Neural fraud detection in credit card operations
Year: 1997
Type: article
Abstract: This paper presents an online system for fraud detection of credit card operations based on a neural classifier. Since it is installed in a transactional hub for operation distribution, and not on a card-issuing institution, it acts solely on the information of the operation to be rated and of its immediate previous history, and not on historic databases of past cardholder activities. Among the main characteristics of credit card traffic are the great imbalance between proper and fraudulent operations, and a great degree of mixing between both. To ensure proper model construction, a nonlinear version of Fisher's discriminant analysis, which adequately separates a good proportion of fraudulent operations away from other closer to normal traffic, has been used. The system is fully operational and currently handles more than 12 million operations per year with very satisfactory results.
DOI: 10.1109/72.595879
Authors: J.R. Dorronsoro, F. Ginel, C. Sgnchez, C.S. Cruz
Language: English
Subfield: Artificial Intelligence
Field: Computer Science
Domain: Physical Sciences
Open Access status: green
OpenAlex ID: W2167374789