# Financial Transaction Risk Identification Method Based on Boosting-SVM Algorithm

Authors: Xiaoxiong Fang
Journal: Wireless Communications and Mobile Computing
 (2022)

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## Abstract

The development of the network economy has brought a great impact on the society. In the process of online transactions, if the transaction risks are not prevented and improved in time, it will directly affect the normal development of the social economy. Therefore, it is necessary to synchronize transaction subjects and objects, and at the same time control transaction risks, and promote the rapid development of e-commerce, which is an important problem to be solved urgently in current online transactions. This paper first summarizes the characteristics and risk performance of new transactions and identifies and controls them according to their characteristics and different risk characteristics. The cybercriminal industry uses illegal means to seek benefits in online transactions. The continuous improvement of big data technology and data mining technology makes it possible to identify transaction risks in the consumption process. In particular, the research and identification of black industries can not only ensure the normal operation of merchants and reduce the loss of economic interests of merchants but also make the transaction experience of natural users smoother. Based on the existing consumption data, this paper adopts the Boosting-SVM model to identify natural users and black-produced users in the transaction process. The results show that the model achieves good recognition results. The overall prediction accuracy of the model is over 95%, the identification accuracy rate of high-risk transactions is over 98%, and other indicators are also over 96%. Compared with other risk identification, the overall accuracy of the algorithm is increased by 1%, and the risk identification accuracy is increased by more than 8%. Generally speaking, the method in this paper provides technical support to related industries to a certain extent.


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## Body

## 1. Introduction

In recent years, with the continuous change and development of Internet technology, commercial trade has shifted from offline to online, and more and more people are accustomed to online consumption. As an emerging consumption mode, online consumption mostly relies on computer networks and modern information technology. Online transactions allow users and merchants to gain convenience, efficiency, and economic benefits, but at the same time, there are more and more online consumption loopholes, which lead to increased online transaction risks [1–3].As human beings enter the 21st century, the world has entered the era of informationization. Under the influence of the general trend, my country’s e-commerce is also developing by leaps and bounds [4–6]. According to the survey report of the National Bureau of Statistics, from January to March 2015, the sales of all online goods and services in China reached 760.7 billion yuan, a year-on-year increase of 41.300 yuan. Among them, online merchandise sales were 631 billion yuan, an increase of 41.000 yuan year-on-year, accounting for 8.900 percent of the total retail sales of social consumer goods; online service sales were 129.7 billion yuan, a year-on-year increase of 43.000 yuan [7–10]. Among the retail sales of online goods, food, clothing, and use goods increased by 51%, 33.7%, and 43.7%, respectively. These figures show that online trading has gradually become part of the main trading model. From these data, it is not difficult to see that the volume of online transactions has developed rapidly, which not only affects the overall composition of the business, but also makes more enterprises become an indispensable main force. However, with the popularization and application of online transactions in all walks of life, various transaction risks are accompanied. Moreover, such disputes are more complicated than traditional buying and selling due to the differences in the trading characteristics of the trading methods [11–14].Network black industry is a new type of transaction risk in the process of online consumption, which uses illegal means to seek benefits in Internet transactions. In the fields of e-commerce, takeaway, and travel, in order to attract customers to plan various types of marketing activities and subsidy activities, gangsters exploited loopholes in the rules of marketing activities or registered a large number of fake accounts to receive a large number of coupons, commonly known as “bed wool.” The black-producing gang is also vividly called the “wool party.” In recent years, black production has been characterized by gangs, regionalization, and specialization, which not only causes great loss of profits to the society and businesses but also affects the normal experience of natural users. For example, in December 2018, Starbucks launched the “Starbucks APP Registration Newcomer Gift” activity. The “wool party” took the opportunity to register a large number of fake accounts and receive coupons for the event, which led to Starbucks’ emergency offline event. Although the event only lasted one and a half days, Starbucks’ economic loss reached 10 million; at the beginning of 2019, the black and gray gang only used the rule loopholes to steal coupons worth tens of millions when there was no data security loophole in an application system [15–18].In recent years, the development and promotion of database technology has accumulated more and more data in the Internet consumption process, and behind the massive consumption data hides a lot of key data and effective information. The continuous improvement of big data technology and data mining technology can extract the effective features behind massive data, combined with machine learning methods, making it possible to identify transaction risks in the consumption process. In particular, the research and identification of illegal users can not only protect the normal operation of merchants and reduce the loss of economic interests of merchants but also make the transaction experience of natural users smoother. Data mining is the use of computer science, statistics, and other knowledge to extract valuable information from massive data to serve specific transaction risk identification. Due to the large amount of data and many data characteristic variables, data mining is particularly dependent on computer technology. In recent years, data mining technology has been used in all aspects of the Internet field, such as sales forecasting in various industries and transaction risk detection on e-commerce platforms [19–21].The black product user problem is a type of transaction risk detection. For this type of problem, its essence is the research on classification prediction. The traditional classification algorithm improves the accuracy of prediction by optimizing the cost of misclassified samples. Such samples are often classified as categories. In balancing the samples, the cost of misclassifying samples of different categories is the same; that is, the classification accuracy of samples of different categories is the same. However, in actual data sets, the problem of sample category imbalance is common. For example, a stable e-commerce platform has a number of natural users that far exceed the number of black-produced users. The imbalance between the number of natural users and the number of black-produced users will lead to different classification accuracy of the two categories. The cost of misclassifying samples of a few classes is less than the cost of misclassifying samples of multiple classes. And the problem of data imbalance gives the classifier the recognition accuracy of class samples which is lower than that of multiclass samples [22–25]. Forecasting brings great challenges. In the past transaction risk detection, the problem of sample imbalance has always been a difficult problem. The commonly used method is to sample the samples to make the imbalanced data close to balance. Different data sets may have different effects by applying different processing techniques.The essence of transaction risk identification is classification. Before the model is used, it is necessary to preprocess the data set and then use the training set to train the model, adjust parameters, etc. The selection of the classifier model is often based on statistical knowledge and machine learning model application experience. Determine a better model by constantly trying, comparing, and screening. With the development of big data technology, the problem of transaction risk identification has gradually shifted from theoretical policy research to the use of data mining technology to actively identify illegal users. Zhang Wenjun, Han Xiaolong, and others established a random forest model for balanced samples and used cross-validation and network search technology to find the parameters of the random forest model. Based on decision trees and random forest classifiers, Wei Kun, Li Xiang, and others classified the real transaction data of Taobao and constructed a model with a high classification accuracy. Chang Chunyan, Liu Guangcheng, and others established an XGBoost model based on SMOTE oversampling by performing One-hot coding on the characteristic variables for retail e-commerce transaction data. The disadvantage of the method is that the calculation time and the accuracy of the prediction result are improved. Xu Ming proposed the M-XGB-SMOTE algorithm to classify unbalanced e-commerce transaction data, and the model indicators are significantly better than other algorithms. Huang Kejie, Chen Junqing, Ye Zongrui, and others used the example of ICBC to explain how to avoid transaction risks through big data mining technology. The bank established more than 3,000 characteristic variables and used models such as neural networks to prevent transaction risks. Some scholars have also studied the problem of transaction risk identification in the financial field based on clustering unsupervised models [26–29]. Some work uses three platforms such as Facebook to register a group of accounts in batches, conducts data mining by recording their online behavior characteristics, analyzes related behaviors, uses random forests to classify users with high accuracy, and applies the model to Twitter in real business.In this work, I propose a transaction risk identification method combining SVM classifier and Boosting classifier, namely, SVM-Boosting classifier method. This method introduces the Boosting classifier into risk identification and uses the Boosting classifier to replace the SVM classifier for a small number of samples that are close to the optimal classification surface of SVM, so as to obtain high recognition rate and low time consumption. The SVM-Boosting classifier has a higher recognition rate than the SVM classifier, and the Boosting classifier is faster. This paper uses this method to solve the identification problem of transaction risk (requiring identification rate not less than 95%).Based on the financial transaction risk identification and evaluation model and theory, this paper focuses on how to apply the risk identification and improvement model and theory to the online transaction platform and build a complete and healthy online transaction environment to improve customer satisfaction. Therefore, this thesis is divided into five chapters; the main contents are as follows: The introduction of the first section mainly introduces the background of the thesis and the relevant research significance and focuses on how to identify the transaction risk. The second section summarizes the current characteristics and risk manifestations of online transactions. The third section describes how to identify and assess the risks of online transactions. The fourth section analyzes the performance of Boosting-SVM model in risk identification. The fifth section is the summary and prospect of the work.


