From Conventional Methods to Contemporary Neural Network Approaches: Financial Fraud Detection

2021 ◽  
pp. 215-228
Author(s):  
Mustafa Reha Okur ◽  
Yasemin Zengin-Karaibrahimoglu ◽  
Dilvin Taşkın
Complexity ◽  
2020 ◽  
Vol 2020 ◽  
pp. 1-11
Author(s):  
Jian Liu ◽  
Xin Gu ◽  
Chao Shang

At present, there are more and more frauds in the financial field. The detection and prevention of financial frauds are of great significance for regulating and maintaining a reasonable financial order. Deep learning algorithms are widely used because of their high recognition rate, good robustness, and strong implementation. Therefore, in the context of e-commerce big data, this paper proposes a quantitative detection algorithm for financial fraud based on deep learning. First, the encoders are used to extract the features of the behaviour. At the same time, in order to reduce the computational complexity, the feature extraction is restricted to the space-time volume of the dense trajectory. Second, the neural network model is used to transform features into behavioural visual word representations, and feature fusion is performed using weighted correlation methods to improve feature classification capabilities. Finally, sparse reconstruction errors are used to judge and detect financial fraud. This method builds a deep neural network model with multiple hidden layers, learns the characteristic expression of the data, and fully depicts the rich internal information of the data, thereby improving the accuracy of financial fraud detection. Experimental results show that this method can effectively learn the essential characteristics of the data, and significantly improve the detection rate of fraud detection algorithms.


Author(s):  
Joy Iong-Zong Chen ◽  
Kong-Long Lai

With the exponential increase in the usage of the internet, numerous organisations, including the financial industry, have operationalized online services. The massive financial losses occur as a result of the global growth in financial fraud. Henceforth, devising advanced financial fraud detection systems can actively detect the risks such as illegal transactions and irregular attacks. Over the recent years, these issues are tackled to a larger extent by means of data mining and machine learning techniques. However, in terms of unknown attack pattern identification, big data analytics and speed computation, several improvements must be performed in these techniques. The Deep Convolution Neural Network (DCNN) scheme based financial fraud detection scheme using deep learning algorithm is proposed in this paper. When large volume of data is involved, the detection accuracy can be enhanced by using this technique. The existing machine learning models, auto-encoder model and other deep learning models are compared with the proposed model to evaluate the performance by using a real-time credit card fraud dataset. Over a time duration of 45 seconds, a detection accuracy of 99% has been obtained by using the proposed model as observed in the experimental results.


2020 ◽  
Vol 2020 ◽  
pp. 1-5 ◽  
Author(s):  
Sajjad Daliri

Financial fraud is among the main problems undermining the confidence of customers in addition to incurring economic losses to banks and financial institutions. In recent years, along with the proliferation of fraud, financial institutions began looking for ways to find a suitable solution in the fight against fraud. Given the advanced and varied changes in methods of fraud, extensive research has been conducted to detect fraud. In this paper, the Artificial Neural Network technique and Harmony Search Algorithm are used to detect fraud. In the proposed method, hidden patterns between normal and fraudulent customers’ information are searched. Given that fraudulent behavior could be detected and stopped before they take place, the results of the proposed system show that it has an acceptable capability in fraud detection.


2019 ◽  
Vol 11 (4) ◽  
pp. 86 ◽  
Author(s):  
César Pérez López ◽  
María Delgado Rodríguez ◽  
Sonia de Lucas Santos

The goal of the present research is to contribute to the detection of tax fraud concerning personal income tax returns (IRPF, in Spanish) filed in Spain, through the use of Machine Learning advanced predictive tools, by applying Multilayer Perceptron neural network (MLP) models. The possibilities springing from these techniques have been applied to a broad range of personal income return data supplied by the Institute of Fiscal Studies (IEF). The use of the neural networks enabled taxpayer segmentation as well as calculation of the probability concerning an individual taxpayer’s propensity to attempt to evade taxes. The results showed that the selected model has an efficiency rate of 84.3%, implying an improvement in relation to other models utilized in tax fraud detection. The proposal can be generalized to quantify an individual’s propensity to commit fraud with regards to other kinds of taxes. These models will support tax offices to help them arrive at the best decisions regarding action plans to combat tax fraud.


2021 ◽  
pp. 1-11
Author(s):  
Amita Nandal ◽  
Marija Blagojevic ◽  
Danijela Milosevic ◽  
Arvind Dhaka ◽  
Lakshmi Narayan Mishra

This paper proposes a deep learning framework for Covid-19 detection by using chest X-ray images. The proposed method first enhances the image by using fuzzy logic which improvises the pixel intensity and suppresses background noise. This improvement enhances the X-ray image quality which is generally not performed in conventional methods. The pre-processing image enhancement is achieved by modeling the fuzzy membership function in terms of intensity and noise threshold. After this enhancement we use a block based method which divides the image into smooth and detailed regions which forms a feature set for feature extraction. After feature extraction we insert a hashing layer after fully connected layer in the neural network. This hash layer is advantageous in terms of improving the overall accuracy by computing the feature distances effectively. We have used a regularization parameter which minimizes the feature distance between similar samples and maximizes the feature distance between dissimilar samples. Finally, classification is done for detection of Covid-19 infection. The simulation results present a comparison of proposed model with existing methods in terms of some well-known performance indices. Various performance metrics have been analysed such as Overall Accuracy, F-measure, specificity, sensitivity and kappa statistics with values 93.53%, 93.23%, 92.74%, 92.02% and 88.70% respectively for 20:80 training to testing sample ratios; 93.84%, 93.53%, 93.04%, 92.33%, and 91.01% respectively for 50:50 training to testing sample ratios; 95.68%, 95.37%, 94.87%, 94.14%, and 90.74% respectively for 80:20 training to testing sample ratios have been obtained using proposed method and it is observed that the results using proposed method are promising as compared to the conventional methods.


2003 ◽  
Vol 16 (3-4) ◽  
pp. 419-426 ◽  
Author(s):  
Robert J. Bullen ◽  
Dan Cornford ◽  
Ian T. Nabney

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