A Novel Method of Fraud Detection of Credit Cards by Fuzzy, LSTM, and PSO Optimization

Since online shopping has become so popular, credit card theft has skyrocketed. This makes it hard to spot fake charges on accounts. In this research, credit card fraud detection is performed using a fuzzy database. It has been considered a data mining challenge to reliably identify whether or not a transaction is legitimate. This paper discusses the LSTM method and fuzzy logic. The learning process was sped up and made more precise by using a technique called particle swarm optimization (PSO). Performance values have been compared with those of the LSTM and fuzzy logic techniques, and a PSO-based neural network has been intensively trained by increasing the number of iterations and the population, or number of swarms. It has been shown that the PSO-based algorithm yields the best result for detecting fraudulent transactions. The goal of this method is to lower the mean square error (MSE) rate of the system. PSO is a popular optimization technique that can be used to locate the optimal set of features for the credit card fraud detection system. The proposed method PSO shows less mean squared error compared with Fuzzy and LSTM techniques

Show Me Your Claims and I\u27ll Tell You Your Offenses: Machine Learning-Based Decision Support for Fraud Detection on Medical Claim Data

Health insurance claim fraud is a serious issue for the healthcare industry as it drives up costs and inefficiency. Therefore, claim fraud must be effectively detected to provide economical and high-quality healthcare. In practice, however, fraud detection is mainly performed by domain experts resulting in significant cost and resource consumption. This paper presents a novel Convolutional Neural Network-based fraud detection approach that was developed, implemented, and evaluated on Medicare Part B records. The model aids manual fraud detection by classifying potential types of fraud, which can then be specifically analyzed. Our model is the first of its kind for Medicare data, yields an AUC of 0.7 for selected fraud types and provides an applicable method for medical claim fraud detection

Show Me Your Claims and I'll Tell You Your Offenses: Machine Learning-Based Decision Support for Fraud Detection on Medical Claim Data

Health insurance claim fraud is a serious issue for the healthcare industry as it drives up costs and inefficiency. Therefore, claim fraud must be effectively detected to provide economical and high-quality healthcare. In practice, however, fraud detection is mainly performed by domain experts resulting in significant cost and resource consumption. This paper presents a novel Convolutional Neural Network-based fraud detection approach that was developed, implemented, and evaluated on Medicare Part B records. The model aids manual fraud detection by classifying potential types of fraud, which can then be specifically analyzed. Our model is the first of its kind for Medicare data, yields an AUC of 0.7 for selected fraud types and provides an applicable method for medical claim fraud detection

Neural network algorithms for fraud detection: a comparison of the complementary techniques in the last five years

Purpose: The purpose of this research is to analyse the complementary updates and techniques in the optimization of the results of neural network algorithms (NNA) in order to detect financial fraud, providing a comparison of the trend, addressed field and efficiency of the models developed in current research. Design/Methodology/Approach: The author performed a qualitative study where a compilation and selection of literature was carried out, in terms of defining the conceptual analysis, database and search strategy, consequently selecting 32 documents. Subsequently, the comparative analysis was carried out, in turn being able to determine the most used and efficient complementary technique in the last five years. Findings: The results of the comparative analysis depicted that in 2019 there was a greater impact of research based on NNA with 11 studies. 27 complementary updates and techniques were identified related to NNA, where deep neural network algorithms (DNN), convolutional neural network (CNN) and SMOTE neural network. Finally, the evaluation of effectiveness in the collected techniques achieved an average accuracy ranging between 79% and 98.74% with an overall accuracy value of 91.32%. Originality/Value: Being a technique which is applied and compared in diverse studies, ANNs uses a wide range of mechanisms concerning training and classification of data. According to the findings of this research, the complementary techniques contribute to the progress and optimization of algorithms regarding financial fraud detection, having a high degree of effectiveness concerning on-line and credit card fraud

A perceptron based neural network data analytics architecture for the detection of fraud in credit card transactions in financial legacy systems

