See how financial services, banking and retail are using graph-enhanced machine learning to thwart fraud. Fraudsters are becoming increasingly sophisticated, organized and adaptive; traditional, rule-based solutions are not broad or nimble enough to deal with this reality. This session will cover several demonstrations and real-world technical examples including preventing credit card fraud, identifying money laundering and reducing false positives.
2. Who We Are
GRAHAM GANSSLE - Ph.D., P.G.
Data Science Lead, Expero
Graham.Ganssle@experoinc.com
Deep learning expert
Financial analytics specialist
NAV MATHUR
Sr. Director - Global Solutions, Neo4j
nav@neo4j.com
@nav_mathur
3. Agenda
• Who are Today’s Fraudsters
• How to Fight Fraud Rings with Graphs
• Different Types of Credit Card Fraud & Neo4j Demo
• How Neo4j Fits in a Typical Architecture
• Summary
• Q&A
16. Finds the optimal
path or evaluates
route availability and
quality
Evaluates how a
group is clustered
or partitioned
Determines the
importance of distinct
nodes in the network
17. How Neo4j Differentiates from other Databases
Visualization
Queries
Processing
Storage
Non-Native Graph DBNative Graph DB RDBMS
Optimized for graph workloads
18. 1
2
3
4
5
6
Key Neo4j Architecture Components
Index-Free Adjacency
In memory and on flash/disk
vs
ACID Foundation
Required for safe writes
Full-Stack Clustering
Causal consistency
Language, Drivers, Tooling
Developer Experience,
Graph Efficiency, Type Safety
Graph Engine
Cost-Based Optimizer, Graph
Statistics, Cypher Runtime
Hardware Optimizations
For next-gen infrastructure
22. 22
Endpoint-Centri
c
Analysis of users and
their end-points
1
. Navigation
Centric
Analysis of navigation
behavior and suspect
patterns
2
.
Account-Centric
Analysis of anomaly
behavior by channel
3
.
PC:s
Mobile Phones
IP-addresses
User ID:s
Comparing Transaction
Identity Vetting
Traditional Fraud Detection Methods
23. 23
INVESTIGATE
Revolving Debt
Number of Accounts
INVESTIGATE
Normal behavior
Fraud Detection with Discrete Analysis
Unable to detect
• Fraud rings
• Fake IP-adresses
• Hijacked devices
• Synthetic Identities
• Stolen Identities
• And more…
Weaknesses
24. 24
Revolving Debt
Number of Accounts
Normal behavior
Fraudulent pattern
Fraud Detection with Connected Analysis
25. 25
CONNECTED ANALYSIS
Endpoint-Centri
c
Analysis of users and
their end-points
Navigation
Centric
Analysis of navigation
behavior and suspect
patterns
Account-Centric
Analysis of anomaly
behavior by channel
DISCRETE ANALYSIS
1
.
2
.
3
.
Cross Channel
Analysis of anomaly
behavior correlated
across channels
4
.
Entity Linking
Analysis of relationships
to detect organized crime
and collusion
5
.
Augmented Fraud Detection
28. 28
ACCOUNT
HOLDER 2
ACCOUNT
HOLDER 1
ACCOUNT
HOLDER 3
CREDIT
CARD
BANK
ACCOUNT
BANK
ACCOUNT
BANK
ACCOUNT
ADDRESS
PHONE
NUMBER
PHONE
NUMBER
SSN 2
UNSECURED
LOAN
SSN 2
UNSECURED
LOAN
Modeling a fraud ring as a graph
29. Ring-Based Fraud Classification
● You can’t use standard deep
learning techniques to learn
about rings
● Let’s leverage the power of graph
to do this
● The above case does consider
spatial relationships of entities to
one another, but the following
case does so for multiple entities
simultaneously
30. Graph Topology Metrics
Measures for detecting ring-based fraud:
● Connectedness
● Degree
● Betweenness
● Node count
● Edge count
● Eigenvalues
● Centrality
● Clique size
● Diameter
● Triangles
● Page rank
● Closeness
● Community value
● Ave clustering coef
● Min edge dom set size
● Max edge independent set size
● Deg associativity coef
● Deg assortativity coef
● Betweenness centrality sum
● closeness centrality sum
● Eigenvector centrality
Is this group of businesses
actually a money
laundering ring?
