How do machine learning professionals make data readable and accessible? What techniques do they use to dissect raw information?

One of these techniques is clustering. Data clustering is the process of grouping items in a data set together. These items are related, allowing key stakeholders to make critical strategic decisions using the insights.

After preparing data, which is what specialists do 50%-80% of the time, clustering takes center stage. It forms structures other members of the company can understand more easily, even if they lack advanced technical knowledge.

Clustering in machine learning involves many techniques to help accomplish this goal. Here is a detailed overview of those techniques.

Clustering Techniques

Data science is an ever-changing field with lots of variables and fluctuations. However, one thing’s for sure – whether you want to practice clustering in data mining or clustering in machine learning, you can use a wide array of tools to automate your efforts.

Partitioning Methods

The first groups of techniques are the so-called partitioning methods. There are three main sub-types of this model.

K-Means Clustering

K-means clustering is an effective yet straightforward clustering system. To execute this technique, you need to assign clusters in your data sets. From there, define your number K, which tells the program how many centroids (“coordinates” representing the center of your clusters) you need. The machine then recognizes your K and categorizes data points to nearby clusters.

You can look at K-means clustering like finding the center of a triangle. Zeroing in on the center lets you divide the triangle into several areas, allowing you to make additional calculations.

And the name K-means clustering is pretty self-explanatory. It refers to finding the median value of your clusters – centroids.

K-Medoids Clustering

K-means clustering is useful but is prone to so-called “outlier data.” This information is different from other data points and can merge with others. Data miners need a reliable way to deal with this issue.

Enter K-medoids clustering.

It’s similar to K-means clustering, but just like planes overcome gravity, so does K-medoids clustering overcome outliers. It utilizes “medoids” as the reference points – which contain maximum similarities with other data points in your cluster. As a result, no outliers interfere with relevant data points, making this one of the most dependable clustering techniques in data mining.

Fuzzy C-Means Clustering

Fuzzy C-means clustering is all about calculating the distance from the median point to individual data points. If a data point is near the cluster centroid, it’s relevant to the goal you want to accomplish with your data mining. The farther you go from this point, the farther you move the goalpost and decrease relevance.

Hierarchical Methods

Some forms of clustering in machine learning are like textbooks – similar topics are grouped in a chapter and are different from topics in other chapters. That’s precisely what hierarchical clustering aims to accomplish. You can the following methods to create data hierarchies.

Agglomerative Clustering

Agglomerative clustering is one of the simplest forms of hierarchical clustering. It divides your data set into several clusters, making sure data points are similar to other points in the same cluster. By grouping them, you can see the differences between individual clusters.

Before the execution, each data point is a full-fledged cluster. The technique helps you form more clusters, making this a bottom-up strategy.

Divisive Clustering

Divisive clustering lies on the other end of the hierarchical spectrum. Here, you start with just one cluster and create more as you move through your data set. This top-down approach produces as many clusters as necessary until you achieve the requested number of partitions.

Density-Based Methods

Birds of a feather flock together. That’s the basic premise of density-based methods. Data points that are close to each other form high-density clusters, indicating their cohesiveness. The two primary density-based methods of clustering in data mining are DBSCAN and OPTICS.

DBSCAN (Density-Based Spatial Clustering of Applications With Noise)

Related data groups are close to each other, forming high-density areas in your data sets. The DBSCAN method picks up on these areas and groups information accordingly.

OPTICS (Ordering Points to Identify the Clustering Structure)

The OPTICS technique is like DBSCAN, grouping data points according to their density. The only major difference is that OPTICS can identify varying densities in larger groups.

Grid-Based Methods

You can see grids on practically every corner. They can easily be found in your house or your car. They’re also prevalent in clustering.

STING (Statistical Information Grid)

The STING grid method divides a data point into rectangular grills. Afterward, you determine certain parameters for your cells to categorize information.

CLIQUE (Clustering in QUEst)

Agglomerative clustering isn’t the only bottom-up clustering method on our list. There’s also the CLIQUE technique. It detects clusters in your environment and combines them according to your parameters.

Model-Based Methods

Different clustering techniques have different assumptions. The assumption of model-based methods is that a model generates specific data points. Several such models are used here.

Gaussian Mixture Models (GMM)

The aim of Gaussian mixture models is to identify so-called Gaussian distributions. Each distribution is a cluster, and any information within a distribution is related.

