Intelligent Financial Fraud Detection Practices: An Investigation

Financial fraud is an issue with far reaching consequences in the finance industry, government, corporate sectors, and for ordinary consumers. Increasing dependence on new technologies such as cloud and mobile computing in recent years has compounded the problem. Traditional methods of detection involve extensive use of auditing, where a trained individual manually observes reports or transactions in an attempt to discover fraudulent behaviour. This method is not only time consuming, expensive and inaccurate, but in the age of big data it is also impractical. Not surprisingly, financial institutions have turned to automated processes using statistical and computational methods. This paper presents a comprehensive investigation on financial fraud detection practices using such data mining methods, with a particular focus on computational intelligence-based techniques. Classification of the practices based on key aspects such as detection algorithm used, fraud type investigated, and success rate have been covered. Issues and challenges associated with the current practices and potential future direction of research have also been identified.Comment: Proceedings of the 10th International Conference on Security and Privacy in Communication Networks (SecureComm 2014

Proceedings of the 2009 Joint Workshop of Fraunhofer IOSB and Institute for Anthropomatics, Vision and Fusion Laboratory

The joint workshop of the Fraunhofer Institute of Optronics, System Technologies and Image Exploitation IOSB, Karlsruhe, and the Vision and Fusion Laboratory (Institute for Anthropomatics, Karlsruhe Institute of Technology (KIT)), is organized annually since 2005 with the aim to report on the latest research and development findings of the doctoral students of both institutions. This book provides a collection of 16 technical reports on the research results presented on the 2009 workshop

Information theoretic approach to robust multi-Bernoulli sensor control

A novel sensor control solution is presented, formulated within a Multi-Bernoulli-based multi-target tracking framework. The proposed method is especially designed for the general multi-target tracking case, where no prior knowledge of the clutter distribution or the probability of detection profile are available. In an information theoretic approach, our method makes use of R\`{e}nyi divergence as the reward function to be maximized for finding the optimal sensor control command at each step. We devise a Monte Carlo sampling method for computation of the reward. Simulation results demonstrate successful performance of the proposed method in a challenging scenario involving five targets maneuvering in a relatively uncertain space with unknown distance-dependent clutter rate and probability of detection

The University Defence Research Collaboration In Signal Processing

This chapter describes the development of algorithms for automatic detection of anomalies from multi-dimensional, undersampled and incomplete datasets. The challenge in this work is to identify and classify behaviours as normal or abnormal, safe or threatening, from an irregular and often heterogeneous sensor network. Many defence and civilian applications can be modelled as complex networks of interconnected nodes with unknown or uncertain spatio-temporal relations. The behavior of such heterogeneous networks can exhibit dynamic properties, reflecting evolution in both network structure (new nodes appearing and existing nodes disappearing), as well as inter-node relations. The UDRC work has addressed not only the detection of anomalies, but also the identification of their nature and their statistical characteristics. Normal patterns and changes in behavior have been incorporated to provide an acceptable balance between true positive rate, false positive rate, performance and computational cost. Data quality measures have been used to ensure the models of normality are not corrupted by unreliable and ambiguous data. The context for the activity of each node in complex networks offers an even more efficient anomaly detection mechanism. This has allowed the development of efficient approaches which not only detect anomalies but which also go on to classify their behaviour

A Survey of Monte Carlo Tree Search Methods

Monte Carlo tree search (MCTS) is a recently proposed search method that combines the precision of tree search with the generality of random sampling. It has received considerable interest due to its spectacular success in the difficult problem of computer Go, but has also proved beneficial in a range of other domains. This paper is a survey of the literature to date, intended to provide a snapshot of the state of the art after the first five years of MCTS research. We outline the core algorithm's derivation, impart some structure on the many variations and enhancements that have been proposed, and summarize the results from the key game and nongame domains to which MCTS methods have been applied. A number of open research questions indicate that the field is ripe for future work

Probabilistic Human-Robot Information Fusion

This thesis is concerned with combining the perceptual abilities of mobile robots and human operators to execute tasks cooperatively. It is generally agreed that a synergy of human and robotic skills offers an opportunity to enhance the capabilities of today’s robotic systems, while also increasing their robustness and reliability. Systems which incorporate both human and robotic information sources have the potential to build complex world models, essential for both automated and human decision making. In this work, humans and robots are regarded as equal team members who interact and communicate on a peer-to-peer basis. Human-robot communication is addressed using probabilistic representations common in robotics. While communication can in general be bidirectional, this work focuses primarily on human-to-robot information flow. More specifically, the approach advocated in this thesis is to let robots fuse their sensor observations with observations obtained from human operators. While robotic perception is well-suited for lower level world descriptions such as geometric properties, humans are able to contribute perceptual information on higher abstraction levels. Human input is translated into the machine representation via Human Sensor Models. A common mathematical framework for humans and robots reinforces the notion of true peer-to-peer interaction. Human-robot information fusion is demonstrated in two application domains: (1) scalable information gathering, and (2) cooperative decision making. Scalable information gathering is experimentally demonstrated on a system comprised of a ground vehicle, an unmanned air vehicle, and two human operators in a natural environment. Information from humans and robots was fused in a fully decentralised manner to build a shared environment representation on multiple abstraction levels. Results are presented in the form of information exchange patterns, qualitatively demonstrating the benefits of human-robot information fusion. The second application domain adds decision making to the human-robot task. Rational decisions are made based on the robots’ current beliefs which are generated by fusing human and robotic observations. Since humans are considered a valuable resource in this context, operators are only queried for input when the expected benefit of an observation exceeds the cost of obtaining it. The system can be seen as adjusting its autonomy at run-time based on the uncertainty in the robots’ beliefs. A navigation task is used to demonstrate the adjustable autonomy system experimentally. Results from two experiments are reported: a quantitative evaluation of human-robot team effectiveness, and a user study to compare the system to classical teleoperation. Results show the superiority of the system with respect to performance, operator workload, and usability