## 2. Characteristics and Risk Analysis of Financial Transactions

### 2.1. The Overall Characteristics and Risks of the Transaction

The specific content of e-commerce can be interpreted from two aspects: one is electronic means, and the other is commercial activities. But what is a unified and clear definition of e-commerce? After consulting a large number of domestic and foreign materials and documents, and even looking for the actual definition of this field in some countries or organizations, it is actually impossible to get the actual definition of electronic commerce.The operation process of online transaction is actually the process of communicating and confirming all aspects of procurement details such as purchasing inquiry on the online trading platform when an enterprise is carrying out a specific business project and then carrying out the actual order purchasing process. The entire production process includes the process of delivering a product or completing a service. Generally speaking, the online transaction process is mainly divided into the preparation of the supplier before the online transaction platform; the buyer conducts business negotiation and confirmation with the merchant, issues a formal purchase order, and completes the payment in full within the specified time workflow. From the basic model of general electronic transaction shown in Figure1, it can be seen that the process of electronic transaction has its particularity compared with traditional transaction.Figure 1
General e-commerce workflow.Figure1 analyzes the e-commerce workflow in detail from all aspects and describes the e-commerce work with a flow chart. Suppliers’ preparations before going online on the online trading platform mainly include publishing correct and detailed product or service information on the online trading platform and doing a good job of buyers’ inquiries about commodities on the online trading platform or searching by keywords to a detailed keyword description of the product. The second is the identity authentication of the merchant. The merchant needs to use the principle of honesty and trustworthiness to legally authenticate their identity on the online trading platform, so that the buyer can timely understand the relevant information of the supplier in the process of online transaction. This information is to support the buyer which is necessary for making purchasing decisions. Therefore, supplier certification, whether it is a third-party online trading platform to complete the certification or the content of the supplier’s own online trading platform system is certified in advance by the relevant departments, is a very necessary prerequisite for preventing online trading risks. At the same time, the product information released by the supplier, no matter what kind of media asset platform, needs to ensure the legality and authenticity of the product information, not to confuse the buyer’s audiovisual, and damage the buyer’s right to know the authenticity of the product or service.