Hidden Markov Models (HMM)

Most people use HMM to determine the probability of certain outcomes. Once they calculate the probability, they can figure out the distance between individual data points for clustering purposes.

Spectral Clustering

If you often deal with information organized in graphs, spectral clustering can be your best friend. It finds related groups of notes according to linked edges.

Comparison of Clustering Techniques

It’s hard to say that one algorithm is superior to another because each has a specific purpose. Nevertheless, some clustering techniques might be especially useful in particular contexts:

  • OPTICS beats DBSCAN when clustering data points with different densities.
  • K-means outperforms divisive clustering when you wish to reduce the distance between a data point and a cluster.
  • Spectral clustering is easier to implement than the STING and CLIQUE methods.

Cluster Analysis

You can’t put your feet up after clustering information. The next step is to analyze the groups to extract meaningful information.

Importance of Cluster Analysis in Data Mining

The importance of clustering in data mining can be compared to the importance of sunlight in tree growth. You can’t get valuable insights without analyzing your clusters. In turn, stakeholders wouldn’t be able to make critical decisions about improving their marketing efforts, target audience, and other key aspects.

Steps in Cluster Analysis

Just like the production of cars consists of many steps (e.g., assembling the engine, making the chassis, painting, etc.), cluster analysis is a multi-stage process:

Data Preprocessing

Noise and other issues plague raw information. Data preprocessing solves this issue by making data more understandable.

Feature Selection

You zero in on specific features of a cluster to identify those clusters more easily. Plus, feature selection allows you to store information in a smaller space.

Clustering Algorithm Selection

Choosing the right clustering algorithm is critical. You need to ensure your algorithm is compatible with the end result you wish to achieve. The best way to do so is to determine how you want to establish the relatedness of the information (e.g., determining median distances or densities).

Cluster Validation

In addition to making your data points easily digestible, you also need to verify whether your clustering process is legit. That’s where cluster validation comes in.

Cluster Validation Techniques

There are three main cluster validation techniques when performing clustering in machine learning:

Internal Validation

Internal validation evaluates your clustering based on internal information.

External Validation

External validation assesses a clustering process by referencing external data.

Relative Validation

You can vary your number of clusters or other parameters to evaluate your clustering. This procedure is known as relative validation.

Applications of Clustering in Data Mining

Clustering may sound a bit abstract, but it has numerous applications in data mining.

  • Customer Segmentation – This is the most obvious application of clustering. You can group customers according to different factors, like age and interests, for better targeting.
  • Anomaly Detection – Detecting anomalies or outliers is essential for many industries, such as healthcare.
  • Image Segmentation – You use data clustering if you want to recognize a certain object in an image.
  • Document Clustering – Organizing documents is effortless with document clustering.
  • Bioinformatics and Gene Expression Analysis – Grouping related genes together is relatively simple with data clustering.

Challenges and Future Directions

  • Scalability – One of the biggest challenges of data clustering is expected to be applying the process to larger datasets. Addressing this problem is essential in a world with ever-increasing amounts of information.
  • Handling High-Dimensional Data – Future systems may be able to cluster data with thousands of dimensions.
  • Dealing with Noise and Outliers – Specialists hope to enhance the ability of their clustering systems to reduce noise and lessen the influence of outliers.
  • Dynamic Data and Evolving Clusters – Updates can change entire clusters. Professionals will need to adapt to this environment to retain efficiency.

Elevate Your Data Mining Knowledge

There are a vast number of techniques for clustering in machine learning. From centroid-based solutions to density-focused approaches, you can take many directions when grouping data.

Mastering them is essential for any data miner, as they provide insights into crucial information. On top of that, the data science industry is expected to hit nearly $26 billion by 2026, which is why clustering will become even more prevalent.

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Expert Pierluigi Casale analyzes the adoption of AI by companies, the ethical and regulatory challenges and the differentiated approach between large companies and SMEs

By Gianni Rusconi

Easier said than done: to paraphrase the well-known proverb, and to place it in the increasingly large collection of critical issues and opportunities related to artificial intelligence, the task that CEOs and management have to adequately integrate this technology into the company is indeed difficult. Pierluigi Casale, professor at OPIT (Open Institute of Technology, an academic institution founded two years ago and specialized in the field of Computer Science) and technical consultant to the European Parliament for the implementation and regulation of AI, is among those who contributed to the definition of the AI ​​Act, providing advice on aspects of safety and civil liability. His task, in short, is to ensure that the adoption of artificial intelligence (primarily within the parliamentary committees operating in Brussels) is not only efficient, but also ethical and compliant with regulations. And, obviously, his is not an easy task.

