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Fraud Detection

This case study highlights the integration of machine learning in fraud detection at a global bank, demonstrating significant improvements in accuracy and efficiency. Machine learning techniques, such as logistic regression and random forests, enhance detection rates and reduce false positives, leading to a 95% accuracy in fraud detection and a 40% reduction in false positives. The findings emphasize the critical role of modern technology in maintaining financial security and trust within banking institutions.

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6 views13 pages

Fraud Detection

This case study highlights the integration of machine learning in fraud detection at a global bank, demonstrating significant improvements in accuracy and efficiency. Machine learning techniques, such as logistic regression and random forests, enhance detection rates and reduce false positives, leading to a 95% accuracy in fraud detection and a 40% reduction in false positives. The findings emphasize the critical role of modern technology in maintaining financial security and trust within banking institutions.

Uploaded by

vishambars662
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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🔍 Fraud Detection

 Exploring Machine Learning's Impact in Banking


 Introduction
 This case study examines the integration of machine
learning in fraud detection at a global bank, highlighting
significant improvements in accuracy and efficiency.
01
🔍 Fraud
Detection
 Importance of
Fraud Detection
 Fraud detection is critical for financial
institutions to prevent losses and maintain
trust. Machine learning offers real-time
solutions that enhance detection rates and
reduce financial risk.
🛑 Challenges in
Traditional Methods
 Traditional fraud detection methods often struggle
with high false positive rates and slow response times.
Machine learning addresses these issues through
automated and adaptive algorithms, improving overall
efficiency.
💡Role of Machine
Learning
 Machine learning
algorithms enhance
fraud detection by
identifying patterns
and anomalies in
transaction data.
They improve
accuracy in detecting
suspicious activities
in real-time while
adapting to new
02
💡 Machine Learning
Methods
 Logistic Regression
Overview
 Logistic regression is a statistical method
used for binary classification, making it ideal
for fraud detection. It calculates the
probability that a transaction is fraudulent
based on various predictors, enabling banks
to flag high-risk transactions effectively.
 Random Forests
Explained
 Random forests are an ensemble learning technique
that builds multiple decision trees to improve
classification accuracy. This method is effective in
detecting fraud as it can handle large datasets and
complex interactions, reducing the risk of overfitting.
📝 Comparison of
Techniques
 Comparing logistic
regression and
random forests
reveals that while
logistic regression is
easier to interpret,
random forests
generally offer higher
accuracy and
robustness against
overfitting.
Understanding these
differences helps
📊 Dataset Features
✅ Transaction Details – ID, Timestamp, Amount, Merchant ID
✅ User Behavior – Cardholder ID, Transaction Frequency, Location
✅ Device & Network – IP Address, Device Type, Location Mismatch
✅ Fraud Label – (0: Legitimate, 1: Fraud)
• 🧠 ML Techniques Used:
🔹 Logistic Regression – For probability-based fraud detection
🔹 Random Forest – For high accuracy & pattern recognition
🔹 Real-Time Learning – Adaptive models to detect evolving fraud
• 💡 Outcome:
✔️95% Accuracy in Fraud Detection
✔️40% Reduction in False Positives
✔️Minimized Financial Losses
✅ Conclusions
 The implementation of machine learning algorithms
like logistic regression and random forests
significantly enhances fraud detection capabilities.
The global bank's case shows a marked improvement
in accuracy and reduction in fraudulent activities,
emphasizing the importance of modern technology in
financial security.
🙏 Thank you!
Do you have any questions?

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