Online transaction fraud detection is one of the essential for maintaining the integrity of e-commerce and digital financial services. Machine Learning and data analysis can play an important role in identifying patterns indicative of fraudulent events. We provide technical and theoretical insights to scholars for their research ideas. Get the best thesis ideas from our end and achieve a high rank in all your research work. Here we have given a step-by-step guidance how we set up an online transaction fraud detection project by utilizing python.
- Define the Objective:
- To detect fraudulent transactions between a set of online transactions, goals to decrease false positives and false negatives.
- Data Collection:
- Existing Datasets: We have to gather the datasets like “Credit Card Fraud Detection” present on kaggle can be an initial point.
- Collaboration: Our work involves with financial institutions or e-commerce platform to get a transaction data. We make sure that data privacy and regulatory compliance.
- Data Preprocessing:
- In our work we handle some missing values.
- Encode categorical variables (e.g., utilizing one-hot encoding).
- Numerical features are normalized or standardized by us.
- Address class imbalance (fraudulent transactions are normally outnumbered by real ones) by utilizing the methods like over sampling, undersampling, or synthetic data generation (e.g., utilizing SMOTE).
- Feature Engineering:
- Time Based features: Time when the last transaction, activity frequency, etc.
- Aggregate features: Our work can have the average transaction value in the past X days, Number of transactions in the past X days, etc.
- Behavioral patterns: Convert from usual transaction behavior, unusual time of activity, etc.
- Exploratory Data Analysis (EDA):
- We utilize the python library functions like Pandas, Matplotlib and Seaborn to visualize the data distributions, correlations and patterns.
- Model Selection and Training:
- Dividing the data into train and test sets we preferably utilize the stratified sampling due to the class imbalance.
- Test multiple methods:
- Logistic Regression
- Decision Tress and Random Forests
- Gradient Boosting Machines (e.g., XGBoost, LightGBM)
- Neural Networks
- Anomaly detection methods (Isolation Forest, One-Class SVM)
- By utilizing python libraries like Scikit-learn, Tensor Flow, and PyTorch, we construct our model and carried out the training process.
- Due to class imbalance, avoid trusting only on accuracy. Utilizing precision, recall, F1-score, ROC-AUC, and the confusion matrix as metrics.
- Through the sklearn.metrics module in Scikit-learn, we can compute these metrics easily.
- Model Deployment:
- Flask or FastAPI are the tools we used to generate a web service for real-time fraud detection.
- We have to serialize the trained model by utilizing libraries like Pickle or Joblib.
- To integrate the organized model with the transaction system we have to analyze and flag suspicious transactions in real-time.
- Monitoring and Feedback Loop:
- Our work monitors the models prediction constantly. When the false predictions are recognized then we feed the data back into the system to enhance and retrain the model.
- Dynamic Behavior: Fraud outlines can grow, to make it necessary to retain the model frequently.
- Data privacy: As the transaction data is complex. We make sure that data encryption, anonymization and compliance through privacy regulation.
- False Positives: Regularly estimate and modify the model’s threshold to decrease the inconvenience caused to genuine users.
- User Profiling: For best finding deviations indicative of fraud our work generates the behavioral profile of users.
- Multi-factor Authentication: When the transaction is flagged as suspicious, trigger multi-factor authentication can be utilized to confirm the user’s identity.
We remember to keep in touch with field experts and update our team constantly, as their understanding on fraud patterns and transaction behaviors that can be precious in fine-tuning the method and its system.
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ONLINE TRANSACTION FRAUD DETECTION PROJECT TOPICS
- Unsupervised Fraud Transaction Detection on Dynamic Attributed Networks
Unsupervised Anomaly Detection, Graph Neural Networks, Density Estimation
A new TSAGMM is suggested in this article for unsupervised fraud transaction detection on dynamic attributed networks. Time-encoded graph autoencoder is recommended to use topological architecture and temporal data within the dynamic transaction graph to rebuild the node attributes and graph topology. For unsupervised fraud detection, learnt latent representations and rebuilt faults are integrated and fed into a density related framework.