Credit card fraud, a significant and growing problem in commerce that costs the global economy billions of dollars each year, has kept up with technological advancements as criminals devise new and innovative methods to defraud account holders, merchants, and financial institutions. While traditional fraudulent methods involved card cloning, skimming, and counterfeiting during transactional processes, the rapid adoption and evolution of Internet technologies aimed at facilitating trade has given rise to new digitally initiated illegitimate transactions, with online credit card fraud beginning to outpace physical world transactions. According to the literature, the financial industry has used statistical methods and Artificial Intelligence (AI) to keep up with fraudulent card patterns, but there appears to be little effort to provide neural network architectures with proven results that can be adapted to financial legacy systems. The paper examines the feasibility and practicality of implementing a proof-of-concept Perceptron-based Artificial Neural Network (ANN) architecture that can be directly plugged into a legacy paradigm financial system platform that has been trained on specific fraudulent patterns. When using a credit checking subscription service, such a system could act as a backup

Використання технологій машинного навчання для протидії шахрайству в мережі оператора мобільного звʼязку

Мета використання технологій машинного навчання для протидії шахрайству в мережі оператора мобільного зв'язку є покращення безпеки та захисту користувачів, а також зниження впливу шахраївства на оператора мобільного зв'язку та його подальший розвитокОbjective of using machine learning technologies to counter fraud in the mobile network operator's network is to enhance security and protect users, as well as mitigate the impact of fraud on the mobile network operator and promote its further development

A new feature engineering framework for financial cyber fraud detection using machine learning and deep learning

As online payment system advances, the total losses via online banking in the United Kingdom have increased because fraudulent techniques have also progressed and used advanced technology. Using traditional fraud detection models with only raw transaction data cannot cope with the emerging new and innovative scheme to deceive financial institutions. Many studies published by both academic and commercial organisations introduce new fraud detection models using various machine learning algorithms, however, financial fraud losses via the online banking have been still increasing. This thesis looks at the holistic views of feature engineering for classification and machine learning (ML) and deep learning (DL) algorithms for fraud detection to understand their capabilities and how to deal with input data in each algorithm. And then, proposes a new feature engineering framework that can produce the most effective features set for any ML and DL algorithms by taking both methods of feature engineering and features selection into a new framework. The framework consists of two main components: feature creation and feature selection. The purpose of feature creation component is to create many effective feature candidates by feature aggregation and transformation based on customer’s behaviour. The purpose of feature selection is to evaluate all features and to drop irrelevant features and very high correlated features from the dataset. In the experiment, I proved the effect of using a new feature engineering framework by using a real-life banking transactional data provided by a private European bank and evaluating performances of the built fraud detection models in an appropriate way. Machine Learning and Deep learning models perform at their best when the created features set by the new framework are applied with higher scores in all evaluation metrics compared to the scores of the models built with the original dataset

A Model Based on Convolutional Neural Network for Online Transaction Fraud Detection

Using wireless mobile terminals has become the mainstream of Internet transactions, which can verify the identity of users by passwords, fingerprints, sounds, and images. However, once these identity data are stolen, traditional information security methods will not avoid online transaction fraud. The existing convolutional neural network model for fraud detection needs to generate many derivative features. This paper proposes a fraud detection model based on the convolutional neural network in the field of online transactions, which constructs an input feature sequencing layer that implements the reorganization of raw transaction features to form different convolutional patterns. Its significance is that different feature combinations entering the convolution kernel will produce different derivative features. The advantage of this model lies in taking low dimensional and nonderivative online transaction data as the input. The whole network consists of a feature sequencing layer, four convolutional layers and pooling layers, and a fully connected layer. Verifying with online transaction data from a commercial bank, the experimental results show that the model achieves excellent fraud detection performance without derivative features. And its precision can be stabilized at around 91% and recall can be stabilized at around 94%, which increased by 26% and 2%, respectively, comparing with the existing CNN for fraud detection