Fraud-Detection-How-Machine-Learning-Systems-Help-Reveal-Scams-in-Fintech-Healthcare-and-eCommerce

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Fraud Detection: How Machine Learning Systems Help Reveal Scamsin Fintech, Healthcare, and eCommerce4.4 Neural Networks and Deep Neural NetworksNeural Network is a model that allows fordetermining non-linear relations between therecords. The algorithm structure is built onprinciples close to those of the human brainneurons. The model is trained on a labeleddataset making input data pass through severallayers (i.e. sets of mathematical functions). Themodels of this type employ 1-2 hidden layers.Deep Neural Networks works similar to neuralnetworks but employs much more layers thana usual Neural Network. This provides moreaccurate results, as well as requires morecomputing power and time for data processingNeural network20
Fraud Detection: How Machine Learning Systems Help Reveal Scamsin Fintech, Healthcare, and eCommerceDeep neural networksDeep learning has created a revolution in datascience over the past years. Consequently, italso impacted the financial services industry.Currently, neural networks are being appliedboth for transactional verification and insuranceclaims.Pros: Neural networks and especially deep neuralnetworks are powerful at finding non-linear andvery complex relations in large datasets. Thisworks both for transactional data and for text andimage analysis, which may be used in insurancecases. They usually provide high accuracy, whichmakes neural networks a necessary part of amodern fraud detection ensemble.Cons: Neural networks are state-of-the-artsystems that are very difficult to build and tweakto reach efficiency. They require highly skilledprofessionals and a powerful computingarchitecture. For this reason, we don’t recommendusing the method for express analysis of alltransactions. Another major problem with deepneural networks is the lack of interpretability.While they may be highly accurate, it’s nearlyimpossible to define how specifically the systemarrived at one conclusion or the other.21
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Fraud-Detection-How-Machine-Learning-Systems-Help-Reveal-Scams-in-Fintech-Healthcare-and-eCommerce

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