### 2.2. The Type of Risk of the Transaction

Behind the rapid development of e-commerce, there are actually a lot of online transaction risks. Identifying and controlling these online transaction risks is extremely meaningful to better promote the development of online transactions. Therefore, reclassify and recognize the risks of online transactions from the perspective of enterprises and have the level and ability to quickly and accurately identify risks in the process of online transactions, and propose three main strategies to effectively improve governance for the identified risks set, and the risk can be defined.(1)Irisk=0,level<threshold,1,level³threshold.In the process of online trading, it is necessary to identify the risk performance factors of the trading entity, in order to fundamentally realize which risks must be improved in business. It is necessary to promote mutual trust between the subjects of online transactions and avoid the trust crisis caused by the characteristics of the business scenarios that the transaction subjects of the online transaction mode trade on the Internet fail to communicate face-to-face and rely entirely on the online trading platform, resulting transaction risks. The risks of transaction entities are formulated from the aspects of personalized business, transaction process quality, interaction unrelated to transactions, information, and security, so that transaction entities can conduct online transactions fairly and justly under the protection of the credit system.(2)ρ=EX1Y1‐EX1EY1EX12−EX12EY12−EY12,(3)riskX,Y=n∑xiyi−∑xi∑yin∑xi2−∑xi2n∑yi2−∑yi2.As shown in Figure2, the risks of online transactions will be manifested in the following aspects due to the particularity of the transaction subject and the transaction environment:Figure 2
Manifestations of trading risk.The risks of online transactions are mainly reflected in whether the individualized customer needs can be met in time, whether the product quality and service quality in the online transaction process can meet the requirements of customers and industry standards, the degree of understanding of customers’ consumption habits, and the quality of information transmission timeliness, effectiveness and openness, security of business and customer information, and security of payment methods.(4)Q=factorrisk1∗percentpro−factorrisk2∗0.78weighted∗R.


### 2.3. Characteristics and Risks of Trading Models

The mode of business transactions, the theory that can be explained at present, is mainly based on the summary definition of Goldman Sachs and Morgan Stanley: both parties involved in online transactions are enterprises, and the main feature of the performance is that the number of orders is large, and the average order amount is more than 7,500 US dollars. At the same time, both parties need to conduct the transaction through business negotiation and in accordance with the negotiated fixed contract terms and business rules. A typical Business to Business, as its name suggests, is the theory of the actual implementation of procurement between enterprises and credit integrity management and also covering logistics delivery, customs declaration and clearance, and other related key nodes. At the same time, this process also covers the front-end and back-end transaction links such as product configuration selection and financial account receipt. Regardless of whether the two parties in an online transaction choose an order with a large amount or a small amount, it is mainly in the form of a transaction completed on the Internet as a platform, and as long as one of the above-mentioned links is involved, for example, only one payment is made online. It can also be regarded as a B2B e-commerce transaction. Or the content of the entire transaction communication is completed online, and the rest are completed offline, which can also be regarded as a B2B e-commerce transaction.The main risk feature of the modern B2B online transaction model is that the first is that the amount of a single order is more than 7,500 US dollars. It can be said that it is a large-scale purchase of an enterprise on the Internet. The cooperation between them will be closer, and the diversity of payment options will promote a closer relationship with the bank and even develop to the docking between the two banks. It is different from the general transaction method of traditional paper orders and consensus reached through on-site communication. As long as the product is selected, the order is placed, and the communication process and the financial payment are all completed online, the overall efficiency of order fulfillment will be improved, which means that the overall process of corporate procurement can be completed in a short period of time, with high efficiency. However, if it is a long-distance transaction, face-to-face communication is not possible, and the selection of product configuration, payment, and delivery acceptance are not transparent and cannot be obtained in time by both parties, it will indeed lead to greater transaction risks for both parties than in general trade methods. If it is a cross-border transaction, it will be a business pain point that is more difficult to manage and control risks.(5)HWV=1dxy0u001dzyv0001dxzxy1.In the business scenario of the B2B e-commerce model, the risks are caused by the object environment such as network platform technology, laws and regulations, management level, and network and market environment. Corresponding to the risk factors of the above-mentioned underlying transactions, according to the characteristics of the risks, it can be concluded that the technical risks are mainly the risks caused by equipment problems in the network transaction environment. As the server itself, the risks caused by defects in the entire online transaction process also involve legal and regulatory risks in the transaction environment, such as imperfect laws and regulations in the business environment or illegal disclosure of transaction subject information, as well as product and protection of services, etc.(6)minY1=∑k∈V∑i∈C∑j∈CcijXijkminY2=∑k∈V∑j∈CX0jkThere are also risks brought about by insufficient grasp of the competitive environment in the industry as equation (6), such as the factors of the business environment of online transactions in different countries, which cause online transactions to be restricted or unable to proceed smoothly. The lack of management level will also lead to the risk of transactions. The management process and system of online transactions of their own enterprises have not been established, resulting in high risks of online transactions. If these risks caused by external environmental factors can be effectively identified and managed in advance through reasonable strategies, it can help to build an effective online trading platform and use a safe and efficient system to ensure the smooth progress of B2B online transactions.