The experience gained over the last 15 years in the field of machine learning and the role played in organizations such as Europol and in leading technology companies are the requirements that Casale brings to the table to balance the needs of EU bodies with the pressure exerted by American Big Tech and to preserve an independent approach to the regulation of artificial intelligence. A technology, it is worth remembering, that implies broad and diversified knowledge, ranging from the regulatory/application spectrum to geopolitical issues, from computational limitations (common to European companies and public institutions) to the challenges related to training large-format language models.

CEOs and AI

When we specifically asked how CEOs and C-suites are “digesting” AI in terms of ethics, safety and responsibility, Casale did not shy away, framing the topic based on his own professional career. “I have noticed two trends in particular: the first concerns companies that started using artificial intelligence before the AI ​​Act and that today have the need, as well as the obligation, to adapt to the new ethical framework to be compliant and avoid sanctions; the second concerns companies, like the Italian ones, that are only now approaching this topic, often in terms of experimental and incomplete projects (the expression used literally is “proof of concept”, ed.) and without these having produced value. In this case, the ethical and regulatory component is integrated into the adoption process.”

In general, according to Casale, there is still a lot to do even from a purely regulatory perspective, due to the fact that there is not a total coherence of vision among the different countries and there is not the same speed in implementing the indications. Spain, in this regard, is setting an example, having established (with a royal decree of 8 November 2023) a dedicated “sandbox”, i.e. a regulatory experimentation space for artificial intelligence through the creation of a controlled test environment in the development and pre-marketing phase of some artificial intelligence systems, in order to verify compliance with the requirements and obligations set out in the AI ​​Act and to guide companies towards a path of regulated adoption of the technology.

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CCN: Australia Tightens Crypto Oversight as Exchanges Expand, Testing Industry’s Appetite for Regulation
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  • CCN, published on March 29th, 2025

By Kurt Robson

Over the past few months, Australia’s crypto industry has undergone a rapid transformation following the government’s proposal to establish a stricter set of digital asset regulations.

A series of recent enforcement measures and exchange launches highlight the growing maturation of Australia’s crypto landscape.

Experts remain divided on how the new rules will impact the country’s burgeoning digital asset industry.

New Crypto Regulation

On March 21, the Treasury Department said that crypto exchanges and custody services will now be classified under similar rules as other financial services in the country.

“Our legislative reforms will extend existing financial services laws to key digital asset platforms, but not to all of the digital asset ecosystem,” the Treasury said in a statement.

The rules impose similar regulations as other financial services in the country, such as obtaining a financial license, meeting minimum capital requirements, and safeguarding customer assets.

The proposal comes as Australian Prime Minister Anthony Albanese’s center-left Labor government prepares for a federal election on May 17.

Australia’s opposition party, led by Peter Dutton, has also vowed to make crypto regulation a top priority of the government’s agenda if it wins.

Australia’s Crypto Growth

Triple-A data shows that 9.6% of Australians already own digital assets, with some experts believing new rules will push further adoption.

Europe’s largest crypto exchange, WhiteBIT, announced it was entering the Australian market on Wednesday, March 26.

The company said that Australia was “an attractive landscape for crypto businesses” despite its complexity.

In March, Australia’s Swyftx announced it was acquiring New Zealand’s largest cryptocurrency exchange for an undisclosed sum.

According to the parties, the merger will create the second-largest platform in Australia by trading volume.

“Australia’s new regulatory framework is akin to rolling out the welcome mat for cryptocurrency exchanges,” Alexander Jader, professor of Digital Business at the Open Institute of Technology, told CCN.

“The clarity provided by these regulations is set to attract a wave of new entrants,” he added.

Jader said regulatory clarity was “the lifeblood of innovation.” He added that the new laws can expect an uptick “in both local and international exchanges looking to establish a foothold in the market.”

However, Zoe Wyatt, partner and head of Web3 and Disruptive Technology at Andersen LLP, believes that while the new rules will benefit more extensive exchanges looking for more precise guidelines, they will not “suddenly turn Australia into a global crypto hub.”

“The Web3 community is still largely looking to the U.S. in anticipation of a more crypto-friendly stance from the Trump administration,” Wyatt added.

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