31. Deep Neural Network Analysis - Network
Topology Fraud AnalysisConnectedness
Degree
Betweenness
Node count
Edge count
Eigenvalues
Centrality
Clique size
Diameter
Triangles
Page rank
Closeness
Community value
Ave clustering coef
Min edge dom set size
financial ring metrics
deep neural network
Laundering / not
laundering
confidence
39. 39
Tx
Tx
$2000
Tx Tx
$25$10$4
TxTx Tx Tx TxTxTx
Computer
Store
John
Gas Station
Sheila Tx
$2
TxTxSheila TxTxTx Tx Tx TxTx
$3000
Tx
Jewelry
StoreTx
$3
40. 40
Tx
Tx
$2000
Tx Tx
$25$10$4
TxTx Tx Tx TxTxTx
Computer
Store
John
Gas Station
Sheila Tx
$2
TxTxSheila TxTxTx Tx Tx TxTx
$3000
Tx
Jewelry
StoreTx
$3
Robert TxTxTx Tx TxTx TxTxTx Tx Tx
41. 41
TxTx
$2
TxTx
Tx
$2000
Tx Tx
$25$10$4
TxTx Tx Tx TxTxTx
Computer
Store
John
Gas Station
Sheila
Robert
$3
Karen
TxTxTx Tx Tx TxTx
$3000
Tx
Jewelry
StoreTx
$3
TxTxTx Tx Tx TxTx TxTx
TxTx TxTx Tx Tx TxTx
$8 $12
Tx
$1500
Furniture
Store
Tx Tx Tx
42. Credit Card Fraud Classification
● $118 billion lost each year on
fraud false positives
● This is the reactive case. There’s a
predictive case, too. (we’ll get
there in a few slides)
● Scott talked in webinar #1 about
fraud analysis for individual
entities and organizational
entities. Here’s how we actually
do that stuff
44. Deep Neural Network Analysis - Embeddings Networks
44
embedded CC info
embedded CC info
deep convolutional neural network
deep neural network
fraud / not fraud
confidence
fraud / not fraud
confidence
45. Individual and Organizational Fraud Prediction
● We can combine the above
analysis to predict both individual
and organizational acts of fraud
using graph convolutional
networks
● This is a much more
sophisticated architecture which
(when applied to the right types
of problems) can dramatically
increase accuracy
51. 51
Money
Transferring
Purchases Bank
Services Relational
database
Data Lake
+ Good for Map Reduce
+ Good for Analytical Workloads
– No holistic view
– Non-operational workloads
– Weeks-to-months processes
Develop Patterns
Data
Science-team
Merchant
Data
Credit
Score
Data
Other 3rd
Party
Data
53. 53
Money
Transferring
Purchases Bank
Services
Neo4j powers
360° view of
transactions in
real-time
Neo4j
Cluster
SENSE
Transaction
stream
RESPOND
Alerts &
notification
LOAD RELEVANT
DATA
Relational
database
Data Lake
Visualization UI
Fine Tune Patterns
Develop Patterns
Data
Science-team
Merchant
Data
Credit
Score
Data
Other 3rd
Party
Data
Data-set used
to explore
new insights
54. 54
• Detect & prevent fraud in real-time
• Faster credit risk analysis and transactions
• Reduce chargebacks
• Quickly adapt to new methods of fraud
Why Neo4j? Who’s using it?
Financial institutions use Neo4j to:
FINANCE Government Online
Retail
56. Insight for Graph Methodology
DISCOVERY INVENTION REALIZATION
TRACK &
MEASURE
ONGOING
SUPPORT
PROOF OF CONCEPT PILOT TURN-KEY MVP
DEVELOPMENT
TECHNOLOGY LIFE CYCLE
ASSESSMENTS : DIAGNOSE & PRESCRIBE - DATA, ARCHITECTURE, CODE, USER EXPERIENCE (Any Stage)
SUPPORT -
EXPERT SERVICES
57. Playbook: What are the Next Steps?
Prototype
Pilot
Delivery
Data Loading
DSE Platform
Data Discovery
Craft Visualization
Key Business Functions
Build Rapid Pilot -
Prototype
Validate Business Case and Platform Technology
● Key Customer Functionality
● Graph Data Platform - Specifications
● Working Graph System
● Real Data Set
Business
Problem
Go LiveDevelopmentDiscovery & Requirements Testing
PLAY: Rapid Prototype
58. RAPID PILOT: See and Experience Your Data
Web UI
framework
React
Visualizations EXPERO GRAPH TOOLS +
(Open Source)
Graph
Platform
App Server (Generic Server)
Provisioning EXPERO GRAPH TOOLS
Ansible + Cloudburst
Compute
Cloud
AWS EC2
Data Sources CUSTOMER Data or (Synthetic Data)
59. 59
Join Us - Webinar Series
Thwart Fraud Using
Graph-Enhanced
ML & AI
You Are Here
Build Intelligent Fraud
Prevention with
ML and Graphs
Overview
Technical Aspects
Understand
Business Impact
Delivered
Available on Neo4j
YouTube Channel
Lock Down Funding for
Graph-Enhanced
Fraud Solutions
Get
Funding
Feb 20
9:00 PST / 12:00 EST
60. Thank You!
GRAHAM GANSSLE, Ph.D.
Data Science Lead, Expero
Graham.Ganssle@experoinc.com
@GrahamGanssle
Nav MATHUR
Sr. Director - Global Solutions, Neo4j
nav@neo4j.com
@nav_mathur
www.Neo4j.com
/use-cases/fraud-detection
info@neo4j.com
@neo4j
www.ExperoInc.com
/practices/ai
info@experoinc.com
@experoinc