## 2.1. The Overall Characteristics and Risks of the Transaction

The specific content of e-commerce can be interpreted from two aspects: one is electronic means, and the other is commercial activities. But what is a unified and clear definition of e-commerce? After consulting a large number of domestic and foreign materials and documents, and even looking for the actual definition of this field in some countries or organizations, it is actually impossible to get the actual definition of electronic commerce.The operation process of online transaction is actually the process of communicating and confirming all aspects of procurement details such as purchasing inquiry on the online trading platform when an enterprise is carrying out a specific business project and then carrying out the actual order purchasing process. The entire production process includes the process of delivering a product or completing a service. Generally speaking, the online transaction process is mainly divided into the preparation of the supplier before the online transaction platform; the buyer conducts business negotiation and confirmation with the merchant, issues a formal purchase order, and completes the payment in full within the specified time workflow. From the basic model of general electronic transaction shown in Figure1, it can be seen that the process of electronic transaction has its particularity compared with traditional transaction.Figure 1
General e-commerce workflow.Figure1 analyzes the e-commerce workflow in detail from all aspects and describes the e-commerce work with a flow chart. Suppliers’ preparations before going online on the online trading platform mainly include publishing correct and detailed product or service information on the online trading platform and doing a good job of buyers’ inquiries about commodities on the online trading platform or searching by keywords to a detailed keyword description of the product. The second is the identity authentication of the merchant. The merchant needs to use the principle of honesty and trustworthiness to legally authenticate their identity on the online trading platform, so that the buyer can timely understand the relevant information of the supplier in the process of online transaction. This information is to support the buyer which is necessary for making purchasing decisions. Therefore, supplier certification, whether it is a third-party online trading platform to complete the certification or the content of the supplier’s own online trading platform system is certified in advance by the relevant departments, is a very necessary prerequisite for preventing online trading risks. At the same time, the product information released by the supplier, no matter what kind of media asset platform, needs to ensure the legality and authenticity of the product information, not to confuse the buyer’s audiovisual, and damage the buyer’s right to know the authenticity of the product or service.


## 2.2. The Type of Risk of the Transaction

Behind the rapid development of e-commerce, there are actually a lot of online transaction risks. Identifying and controlling these online transaction risks is extremely meaningful to better promote the development of online transactions. Therefore, reclassify and recognize the risks of online transactions from the perspective of enterprises and have the level and ability to quickly and accurately identify risks in the process of online transactions, and propose three main strategies to effectively improve governance for the identified risks set, and the risk can be defined.(1)Irisk=0,level<threshold,1,level³threshold.In the process of online trading, it is necessary to identify the risk performance factors of the trading entity, in order to fundamentally realize which risks must be improved in business. It is necessary to promote mutual trust between the subjects of online transactions and avoid the trust crisis caused by the characteristics of the business scenarios that the transaction subjects of the online transaction mode trade on the Internet fail to communicate face-to-face and rely entirely on the online trading platform, resulting transaction risks. The risks of transaction entities are formulated from the aspects of personalized business, transaction process quality, interaction unrelated to transactions, information, and security, so that transaction entities can conduct online transactions fairly and justly under the protection of the credit system.(2)ρ=EX1Y1‐EX1EY1EX12−EX12EY12−EY12,(3)riskX,Y=n∑xiyi−∑xi∑yin∑xi2−∑xi2n∑yi2−∑yi2.As shown in Figure2, the risks of online transactions will be manifested in the following aspects due to the particularity of the transaction subject and the transaction environment:Figure 2
Manifestations of trading risk.The risks of online transactions are mainly reflected in whether the individualized customer needs can be met in time, whether the product quality and service quality in the online transaction process can meet the requirements of customers and industry standards, the degree of understanding of customers’ consumption habits, and the quality of information transmission timeliness, effectiveness and openness, security of business and customer information, and security of payment methods.(4)Q=factorrisk1∗percentpro−factorrisk2∗0.78weighted∗R.


