CASE STUDY
FULL STACK DEVELOPMENT LAB (22PE0CS16)
CASE STUDY REPORT ON
Online Therapy Recommendation System
SUBMITTED BY
THIRUMAL HARSHITHA
ID: 22WJ8A0560
SECTION: CSE-04
DEPARTMENT OF CSE
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CASE STUDY
TABLE OF CONTENTS
S.NO TOPIC NAME PAGE NO
1 INTRODUCTION 3
2 OBJECTIVES 4
3 METHODOLOGY 5
4 IMPLEMENTATION 6-7
5 KEY ISSUES 7-8
6 OUTCOMES 9-10
7 CONCLUSION 10
8 REFERENCES 10
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CASE STUDY
INTRODUCTION
The Credit Card Default Prediction Web App is an innovative solution that combines
financial analysis, data science, and web-based technology to address one of the most
significant challenges faced by banks and credit card companies—predicting the risk of
customer default. With the exponential growth of credit services and digital payments,
customers are increasingly reliant on credit cards for daily purchases, online shopping, and
financial flexibility. While this growth has boosted financial inclusion and consumer
convenience, it has also raised the risk of defaults, where customers are unable or unwilling
to repay their outstanding balances. Such defaults not only create financial losses for banks
but also increase the burden of non-performing assets (NPAs) and reduce the overall stability
of the credit system. Traditional credit risk evaluation methods, such as manual credit scoring
and rule-based assessments, often fail to capture hidden patterns in customer behavior.
Hence, there is a growing need for automated, data-driven, and intelligent systems that can
provide timely and accurate predictions of default probability.The proposed web application
is designed to bridge this gap by integrating machine learning models with an interactive and
user-friendly web interface. At its core, the app utilizes predictive algorithms trained on
historical datasets, which include features such as demographic information, income levels,
repayment history, outstanding balances, past delinquencies, and transaction behavior. By
analyzing these parameters, the system can calculate the likelihood that a customer will
default on their credit card payments in the future. This predictive capability empowers
financial institutions to make proactive decisions, such as adjusting credit limits, rejecting
high-risk applications, or offering alternative repayment solutions. Unlike static scoring
systems, the web app adapts to dynamic financial trends, ensuring that its predictions remain
relevant even in changing economic environments.From a technical perspective, the Credit
Card Default Prediction Web App is built using modern web development frameworks and
machine learning libraries. The backend system hosts pre-trained models, typically using
algorithms such as Logistic Regression, Decision Trees, Random Forest, or Neural Networks,
depending on the complexity of the dataset and the accuracy requirements. The frontend
provides a clean interface where users, such as bank employees, financial analysts, or credit
managers, can input customer details and instantly obtain a risk score. The app may also
feature data visualization dashboards that display trends, default patterns, and customer
segmentation insights, which further enhance decision-making. Additionally, by deploying
the system on cloud platforms, scalability and real-time performance can be ensured, making
it practical for integration into existing banking infrastructures.Beyond predictive
functionality, the app carries important business and social implications. For financial
institutions, the ability to forecast defaults reduces bad debts and improves overall
profitability. It allows them to implement risk-based interest rates, offer personalized
repayment plans, and allocate credit resources more efficiently. For customers, predictive
systems can promote responsible lending by preventing over-borrowing and encouraging
repayment discipline. In cases where the system identifies medium-risk customers, banks can
provide financial counseling or structured repayment plans rather than outright rejecting
applications. This balance between business efficiency and customer welfare makes the
application highly valuable in today’s financial landscape.
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OBJECTIVES
The main objective of the Credit Card Default Prediction Web App is to provide a reliable,
efficient, and user-friendly platform that enables financial institutions and businesses to
predict the likelihood of customers defaulting on their credit card payments. By leveraging
data analytics and machine learning, the application aims to minimize financial risk, enhance
decision-making, and support proactive credit management.
Key Objectives:
1. Risk Assessment Automation
o Automate the process of predicting credit card payment defaults using
machine learning models.
o Reduce dependency on manual evaluation and subjective judgment.
2. Accurate Prediction of Defaults
o Provide high accuracy in forecasting potential defaulters by analyzing
historical financial, demographic, and behavioral data.
o Support banks and credit companies in early identification of risky customers.
3. Data-Driven Decision Making
o Enable credit institutions to make informed lending and credit limit decisions.
o Improve fairness and transparency in credit approval processes.
4. User-Friendly Interface
o Offer an intuitive web-based interface where users can upload customer data
and receive real-time prediction results.
o Present outputs with clear risk probabilities and visual insights (charts,
reports).