- Enhancing the Credit Card Fraud Detection Using Decision Tree and Adaptive Boosting Techniques
Machine Learning, Synthetic Minority Oversampling Technique, Decision Tree, Adaptive Boosting, Support Vector Machine
The major goal of this paper is to detect fraud transactions by utilizing various ML approaches like Decision Tree & Adaptive Boosting. To balance the imbalanced dataset, Synthetic Minority Oversampling Technique (SMOTE) is employed in this study. To enhance the effectiveness of binary classification, Decision tree algorithm is deployed with Adaptive Boosting method.
- A Conceptual Model for Click Fraud Detection and Prevention in Online Advertising Using Blockchain
Online advertising, Click fraud detection and prevention, Hash function, Blockchain
An efficient model for detection and prevention of click fraud by using blockchain is proposed in this article. To differentiate genuine and fraud clicks, ad clicks are validated by considering users’ mail id with mobile number and NIV value which is not similar for all users. By doing so, genuine and fraud clicks are filtered and stored as a transaction in blockchain. The confidentiality of data is preserved by sharing hashed data by employing SHA256 hash function.
- Fraud Detection in Mobile Banking Based on Artificial Intelligence
Mobile Banking, K-means, Data Mining, Clustering
This paper describes about the effective deployment of AI based data mining techniques for fraud detection in mobile banking transactions. The ultimate goal of this paper is to provide an efficient, cost effective and precise data mining related model for fraud detection in mobile banking. We suggested an AI framework by utilizing K-Means clustering and Anomaly detection method to detect fraudulent and genuine transactions in an actual time.
- Ensemble Learning Based Social Engineering Fraud Detection Module for Cryptocurrency Transactions
Ensemble Learning, XGBoost, AdaBoost, Logistic Regression, proof of work consensus, Ethereum, Cryptography, Fraud Detection, Social Engineering Attacks
This article evaluates several neural network, ensemble learning and ML techniques to detect fraud and finds out the better decision making technique. It is analyzed that, Adaptive Boosting (AdaBoost) method achieves better results than other methods. An application that is created for cryptocurrency transactions is combined with fraud detection model. Fraud detection model interferes and notifies the user before a new transaction is allotted to blockchain.
- Developing AI-based Fraud Detection Systems for Banking and Finance
Finance, Artificial intelligence
A comprehensive evaluation of current ML techniques such as neural networks that is compared with many traditional methods such as logistic regression and decision trees is proposed in this research. A result shows that, neural networks outperform other traditional methods. Further, our research prioritizes the importance of data collection and process of fraud detection framework.
- IoT Device Security for Smart Card Fraud Detection for Credit Cards
Credit card fraud, IOT device, NFC Chip
Various approaches are proposed in this paper to categorize the connections as fraudulent or genuine credit cards. NFC technology is suitable for user re-authentication that is combined with IoT for double transaction validation to minimize the fraudulent transactions. In this study, methodologies such as Random Forest, Bayesian Network, and Multilayer Perception are utilized and also comprise feature selection and dataset division procedures.
- Medical Insurance Fraud Detection Based on Block Chain and Deep Learning Approach
Medical Insurance, Deep Learning
A framework for fraud detection in health insurance is suggested in this study that integrated blockchain and deep learning methods. Medical records are automatically analyzed to ensure about the implementation of single disease payment and also minimize the burden of medical insurance workers. We suggested a consortium blockchain to store and maintain records to ensure about the information’s confidentiality and safety.
- An effective fraud detection using competitive swarm optimization based deep neural network
Fraud activity, Optimization, Classification, Online transaction
The aim of this paper is to build a deep convolutional neural network method to identify anomalies from regular patterns generated by competitive swarm optimization, with a specific importance on fraud scenarios that cannot be detected using previous datas or supervised learning (CSO). The proposed method CSO-DCNN is an unsupervised learning approach that categorized the fraudulent actions using actual time and other datasets.
- LGM-GNN: A Local and Global Aware Memory-Based Graph Neural Network for Fraud Detection
A local and global aware memory related to graph neural network (LGM-GNN) is suggested for fraud detection. Relation-aware embedding is utilized to obtain preliminary node embedding and to combine and utilize the local and global information, the local and global memory network are integrated. By using hierarchical information aggregator, the node embedding at various levels are integrated. As a result, LGM-GNN provides better end results.