## 2.3. Characteristics and Risks of Trading Models

The mode of business transactions, the theory that can be explained at present, is mainly based on the summary definition of Goldman Sachs and Morgan Stanley: both parties involved in online transactions are enterprises, and the main feature of the performance is that the number of orders is large, and the average order amount is more than 7,500 US dollars. At the same time, both parties need to conduct the transaction through business negotiation and in accordance with the negotiated fixed contract terms and business rules. A typical Business to Business, as its name suggests, is the theory of the actual implementation of procurement between enterprises and credit integrity management and also covering logistics delivery, customs declaration and clearance, and other related key nodes. At the same time, this process also covers the front-end and back-end transaction links such as product configuration selection and financial account receipt. Regardless of whether the two parties in an online transaction choose an order with a large amount or a small amount, it is mainly in the form of a transaction completed on the Internet as a platform, and as long as one of the above-mentioned links is involved, for example, only one payment is made online. It can also be regarded as a B2B e-commerce transaction. Or the content of the entire transaction communication is completed online, and the rest are completed offline, which can also be regarded as a B2B e-commerce transaction.The main risk feature of the modern B2B online transaction model is that the first is that the amount of a single order is more than 7,500 US dollars. It can be said that it is a large-scale purchase of an enterprise on the Internet. The cooperation between them will be closer, and the diversity of payment options will promote a closer relationship with the bank and even develop to the docking between the two banks. It is different from the general transaction method of traditional paper orders and consensus reached through on-site communication. As long as the product is selected, the order is placed, and the communication process and the financial payment are all completed online, the overall efficiency of order fulfillment will be improved, which means that the overall process of corporate procurement can be completed in a short period of time, with high efficiency. However, if it is a long-distance transaction, face-to-face communication is not possible, and the selection of product configuration, payment, and delivery acceptance are not transparent and cannot be obtained in time by both parties, it will indeed lead to greater transaction risks for both parties than in general trade methods. If it is a cross-border transaction, it will be a business pain point that is more difficult to manage and control risks.(5)HWV=1dxy0u001dzyv0001dxzxy1.In the business scenario of the B2B e-commerce model, the risks are caused by the object environment such as network platform technology, laws and regulations, management level, and network and market environment. Corresponding to the risk factors of the above-mentioned underlying transactions, according to the characteristics of the risks, it can be concluded that the technical risks are mainly the risks caused by equipment problems in the network transaction environment. As the server itself, the risks caused by defects in the entire online transaction process also involve legal and regulatory risks in the transaction environment, such as imperfect laws and regulations in the business environment or illegal disclosure of transaction subject information, as well as product and protection of services, etc.(6)minY1=∑k∈V∑i∈C∑j∈CcijXijkminY2=∑k∈V∑j∈CX0jkThere are also risks brought about by insufficient grasp of the competitive environment in the industry as equation (6), such as the factors of the business environment of online transactions in different countries, which cause online transactions to be restricted or unable to proceed smoothly. The lack of management level will also lead to the risk of transactions. The management process and system of online transactions of their own enterprises have not been established, resulting in high risks of online transactions. If these risks caused by external environmental factors can be effectively identified and managed in advance through reasonable strategies, it can help to build an effective online trading platform and use a safe and efficient system to ensure the smooth progress of B2B online transactions.


## 3. Analysis of the Current Situation of Financial Transaction Risk

### 3.1. Risk Identification Method

Because the participants in the B2C electronic transaction model are enterprises and general consumers, the main transaction risk is the phenomenon that the interests of both participants are damaged on the online trading platform. Moreover, it is much more complicated for individual consumers to come forward to defend their rights in online trading platforms than in traditional transactions. This is because the customer groups that mainly conduct online transactions are relatively complex. There are individuals, and in fact, there are also companies represented by individuals. The customer categories for all B2C online transactions are complex and not clear enough. For example, some scholars believe that the definition of B2B customer refers to individual consumers who purchase products or services, and individual consumers purchase goods and receive services for their own use, rather than resale.(7)min∑r=1pwrxrk+b(8)subjecttoyi∑r=1pwrxrj+b≥0(9)∑r=1mViyik=1,V≥0,u≥0,i=1,2,⋯,p;j=1,2,⋯,n;b≥0This is the biggest difference between the B2C electronic transaction mode and the B2B electronic transaction mode. Because the participants in the B2B electronic transaction model are between enterprises, both parties are for the purpose of profit. One of the participants in the B2C electronic transaction model is ordinary consumer who is not for profit. Therefore, the risk range of online transactions between the two is different. The risks of major transactions are reflected in the protection of consumer rights and interests. For example, the nine rights and interests of consumers can be faithfully protected. The “Consumer Rights Protection Law” must also protect consumers who trade online, and damage to rights and protection of rights and interests are the main risks of the B2C electronic transaction model, which is more difficult than in the traditional transaction model.(10)Gross_risk=aikoijβjkRjkexp−γkCijk.


### 3.2. Risk Identification

The identification of online transaction risks is an important process that composes online transaction risk analysis. Risk identification is the possible manifestation of the occurrence of risks in online transactions and what kind of risks will occur at what stage of online transactions. The risk identification process of online transactions is to identify risks before or during online transactions and conduct risk management in advance to ensure that the interests of both parties involved in online transactions will not be eroded by risks in online transactions. Risk identification is an important part of building, evaluating, and verifying the operation and control system of intranet online transactions. Risk identification has generated the driving force in promoting the diversification of online trading system functions, helping enterprises to promote more complete functions when building online trading system platforms, facilitating customers to settle online transactions more easily, and promoting the healthy development of online trading environment.The steps of online transaction risk identification, through the method and steps of online transaction risk identification, can grasp the risk problems brought by the main axis of business development in the complex online transaction environment, timely align the risk problems, and formulate the next risk improvement. The basic steps of strategy online trading risk identification are shown in Figure3.Figure 3
Risk identification step diagram.Online trading risk identification generally can be used in the following ways:


#### 3.2.1. Analysis of Risk Identification

By reading the materials related to online transaction risk identification and the actual environment of the actual online transaction, we can preliminarily find out the main cause of the risk, that is, the risk factor. Open and analyze the problems that lead to risks one by one, and combine the actual business scenarios to find out the causes of risks, locate the causes of risks, solve problems, and follow up the progress in a timely manner.(11)QSVi=1−m+m∗∑Vj∈InViwji∑vk∈OutVjwjkQSVj.


