Applying Extensions of Evidence Theory to Detect Frauds in Financial Infrastructures

• Published in: International journal of distributed sensor networks Vol. 2015; no. 10; pp. 1 - 16
• Main Authors: Coppolino, Luigi, D’Antonio, Salvatore, Formicola, Valerio, Romano, Luigi
• Format: Journal Article
• Language: English
• Published: London, England Hindawi Publishing Corporation 01.01.2015; SAGE Publications; Sage Publications Ltd. (UK); Sage Publications Ltd; Hindawi - SAGE Publishing
• Subjects: Algorithms; Analysis; Cellular telephones; Classification; Computer simulation; Crime prevention; Data integration; Dealing; Decision-making; Engineering research; Financial services; Fraud; Infrastructure; Laws, regulations and rules; Mobile devices; Money transfer; Monitors; Safety and security measures; Transfer of funds
• ISSN: 1550-1329; 1550-1477
• DOI: 10.1155/2015/980629

The Dempster-Shafer (DS) theory of evidence has significant weaknesses when dealing with conflicting information sources, as demonstrated by preeminent mathematicians. This problem may invalidate its effectiveness when it is used to implement decision-making tools that monitor a great number of parameters and metrics. Indeed, in this case, very different estimations are likely to happen and can produce unfair and biased results. In order to solve these flaws, a number of amendments and extensions of the initial DS model have been proposed in literature. In this work, we present a Fraud Detection System that classifies transactions in a Mobile Money Transfer infrastructure by using the data fusion algorithms derived from these new models. We tested it in a simulated environment that closely mimics a real Mobile Money Transfer infrastructure and its actors. Results show substantial improvements of the performance in terms of true positive and false positive rates with respect to the classical DS theory.