segmentation
What It Means
Segmentation is the practice of dividing your data into meaningful groups based on shared characteristics or patterns. Instead of treating all your data as one massive pool, you create distinct buckets where similar records naturally belong together, making analysis and decision-making more targeted and effective.
Why Chief AI Officers Care
Proper segmentation directly impacts AI model performance by ensuring training data is appropriately grouped, leading to more accurate predictions and reduced bias. It also enables personalized customer experiences, targeted marketing campaigns, and risk management strategies that can significantly improve business outcomes and competitive advantage.
Real-World Example
A retail bank segments its customer data into groups like 'young professionals with high digital engagement,' 'retirees with traditional banking preferences,' and 'small business owners with fluctuating cash flow.' This allows them to train separate AI models for credit scoring, customize mobile app features, and tailor product recommendations for each segment.
Common Confusion
People often confuse segmentation with simple filtering or sorting data. Segmentation involves identifying meaningful patterns and creating strategic groupings that reveal insights, while filtering just selects records based on predetermined criteria without discovering underlying relationships.
Industry-Specific Applications
See how this term applies to healthcare, finance, manufacturing, government, tech, and insurance.
Healthcare: In healthcare, segmentation involves grouping patients based on clinical characteristics, risk factors, demographics, or...
Finance: In finance, segmentation enables institutions to categorize customers, assets, or portfolios based on risk profiles, cre...
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Includes:
- 6 industry-specific applications
- Relevant regulations by sector
- Real compliance scenarios
- Implementation guidance
Technical Definitions
NISTNational Institute of Standards and Technology
"The process of identifying homogeneous subgroups within a data table."Source: Raynor
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