#### 3.2.2. Establish an Indicator System for Risk Identification

To identify the risks of online transactions, it is necessary to introduce appropriate and scientific identification methods or models to judge the risks. Whether these methods are effective should be judged through a scientific assessment index system.(12)di=‐∫XilnXiYidx.


#### 3.2.3. Risk Management Process

When the risk identification results of online transactions come out, a series of management methods need to be formulated to manage and control the upcoming risks. These management methods must be scientific and effective measures to solve problems. The control measures of online transaction risks mainly include two aspects, management measures and technical measures.(13)Hblack_product_user=‐∫01∫01Pi1,i2logPi1,i2di1di2.Analyze the current business status and future development strategic goals, and use the general process of risk identification to build the process system of each link to prevent the impact of potential future risks, so as to ensure the reasonable construction of the basic system for online transactions with customers.


## 3.1. Risk Identification Method

Because the participants in the B2C electronic transaction model are enterprises and general consumers, the main transaction risk is the phenomenon that the interests of both participants are damaged on the online trading platform. Moreover, it is much more complicated for individual consumers to come forward to defend their rights in online trading platforms than in traditional transactions. This is because the customer groups that mainly conduct online transactions are relatively complex. There are individuals, and in fact, there are also companies represented by individuals. The customer categories for all B2C online transactions are complex and not clear enough. For example, some scholars believe that the definition of B2B customer refers to individual consumers who purchase products or services, and individual consumers purchase goods and receive services for their own use, rather than resale.(7)min∑r=1pwrxrk+b(8)subjecttoyi∑r=1pwrxrj+b≥0(9)∑r=1mViyik=1,V≥0,u≥0,i=1,2,⋯,p;j=1,2,⋯,n;b≥0This is the biggest difference between the B2C electronic transaction mode and the B2B electronic transaction mode. Because the participants in the B2B electronic transaction model are between enterprises, both parties are for the purpose of profit. One of the participants in the B2C electronic transaction model is ordinary consumer who is not for profit. Therefore, the risk range of online transactions between the two is different. The risks of major transactions are reflected in the protection of consumer rights and interests. For example, the nine rights and interests of consumers can be faithfully protected. The “Consumer Rights Protection Law” must also protect consumers who trade online, and damage to rights and protection of rights and interests are the main risks of the B2C electronic transaction model, which is more difficult than in the traditional transaction model.(10)Gross_risk=aikoijβjkRjkexp−γkCijk.


## 3.2. Risk Identification

The identification of online transaction risks is an important process that composes online transaction risk analysis. Risk identification is the possible manifestation of the occurrence of risks in online transactions and what kind of risks will occur at what stage of online transactions. The risk identification process of online transactions is to identify risks before or during online transactions and conduct risk management in advance to ensure that the interests of both parties involved in online transactions will not be eroded by risks in online transactions. Risk identification is an important part of building, evaluating, and verifying the operation and control system of intranet online transactions. Risk identification has generated the driving force in promoting the diversification of online trading system functions, helping enterprises to promote more complete functions when building online trading system platforms, facilitating customers to settle online transactions more easily, and promoting the healthy development of online trading environment.The steps of online transaction risk identification, through the method and steps of online transaction risk identification, can grasp the risk problems brought by the main axis of business development in the complex online transaction environment, timely align the risk problems, and formulate the next risk improvement. The basic steps of strategy online trading risk identification are shown in Figure3.Figure 3
Risk identification step diagram.Online trading risk identification generally can be used in the following ways:


### 3.2.1. Analysis of Risk Identification

By reading the materials related to online transaction risk identification and the actual environment of the actual online transaction, we can preliminarily find out the main cause of the risk, that is, the risk factor. Open and analyze the problems that lead to risks one by one, and combine the actual business scenarios to find out the causes of risks, locate the causes of risks, solve problems, and follow up the progress in a timely manner.(11)QSVi=1−m+m∗∑Vj∈InViwji∑vk∈OutVjwjkQSVj.


### 3.2.2. Establish an Indicator System for Risk Identification

To identify the risks of online transactions, it is necessary to introduce appropriate and scientific identification methods or models to judge the risks. Whether these methods are effective should be judged through a scientific assessment index system.(12)di=‐∫XilnXiYidx.


### 3.2.3. Risk Management Process

When the risk identification results of online transactions come out, a series of management methods need to be formulated to manage and control the upcoming risks. These management methods must be scientific and effective measures to solve problems. The control measures of online transaction risks mainly include two aspects, management measures and technical measures.(13)Hblack_product_user=‐∫01∫01Pi1,i2logPi1,i2di1di2.Analyze the current business status and future development strategic goals, and use the general process of risk identification to build the process system of each link to prevent the impact of potential future risks, so as to ensure the reasonable construction of the basic system for online transactions with customers.