5. Proactive Risk Management
o Assist financial institutions in taking preventive measures such as adjusting
credit limits, sending reminders, or offering flexible repayment plans.
o Reduce overall financial losses due to non-performing loans.
6. Scalability & Integration
o Ensure the web app is scalable to handle large datasets.
o Provide options to integrate with existing banking systems for smooth
workflow.
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METHODOLOGY
The development of a Credit Card Default Prediction Web Application follows a structured
methodology to ensure accuracy, usability, and reliability. The methodology is divided into
four main phases: Data Processing, Model Development, Web App Design, and
Deployment.
1. Data Collection and Preprocessing
Dataset: Historical customer financial data (credit limit, past payments, age, income,
bill statements, etc.).
Data Cleaning: Removal of missing values, handling outliers, and standardizing data
formats.
Feature Engineering: Creation of meaningful variables (e.g., repayment ratio,
utilization rate) to enhance prediction accuracy.
Normalization/Encoding: Applying scaling for numerical attributes and encoding
categorical features for compatibility with ML models.
2. Model Development
Model Selection: Algorithms such as Logistic Regression, Random Forest, Gradient
Boosting, or Neural Networks are considered.
Training & Validation: Data is split into training and testing sets (e.g., 80–20 split).
Cross-validation ensures robustness.
Evaluation Metrics: Accuracy, Precision, Recall, F1-score, and ROC-AUC are used
to assess performance, with a focus on minimizing false negatives (missed defaulters).
Optimization: Hyperparameter tuning (e.g., Grid Search, Random Search) is applied
for better results.
3. Web Application Development
Backend: Implemented using Flask/Django (Python) for model integration.
Frontend: User-friendly interface built with HTML, CSS, and JavaScript for
customer input and visualization.
Functionality: Users can enter financial details, and the system predicts default
probability with explanatory insights.
Security: Basic authentication and data validation are ensured for safe usage.
4. Deployment and Testing
Deployment: Hosted on cloud platforms (Heroku, AWS, or Azure) for accessibility.
Testing: Unit testing for model accuracy, usability testing for interface, and stress
testing for performance under high load.
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IMPLEMENTATION
The Credit Card Default Prediction Web App is designed to predict whether a customer is
likely to default on their credit card payment using historical data and machine learning. The
implementation involves the following steps:
1. Data Collection and Preprocessing
Dataset such as UCI Credit Card Default Dataset is used.
Preprocessing includes handling missing values, encoding categorical variables,
feature scaling, and splitting into train/test sets.
Example features: age, income, bill_amt, pay_amt, education, marital status, previous
payments.
2. Model Development
Algorithms such as Logistic Regression, Random Forest, XGBoost are trained.
Hyperparameter tuning is performed using GridSearchCV.
Best model is saved using joblib/pickle for deployment.
3. Web Application Framework
Flask or Django is used to build the backend.
A simple HTML/CSS/Bootstrap frontend is created with input forms for user data.
User submits details → backend applies preprocessing → ML model predicts default
probability.
4. Deployment Workflow
Flask app has two routes:
o / → Home page with input form.
o /predict → Returns prediction result (Default / No Default).
Example Flask Code:
from flask import Flask, request, render_template
import joblib
app = Flask( name )
model = joblib.load("credit_model.pkl")
@app.route('/')
def home():
return render_template('index.html')
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@app.route('/predict', methods=['POST'])
def predict():
features = [float(x) for x in request.form.values()]
prediction = model.predict([features])
return render_template('index.html', result="Default" if prediction==1 else "No Default")
if name == ' main ':
app.run(debug=True)
5. Deployment and Hosting
Local deployment → Flask server.
Cloud deployment using Heroku, AWS, or Streamlit Sharing for public access.
Containerization with Docker for scalability.
6. User Interaction
End-user enters customer details.
The system predicts “Likely to Default” or “Not Likely to Default”.
Visualizations (charts of risk probability) can be added using Matplotlib/Plotly.
KEY ISSUES
Key Issues in Credit Card Default Prediction
1. Data Quality & Availability
o Credit card datasets often suffer from missing values, outliers, and noisy
records, which reduce the reliability of predictions.
o Incomplete attributes such as missing income levels, employment history, or
payment delays must be handled carefully through data preprocessing,
imputation, and cleaning techniques.
o Limited availability of diverse datasets can lead to biased models that may not
generalize well across different customer demographics or regions.
2. Imbalanced Classification
o Credit card defaults are rare events compared to timely payments. Typically,
only 5–10% of customers may default, while the majority do not.
o This leads to class imbalance, where traditional models tend to favor the
majority class ("no default") and ignore the minority class ("default").
