Credit Card Fraud Detection Model
Prateek Shah 1, Tanmay Sanjay Dod 2 , Pratik Mahesh Tapadiya 3 , Niyati Sohni 4
1Prateek Shah, Dept. of ENTC, JSPM’s JSCOE, Pune, Maharashtra, India
2Tanmay Sanjay Dod, Dept. of ENTC, JSPM’s JSCOE, Pune, Maharashtra, India
3Pratik Mahesh Tapadiya, Dept. of ENTC, JSPM’s JSCOE, Pune, Maharashtra, India
4Prof. Niyati Sohni, Dept. of ENTC, JSPM’s JSCOE, Pune, Maharashtra, India
Abstract: Credit card fraud presents a pressing challenge within the financial sector, posing considerable risks of monetary loss for both clients and financial institutions. Consequently, extensive research has been devoted to crafting robust fraud detection systems. These systems leverage an array of methodologies, including statistical analysis, machine learning algorithms, and deep learning models, to pinpoint suspicious transactions effectively. Rule-based systems are commonly employed for this purpose, utilizing predefined criteria to flag transactions exhibiting potential signs of fraudulence. However, these systems have inherent limitations, reliant on established rules and potentially unable to detect emerging fraud patterns.
To address these shortcomings, machine learning algorithms and statistical techniques have been harnessed for credit card fraud detection. These methods scrutinize transactional data—such as amount, location, and timing—alongside pertinent variables like the customer's transaction history and account particulars. A noteworthy example is a predictive model amalgamating Logistic Regression with rigorous evaluation metrics like accuracy, precision, and recall. These metrics furnish invaluable insights into the model's efficacy, ensuring its adeptness in accurately identifying fraudulent activities while minimizing false positives. Notably, this model has demonstrated promising outcomes by discerning patterns within data and refining fraud detection accuracy.
In summary, credit card fraud detection stands as a paramount domain of inquiry within the financial realm, offering substantial prospects for bolstering fraud detection capabilities and curtailing financial losses.
Keywords: Credit Card Fraud, Fraud Detection, Machine Learning Algorithm, Logistic Regression, Evaluation Metrics, Statistical Techniques