## 3.2.1. Analysis of Risk Identification

By reading the materials related to online transaction risk identification and the actual environment of the actual online transaction, we can preliminarily find out the main cause of the risk, that is, the risk factor. Open and analyze the problems that lead to risks one by one, and combine the actual business scenarios to find out the causes of risks, locate the causes of risks, solve problems, and follow up the progress in a timely manner.(11)QSVi=1−m+m∗∑Vj∈InViwji∑vk∈OutVjwjkQSVj.


## 3.2.2. Establish an Indicator System for Risk Identification

To identify the risks of online transactions, it is necessary to introduce appropriate and scientific identification methods or models to judge the risks. Whether these methods are effective should be judged through a scientific assessment index system.(12)di=‐∫XilnXiYidx.


## 3.2.3. Risk Management Process

When the risk identification results of online transactions come out, a series of management methods need to be formulated to manage and control the upcoming risks. These management methods must be scientific and effective measures to solve problems. The control measures of online transaction risks mainly include two aspects, management measures and technical measures.(13)Hblack_product_user=‐∫01∫01Pi1,i2logPi1,i2di1di2.Analyze the current business status and future development strategic goals, and use the general process of risk identification to build the process system of each link to prevent the impact of potential future risks, so as to ensure the reasonable construction of the basic system for online transactions with customers.


## 4. Risk Assessment Example

### 4.1. Holistic Approach to Risk Assessment

The risk evaluation system of online transaction entities explains the risk evaluation system of transaction clients while supplementing the risk evaluation system of transaction entities. Starting from the improvement of technical risk, legal risk, management risk, environmental risk, and other risks, improve the quality of risk improvement of online transaction objects, and solve the business pain points of online transaction overseas. As shown in Figure4, the risk assessment of online transactions requires in-depth analysis from technical, legal, management, environmental, and other aspects.Figure 4
Online trading risk assessment system.


### 4.2. Overall Analysis of Risk Identification

After the online transaction has been formally and legally confirmed, the purchaser will place a purchase order on the online transaction platform. Under normal circumstances, no matter which mode is used on the online transaction platform, the standard purchase order will be embedded into the online transaction system, provided that the standard purchase order has legal effect, and legal responsibility begins to arise once the purchase order is generated. Therefore, after the buyer confirms the purchase intention, he can fill in and submit the purchase order in the online transaction system according to the information required by the supplier as shown in the following formulas.(14)precision=predict_correct_risksall_predict_risk,(15)recall=predict_correct_risksall_real_risks,(16)Ft=2∗recall∗precisionrecall+precision.In commercial trade, online transactions take place when a supplier confirms that demand can be met. Otherwise, if the actual fulfilled order is inconsistent with the customer’s needs, it is necessary to complete the statement of rights and responsibilities according to the official online transaction order to solve the transaction risk. The risk prediction ability of various models is shown in Figure5.Figure 5
Summary of model results.As can be seen from Figure5, the direct use of transaction data to train the model, whether it is the random forest model or the LightGBM model, although the overall model accuracy reaches 80%, the recall value of the positive sample classification effect of the model is less than 60%; after using the oversampling algorithm balances the proportion of positive and negative samples of the data, the random forest and LightGBM are used to train the model. The overall accuracy of the model, accuracy value, AUC value, recall value, precision, and F1 score all reach more than 90%. After the data balance processing, the model classification effect is significantly better than the prediction effect of directly using unbalanced data modeling, and it can be seen that the direct modeling using unbalanced data has a great impact on the prediction effect of positive samples.As can be seen from Figure6, the overall prediction accuracy of the Boosting-SVM model is as high as 95%, the AUC value is 98%, and the F1_score value is 95%. All indicators are above 95%, and the model performance is relatively good. The platform accepts and feeds back the formal formation of the order. And according to the stipulations in the contract, the whole process of order fulfillment is arranged in a timely manner to ensure that orders are fulfilled in a timely manner according to customer needs. The buyer cannot change or cancel the order at will. If the demand is changed or canceled at will, it will cause the cost burden of the order demand that the supplier originally fulfilled. Therefore, if you need to change or cancel the order, you need to apply to the supplier on the online trading system, and after the acceptance, the contract requirements will be changed normally. The recognition performance with different C values is shown in Table 1.Figure 6
Boosting-SVM model results based on class imbalanced data.Table 1
Recognition performance with differentC values.
C
=
0.1
C
=
0.5
C
=
1
C
=
5
C
=
10
Identification_R (%)
94.5
95.5
95.9
96
95.7
Time (ms)
50.43
50.67
50.32
50.29
50.45By adjusting the value ofC, different combinations of recognition rates and time consumption can be obtained. The larger the value of C, the higher the recognition rate and the lower the recognition speed. On the contrary, the recognition rate decreases and the recognition speed increases. The test transaction samples are identified using the SVM-Boosting classifier, and Table 1 shows the identification performance for different C values. It can be seen that taking C=5 further reduces the time consumption under the condition that the recognition rate requirement is met.


## 4.1. Holistic Approach to Risk Assessment

The risk evaluation system of online transaction entities explains the risk evaluation system of transaction clients while supplementing the risk evaluation system of transaction entities. Starting from the improvement of technical risk, legal risk, management risk, environmental risk, and other risks, improve the quality of risk improvement of online transaction objects, and solve the business pain points of online transaction overseas. As shown in Figure4, the risk assessment of online transactions requires in-depth analysis from technical, legal, management, environmental, and other aspects.Figure 4
Online trading risk assessment system.


