FiFrauD: Unsupervised Financial Fraud Detection in Dynamic Graph Streams

Abstract

Given a stream of financial transactions between traders in an e-market, how can we accurately detect fraudulent traders and suspicious behaviors in real time? Despite the efforts made in detecting these fraudsters, this field still faces serious challenges, including the ineffectiveness of existing methods for the complex and streaming environment of e-markets. As a result, it is still difficult to quickly and accurately detect suspected traders and behavior patterns in real-time transactions, and it is still considered an open problem. To solve this problem and alleviate the existing challenges, in this article, we propose FiFrauD, which is an unsupervised, scalable approach that depicts the behavior of manipulators in a transaction stream. In this approach, real-time transactions between traders are converted into a stream of graphs and, instead of using supervised and semi-supervised learning methods, fraudulent traders are detected precisely by exploiting density signals in graphs. Specifically, we reveal the traits of fraudulent traders in the market and propose a novel metric from this perspective, i.e., graph topology, time, and behavior. Then, we search for suspicious blocks by greedily optimizing the proposed metric. Theoretical analysis demonstrates upper bounds for FiFrauD's effectiveness in catching suspicious trades. Extensive experiments on five real-world datasets with both actual and synthetic labels demonstrate that FiFrauD achieves significant accuracy improvements compared with state-of-the-art fraud detection methods. Also, it can find various suspicious behavior patterns in a linear runtime and provide interpretable results. Furthermore, FiFrauD is resistant to the camouflage tactics used by fraudulent traders.