We present a data mining approach for profiling bank clients in order to support the process of detection of anti-money laundering operations. We first present the overall system architecture, and then focus on the relevant component for this paper. We detail the experiments performed on real world data from a financial institution, which allowed us to group clients in clusters and then generate a set of classification rules. We discuss the relevance of the founded client profiles and of the generated classification rules. According to the defined overall agent-based architecture, these rules will be incorporated in the knowledge base of the intelligent agents responsible for the signaling of suspicious transactions.
Considering the data transformation process, which was especially critical in our work, in @cite_6 , a discretization process was also applied to data set in order to find a more adequate set of clusters. Resources are mapped to n+2 dimensional Euclidean space, n being the customer’s attributes, one dimension for time and another for transactions. Customers’ transactions are projected according to time, accumulating transactions and its frequency to create a histogram. Clusters are created based on segments of the histogram. Analyses of local and global correlations are then applied to detect suspicious patterns. A good way to analyze individual behavior and or group behavior is to examine their operations to detect suspicious behaviors related to abnormal peaks on the histogram. However, when it is necessary to analyze a big number of clients and transactions over a long period of time, it may become difficult to detect suspicious cases, since there might be few peaks or none at all in the histogram.
@cite_6
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Suspicious transaction detection is used to report banking transactions that may be connected with criminal activities. Obviously, perpetrators of criminal acts strive to make the transactions as innocent-looking as possible. Because activities such as money laundering may involve complex organizational schemes, machine learning techniques based on individual transactions analysis may perform poorly when applied to suspicious transaction detection. In this paper, we propose a new machine learning method for mining transaction graphs. The method proposed in this paper builds a model of subgraphs that may contain suspicious transactions. The model used in our method is parametrized using fuzzy numbers which represent parameters of transactions and of the transaction subgraphs to be detected. Because money laundering may involve transferring money through a variable number of accounts the model representing transaction subgraphs is also parametrized with respect to some structural features. In contrast to some other graph mining methods in which graph isomorphisms are used to match data to the model, in our method we perform a fuzzy matching of graph structures. Statistical learning theory (SLT) is introduced to improve the embarrassments of anti-money laundering (AML) intelligence collection. A set of unusual behavior detection algorithm is presented in this paper based on support vector machine (SVM) in order to take the place of traditional predefined-rule suspicious transaction data filtering system. It could efficiently surmount the worst forms of suspicious data analyzing and reporting mechanism among bank branches including enormous data volume, dimensionality disorder with massive variances and feature overload. Existing database systems employ an transaction processing scheme---that is, upon receiving a transaction request, the system executes all the operations entailed in running the transaction (which typically includes reading database records, executing user-specified transaction logic, and logging updates and writes) before reporting to the client that the transaction has completed. We introduce a transaction execution engine, in which a transaction may be considered durably completed after only partial execution, while the bulk of its operations (notably all reads from the database and all execution of transaction logic) may be deferred until an arbitrary future time, such as when a user attempts to read some element of the transaction's write-set---all without modifying the semantics of the transaction or sacrificing ACID guarantees. Lazy transactions are processed deterministically, so that the final state of the database is guaranteed to be equivalent to what the state would have been had all transactions been executed eagerly. Our prototype of a lazy transaction execution engine improves temporal locality when executing related transactions, reduces peak provisioning requirements by deferring more non-urgent work until off-peak load times, and reduces contention footprint of concurrent transactions. However, we find that certain queries suffer increased latency, and therefore lazy database systems may not be appropriate for read-latency sensitive applications. We introduce a lazy transaction execution engine, in which a transaction may be considered durably completed after only partial execution, while the bulk of its operations (notably all reads from the database and all execution of transaction logic) may be deferred until an arbitrary future time, such as when a user attempts to read some element of the transaction's write-set---all without modifying the semantics of the transaction or sacrificing ACID guarantees. Lazy transactions are processed deterministically, so that the final state of the database is guaranteed to be equivalent to what the state would have been had all transactions been executed eagerly. Our prototype of a lazy transaction execution engine improves temporal locality when executing related transactions, reduces peak provisioning requirements by deferring more non-urgent work until off-peak load times, and reduces contention footprint of concurrent transactions. However, we find that certain queries suffer increased latency, and therefore lazy database systems may not be appropriate for read-latency sensitive applications. Despite all attempts to prevent fraud, it continues to be a major threat to industry and government. Traditionally, organizations have focused on fraud prevention rather than detection, to combat fraud. In this paper we present a role mining inspired approach to represent user behaviour in Enterprise Resource Planning (ERP) systems, primarily aimed at detecting opportunities to commit fraud or potentially suspicious activities. We have adapted an approach which uses set theory to create transaction profiles based on analysis of user activity records. Based on these transaction profiles, we propose a set of (1) anomaly types to detect potentially suspicious user behaviour, and (2) scenarios to identify inadequate segregation of duties in an ERP environment. In addition, we present two algorithms to construct a directed acyclic graph to represent relationships between transaction profiles. Experiments were conducted using a real dataset obtained from a teaching environment and a demonstration dataset, both using SAP R 3, presently the predominant ERP system. The results of this empirical research demonstrate the effectiveness of the proposed approach.