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o Addressing imbalance requires techniques such as SMOTE (Synthetic
Minority Oversampling), cost-sensitive learning, or anomaly detection
approaches to ensure defaults are not overlooked.
3. Feature Selection & Engineering
o Identifying key predictors (e.g., income, credit limit, past payment behavior,
spending patterns, debt-to-income ratio) is crucial for building accurate
models.
o Poor feature selection may cause overfitting or result in models that pick up
on irrelevant correlations.
o Advanced methods like PCA, regularization (Lasso/Ridge), and domain-
driven feature engineering help optimize model performance.
4. Model Interpretability & Trust
o Financial applications require explainable AI (XAI) since customers,
regulators, and banks must understand why a customer was flagged as "high
risk."
o While complex models (e.g., deep learning, ensemble methods) may achieve
high accuracy, they act as black boxes and hinder trust.
o Techniques like SHAP, LIME, and decision tree visualization help interpret
predictions, making them more transparent for end-users and regulatory
audits.
5. Deployment & Integration Challenges
o Deploying a credit risk prediction model into a web application requires
ensuring real-time processing so that banks can instantly assess new
applicants.
o The system must be scalable to handle thousands of requests per second,
secure to protect sensitive financial data, and user-friendly so analysts and
customers can interact easily.
o Integration with existing banking systems, APIs, and databases is complex
and demands robust architecture.
6. Ethical, Privacy, & Regulatory Concerns
o Financial data is highly sensitive and protected under regulations like GDPR
(General Data Protection Regulation) and PCI-DSS (Payment Card
Industry Data Security Standard).
o The model must avoid biases against certain groups (e.g., based on gender,
ethnicity, or age), ensuring fair lending practices.
o Data encryption, anonymization, and strict access controls are necessary to
maintain confidentiality, integrity, and fairness of the system.
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OUTCOMES
Outcomes of Credit Card Default Prediction Web App
1. Accurate Prediction
o The system leverages advanced machine learning algorithms to predict the
likelihood of customer default with high precision.
o By continuously retraining on updated financial datasets, the app ensures that
predictions remain reliable and adaptive to changing economic conditions.
o Higher accuracy helps reduce both false positives (wrongly flagging safe
customers as risky) and false negatives (missing actual defaults), leading to
balanced and effective decision-making.
2. Enhanced Risk Management
o Banks and financial institutions can identify high-risk customers early,
preventing major financial losses.
o Predictions help in proactive measures, such as revising credit limits,
restructuring loans, or offering financial counseling.
o It strengthens the institution’s portfolio risk management, ensuring better
compliance with regulatory risk standards (e.g., Basel Accords).
3. Decision Support System
o The app provides data-driven insights to credit managers and loan officers,
enabling more informed decisions in approving or rejecting credit
applications.
o Instead of relying solely on traditional scoring models, the system incorporates
dynamic factors like payment history trends, spending patterns, and
income variations.
o This ensures that lending decisions are objective, fair, and transparent.
4. User-Friendly Interface
o The web app is designed for non-technical users, such as loan officers,
customer service agents, and financial advisors.
o Users can easily input customer details (e.g., salary, credit limit, past
payments) and receive instant predictions in a clear, interpretable format.
o Visualization dashboards (charts, graphs, and risk scores) improve usability
and decision clarity, even for stakeholders with minimal data science
knowledge.
5. Model Explainability & Trust
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o Tools like SHAP (SHapley Additive Explanations) and LIME (Local
Interpretable Model-agnostic Explanations) are integrated to provide
transparent reasoning behind predictions.
o For instance, the system can highlight whether high debt ratio, irregular
payments, or low income contributed most to a default prediction.
o This increases trust among regulators, auditors, and end-users, making the
system more reliable for real-world adoption.
6. Scalability & Automation
o The app is built on a scalable architecture that can process thousands of
customer records in real-time without performance bottlenecks.
o Automated workflows allow seamless integration with banking systems,
APIs, and databases, ensuring smooth operations.
o The system supports continuous monitoring and automated model
retraining, keeping performance robust as new financial data becomes
available.
CONCLUSION
The Credit Card Default Prediction Web App demonstrates how data analytics and
machine learning can improve financial decision-making. By addressing challenges such as
imbalanced data, privacy, and interpretability, the system delivers reliable predictions that aid
risk assessment. The outcome is a scalable, secure, and user-friendly tool that benefits
financial institutions by minimizing defaults, improving credit strategies, and enhancing
customer trust.
REFERENCES
https://openai.com/index/chatgpt/
http://www.google.com
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