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An intelligent credit card fraud detection approach based on semantic fusion of two classifiers

  • Saad M. DarwishEmail author
Methodologies and Application
  • 15 Downloads

Abstract

The increased usage of credit cards for online and regular purchases in E-banking communication systems is vulnerable to credit card fraud. Data imbalance also poses a huge challenge in the fraud detection process. The efficiency of the current fraud detection system (FDS) is in question only because they detect the fraudulent activity after the suspicious transaction is done. This paper proposes an intelligent two-level credit card fraud detection model from highly imbalanced datasets, relying on the semantic fusion of k-means and artificial bee colony algorithm (ABC) to enhance the classification accuracy and speed up detection convergence. ABC as a second classification level performs a kind of neighborhood search combined with the global search to handle the inability the k-means classifier to discover the real cluster if the same data is inputted in a different order it may produce different cluster. Besides, the k-means classifier may be surrounded by the local optimum as it is sensitive to the initial condition. The advised system filters the dataset’ features using a built-in rule engine to analyze whether the transaction is genuine or fraudulent based on many customer behavior (profile) parameters such geographical locations, usage frequency, and book balance. Experimental results indicate that the proposed model can enhance the classification accuracy against the risk coming from suspicious transactions, and gives higher accuracy compared to traditional methods.

Keywords

Online fraud detection Optimization algorithm Multi-level classification E-banking 

Notes

Compliance with ethical standards

Conflicts of interest

The first author declares that he has no conflict of interest. The second author declares that he has no conflict of interest.

Research involving human participants and/or animals

This article does not contain any studies with human participants or animals performed by any of the authors.

Informed consent

There are no studies with human participants.

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Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Institute of Graduate Studies and ResearchAlexandria University, EgyptAlexandriaEgypt

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