be used in several
classification tasks. Typical applications of Naive Bayes are classification of
documents, filtering spam, prediction and so on. This algorithm is based on the
discoveries of Thomas Bayes and hence its name.
 The name “Naïve” is used because the algorithm incorporates features in its
model that are independent of each other. Any modifications in the value of one
feature do not directly impact the value of any other feature of the algorithm. The
main advantage of the Naïve Bayes algorithm is that it is a simple yet powerful
algorithm.

It is based on the probabilistic model where the algorithm can be coded easily, and
predictions did quickly in real-time. Hence this algorithm is the typical choice to
solve realworld problems as it can be tuned to respond to user requests instantly.
But before we dive deep into Naïve Bayes and Gaussian Naïve Bayes, we must
know what is meant by conditional probability.

7. Model 07(XG Boost)

XG Boost is an implementation of Gradient Boosted decision trees. This library

was written in C++. It is a type of Software library that was designed basically to improve
speed and model performance. It has recently been dominating in applied machine
learning. XG Boost models majorly dominate in many Kaggle.

Competitions. In this algorithm, decision trees are created in sequential form.

Weights play an important role in XG Boost. Weights are assigned to all the independent
variables which are then fed into the decision tree which predicts results. The weight of
variables predicted wrong by the tree is increased and the variables are then fed to the
second decision tree. These individual classifiers/predictors then ensemble to give a strong
and more precise model. It can work on regression, classification, ranking, and user-
defined prediction problems.
3.2.5.8 Model 08(Light GBM)

Light GBM is a gradient boosting framework based on decision trees to

increases the efficiency of the model and reduces memory usage.

It uses two novel techniques: Gradient-based One Side Sampling and

Exclusive Feature Bundling (EFB) which fulfills the limitations of
histogram-based algorithm that is primarily used in all GBDT (Gradient
Boosting Decision Tree) frameworks. The two techniques of GOSS and
EFB described below form the characteristics of Light GBM Algorithm. They
comprise together to make the model work efficiently and provide it a cutting
edge over other GBDT frameworks.

Gradient-based One Side Sampling Technique for Light GBM:

Different data instances have varied roles in the computation of information

gain. The instances with larger gradients (i.e., under-trained instances) will
contribute more to the information gain. GOSS keeps those instances with
large gradients (e.g., larger than a
predefined threshold, or among the top percentiles), and only randomly drop
those instances with small gradients to retain the accuracy of information
gain estimation. This treatment can lead to a more accurate gain estimation
than uniformly random sampling, with the same target sampling rate,
especially when the value of information gain has a large range.

3.2.5.9 Model 09 (SVC)

Support Vector Machine or SVM is one of the most popular Supervised Learning
algorithms, which is
used for Classification as well as Regression problems. However, primarily, it is
used for Classification problems in Machine Learning.