Fraud detection is a cornerstone of recent e-commerce, but it’s also one of many least publicized domains in Machine Studying. That’s for motive: it’s an adversarial area, the place fraudsters continually invent new methods to bypass present fashions, and mannequin builders continually invent new methods to catch them.
The aim of fraud detection techniques is to dam fraudulent transactions, resembling these positioned by pretend accounts utilizing stolen bank cards, whereas on the identical time stopping any friction to the procuring expertise of real clients. False negatives (fraud transactions that mistakenly went via the system) end in financial loss also called ‘dangerous debt’ because of chargebacks initiated by the precise bank card homeowners, whereas false positives (real transactions that have been blocked) end in poor buyer expertise and churn.
Think about {that a} fashionable e-commerce supplier could course of someplace within the order of tens of Thousands and thousands of orders per day, and that fraud charges are on the sub-percent degree, and also you’re beginning to see why it is a difficult area. It’s the final word needle-in-a-haystack drawback, the place the haystacks are overwhelmingly giant and…