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Intelligent Financial Fraud Detection Practices: An Investigation

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International Conference on Security and Privacy in Communication Networks (SecureComm 2014)

Abstract

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.

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Authors and Affiliations

  1. School of Computing and Mathematics, Charles Sturt University, Bathurst, Australia

    Jarrod West, Maumita Bhattacharya & Rafiqul Islam

Authors
  1. Jarrod West
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  2. Maumita Bhattacharya
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  3. Rafiqul Islam
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Corresponding author

Correspondence to Maumita Bhattacharya .

Editor information

Editors and Affiliations

  1. CAS, Institute of Information Engineering, Beijing, China

    Jin Tian

  2. Institute of Information Engineering, Beijing, China

    Jiwu Jing

  3. IBM Thomas J. Watson Research Center, New York, New York, USA

    Mudhakar Srivatsa

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© 2015 Institute for Computer Sciences, Social Informatics and Telecommunications Engineering

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West, J., Bhattacharya, M., Islam, R. (2015). Intelligent Financial Fraud Detection Practices: An Investigation. In: Tian, J., Jing, J., Srivatsa, M. (eds) International Conference on Security and Privacy in Communication Networks. SecureComm 2014. Lecture Notes of the Institute for Computer Sciences, Social Informatics and Telecommunications Engineering, vol 153. Springer, Cham. https://doi.org/10.1007/978-3-319-23802-9_16

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  • DOI: https://doi.org/10.1007/978-3-319-23802-9_16

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  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-319-23801-2

  • Online ISBN: 978-3-319-23802-9

  • eBook Packages: Computer ScienceComputer Science (R0)

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