Friday, August 02, 2013

My Check Fraud Detection Model Reduces Fraud by 60%

A project manager from a bank just told me that the model developed by me has resulted in 60% reduction in fraud loss. He said "everyone was surprised at how effective it was." It was a model that I developed two years ago for a top 15 bank.(Of course, I was not surprised at all since the model was tested on holdout data sets and showed similar performance).

The model was built and deployed on Oracle databases. The main reason for the success of the model was that I spent huge amount of effort building model variables that captures the fraud patterns. Luckily, I used Oracle analytic functions to build those variables easily. (Please see my posts "How to build predictive models that win competitions" and "Recency, Frequency, Monetary (RFM) Analysis: Part 1"

Another important advantage of using an uniform platform, i.e., Oracle databases, is that the deployment is easy. I simply deployed the model as a set of SQL query. See my posts "Build Predictive Models Using PL/SQL" and "Logistic Regression Model Implemented in SQL"

1 comment:

Deepesh "DJ" said...


Reducing frauds by 60% is a remarkable feat. Congratulations!!!

I am keen to know the details of the model that you developed for fraud mitigation. Request you to share the details and documentation in an apporpriate format so that I can study that in detail annd quench my eagerness.

Thanks in advance for your help.