## 4.2. Overall Analysis of Risk Identification

After the online transaction has been formally and legally confirmed, the purchaser will place a purchase order on the online transaction platform. Under normal circumstances, no matter which mode is used on the online transaction platform, the standard purchase order will be embedded into the online transaction system, provided that the standard purchase order has legal effect, and legal responsibility begins to arise once the purchase order is generated. Therefore, after the buyer confirms the purchase intention, he can fill in and submit the purchase order in the online transaction system according to the information required by the supplier as shown in the following formulas.(14)precision=predict_correct_risksall_predict_risk,(15)recall=predict_correct_risksall_real_risks,(16)Ft=2∗recall∗precisionrecall+precision.In commercial trade, online transactions take place when a supplier confirms that demand can be met. Otherwise, if the actual fulfilled order is inconsistent with the customer’s needs, it is necessary to complete the statement of rights and responsibilities according to the official online transaction order to solve the transaction risk. The risk prediction ability of various models is shown in Figure5.Figure 5
Summary of model results.As can be seen from Figure5, the direct use of transaction data to train the model, whether it is the random forest model or the LightGBM model, although the overall model accuracy reaches 80%, the recall value of the positive sample classification effect of the model is less than 60%; after using the oversampling algorithm balances the proportion of positive and negative samples of the data, the random forest and LightGBM are used to train the model. The overall accuracy of the model, accuracy value, AUC value, recall value, precision, and F1 score all reach more than 90%. After the data balance processing, the model classification effect is significantly better than the prediction effect of directly using unbalanced data modeling, and it can be seen that the direct modeling using unbalanced data has a great impact on the prediction effect of positive samples.As can be seen from Figure6, the overall prediction accuracy of the Boosting-SVM model is as high as 95%, the AUC value is 98%, and the F1_score value is 95%. All indicators are above 95%, and the model performance is relatively good. The platform accepts and feeds back the formal formation of the order. And according to the stipulations in the contract, the whole process of order fulfillment is arranged in a timely manner to ensure that orders are fulfilled in a timely manner according to customer needs. The buyer cannot change or cancel the order at will. If the demand is changed or canceled at will, it will cause the cost burden of the order demand that the supplier originally fulfilled. Therefore, if you need to change or cancel the order, you need to apply to the supplier on the online trading system, and after the acceptance, the contract requirements will be changed normally. The recognition performance with different C values is shown in Table 1.Figure 6
Boosting-SVM model results based on class imbalanced data.Table 1
Recognition performance with differentC values.
C
=
0.1
C
=
0.5
C
=
1
C
=
5
C
=
10
Identification_R (%)
94.5
95.5
95.9
96
95.7
Time (ms)
50.43
50.67
50.32
50.29
50.45By adjusting the value ofC, different combinations of recognition rates and time consumption can be obtained. The larger the value of C, the higher the recognition rate and the lower the recognition speed. On the contrary, the recognition rate decreases and the recognition speed increases. The test transaction samples are identified using the SVM-Boosting classifier, and Table 1 shows the identification performance for different C values. It can be seen that taking C=5 further reduces the time consumption under the condition that the recognition rate requirement is met.


## 5. Conclusion

Transaction risk identification is to predict users by building a classifier, that is, using a suitable model to predict the probability that a certain user is a black user. The development of big data technology and data mining technology just conforms to this business requirement. This paper takes the identification of transaction risk as the main line, and based on the actual data needs, the problem of classification of unbalanced data and the problem of classification model selection are introduced. In this paper, the oversampling algorithm is used to solve the problem of unbalanced sample categories, and a classification model is constructed based on Boosting-SVM. The overall accuracy of the model prediction is over 97%, and the accuracy rate of minority samples is 99%. All other indicators are also within 95% or more, compared to training the model directly using class-imbalanced data, the overall accuracy of the model is improved by more than 1%, and the classification accuracy of negative samples is improved by more than 32%. In view of the imbalanced data sets of sample categories that commonly exist in real data, this kind of classification model construction idea has reference significance.The innovations of this paper are as follows: First, in terms of data preprocessing, this paper uses feature engineering to integrate a single feature of the original data and cross-combines multiple features to construct new features. Feature engineering makes the raw data readable, increases the interpretability of features, and also mines more user information, making the model’s classification better. Second, an oversampling classification model is established for class-imbalanced data, and the model is cross-validated by fivefold. It can be seen that the improved algorithm has excellent performance in the problem of transaction risk identification. There are still many deficiencies in this paper, and future research needs to focus on the following: First, this paper uses a desensitized data set. Although the desensitized data can reflect the real problem, it loses some important information of the user, and it is difficult to go deep into each feature variable to find its practical significance. Secondly, the solution proposed in this paper only considers the imbalance of sample category distribution, and in practical problems, there are often other problems. Specific to the issue of transaction risk identification, they are also black industry users, but they may come from different black industry gangs. At the same time, there is also the problem of intraclass imbalance in operation and trading habits. This is the direction that needs to be studied in the future.



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*Source: 4396250-2022-04-15.xml*