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Beyond Beer and Nappies

We all know the data mining story about putting the beer next to the nappies but do you know... Whether credit applicants using pen or pencil are more likely to default? Or What's the best way to catch Australian cheats (sorry only off the rugby field!)?

For answers to these, as well as the new crop of data mining legends-in-the-making, read on...


Fraud detection, customer attrition, propensity to buy are among today's applications of data mining

DAYTON, Ohio - Ten years ago, Teradata, a division of NCR Corporation (NYSE: NCR), pioneered the field of data mining by looking at sales data from a retailer and discovering that in the evening hours, beer and diapers are often purchased together. This relationship, called a data mining affinity, captured the imagination of industry watchers, spawning a legend that has been recounted hundreds of times and is frequently cited as the textbook example of data mining.

Today, Teradata's data mining lab helps companies in many industries tap into their business data to take on more pressing issues like detecting fraud, understanding which customers are likely to defect, identifying customers who are likely to need additional products or services and discovering which customers are most profitable. In recognition of the tenth anniversary of the beer and diapers legend, Teradata's data mining experts have compiled their favourite Teradata data mining legends-in-the-making:

A REAL HORSE PILL A European healthcare provider used data mining to discover that one patient was filling prescriptions at such a rate that he would have died from the dosage. When they investigated, they found the patient was feeding the pills to his ailing horse.

PEN & INK A financial institution used data mining to discover that credit applicants who used pencil on the form were much more likely to default than those who filled out the application using ink.

DATA & TAXES The states of Texas and Iowa have collected $158 million and $33 million, respectively, using data mining to uncover individuals and corporations that are avoiding or underpaying state tax. The states combed through data from various government sources including customs, transportation, public safety, federal taxes and unemployment. Texas even looked at aircraft registrations to identify owners of small planes who owed tax on their aircraft Iowa looked at companies paying unemployment insurance and found one company with employees in the state that owed $5 million.

AUSTRALIAN CHEATS Australia's national social services agency CentreLink, uses data mining to identify welfare cheats and identity theft. They've prosecuted 144 identity frauds in the past year, saving A$3 million. The agency estimates it saves millions every year avoiding fraudulent welfare claims and overpayments.

MINING MINES The U.S. Labour Department's Mine Safety and Health Administration mines their mine data. After consolidating multiple, disparate systems, the department is able to look at all their data including inspection records, safety violations and miners' training and certifications. Now that requests for information are nearly instantaneous--rather than passing through several channels--the organisation has seen improvements in safety and productivity.

NOTES TO EDITORS ** National Fraud Awareness Week is August 4-10, 2002 ** A data mining webcast archive is available at -- "Beyond Beer and Diapers: The Origins and Future of Data Mining"

About Teradata Division Teradata, a division of NCR Corporation, offers powerful analytical solutions that help businesses drive growth. Teradata solutions include the Teradata database, and analytical applications for customer relationship management, operations and financial management, business performance management and e-business. To learn more about Teradata Division and its solutions, go to

About NCR Corporation NCR Corporation (NYSE: NCR) is a leading global technology company helping businesses build stronger relationships with their customers. NCR's ATMs, retail systems, Teradata data warehouses and IT services provide Relationship Technology solutions that maximise the value of customer interactions. Based in Dayton, Ohio, NCR ( employs approximately 30,400 people worldwide.

NCR and Teradata are trademarks or registered trademarks of NCR Corporation in the United States and other countries.

Michelle Cruickshank 141 dynamics +64 9 306 6472 (ddi) +64 21 500 472 (mob)

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