Addressing Imbalance Data for Online Fraud Detection

Nowadays, the emergence of online trading greatly facilitates people’s life. Meanwhile, online trading also brings hidden dangers, such as online fraudulent trading. To solve the issue, researchers have proposed many different detection models. However, in actual business scenarios, fraudulent transactions usually only account for a small portion of normal transactions, resulting in extremely imbalanced data; besides, the concealment of fraud is reflected in that the fraudsters are imitating the normal transactions of users, posing a huge challenge for fraudulent transaction detection modeling. Inspired by generative adversarial networks (GANs), we propose a GAN-based framework to detect online banking fraud on extremely imbalanced data, called BalanceGAN. A fraud detection model is first pre-trained using the data generated by the generator, and then the model is fine-tuned using transfer learning on real-world datasets, by using this approach to address data imbalances. Compared with the conventional methods for solving imbalanced data, our BalanceGAN can avoid overfitting of the model relatively, experiments on two real datasets show our BalanceGAN has more than 10% performance improvement in Precision and Recall.