CREDIT CARDS

A credit card is a valuable financial tool that enables

cardholders to make purchases on credit.
 TYPE OF CREDIT CARD
FRAUD
Electronic or CNP (Card
Application
Manual Credit Not Present)
fraud Card Fraud
Imprints

Lost and Mail Non-

Stolen Card Card ID Theft Receipt Card
Fraud Fraud
 What’s Machine Learning

Machine Learning is a type of Artificial Intelligence in which

computers are trained to recognize patterns within large data
sets and improve upon those patterns automatically without the
need for human intervention.
 The design of algorithms that discover patterns in a collection of
data instances in an automated manner
 The goal is to use the discovered patterns to make predictions
on new data
HOW TO DETECT FRAUD USING MACHINE
LEARNING?
 Fraud detection process using machine
learning

Provide Training Building Models

Extract Data
sets

Logistic Neutral
Decision Tree Random Forest
Regression Networks
 Logistic Regression
Statistical technique

Cause-and-effect relationships

Number of variables and size of the data sets

Authentic transactions are compared with the fraud

ones

Predictive power of individual variables

Decision Tree- A simple way to visualize a
decision
Tree like graph

Probability score Predictive

of fraud modeling tool

Constructed via
Set of rules an algorithmic
approach

Goal-Model that
predict
 A decision tree for the concept Play
Observation of Last 10 days
Badminton
 Random Forest
It uses a combination of
multiple decision trees to
improve the performance of the
classification or regression.
It allows us to smooth the
error which might exist in
a single tree.
Random forest runtimes are
quite fast, and they are able to
deal with unbalanced and
missing data.
Neural Networks
Machine Mimics

Completely Adaptive: legitimate

behavior

Identify pattern of fraud transactions

Fast and make decisions in real time