Loan Fraud Detection Using Machine Learning as a Data Mining Approach

The escalating threat of fraud in financial institutions is a global issue, with the Malaysian sector being no exception. This study focuses on the implementation and efficacy of Data Mining and Machine Learning methodologies in identifying and mitigating fraudulent activities within these institutions. The paper critically reviews existing literature, bridging the gap between advanced technology application and fraud management. Fraudulent transactions in the financial sector are dynamic and sophisticated, requiring advanced detection techniques. Traditional approaches often struggle to manage this complexity effectively, demonstrating a need for more advanced and adaptive strategies. This is where Data Mining and Machine Learning techniques, renowned for their predictive and analytical prowess, can significantly contribute. Data Mining, the process of uncovering patterns and correlations within large datasets, is a useful tool for detecting anomalies that may suggest fraud. The study assesses various data mining techniques, such as clustering, classification, and association, and explores their application in detecting fraudulent transactions. Findings indicate that these techniques can substantially enhance fraud detection rates while minimizing false positives. Furthermore, Machine Learning, an artificial intelligence subset, has shown immense potential in fraud detection. Its ability to learn from and make decisions based on data makes it a viable solution for fraud detection. This paper explores both supervised and unsupervised learning algorithms and their efficacy in identifying fraud in the Malaysian financial sector. Results suggest that machine learning models, when correctly implemented, can significantly improve the accuracy of fraud detection. The review underscores the importance of employing advanced technologies like Data Mining and Machine Learning to combat financial fraud effectively. It also suggests future research directions, emphasizing the need for context-specific, localized models considering Malaysia's unique socio-economic environment. Moreover, the development of hybrid models, integrating both data mining and machine learning, could offer improved results. In conclusion, this study sets a precedent for further exploration into the application of advanced analytical tools in fraud detection in the Malaysian financial sector. The potential these technologies offer for improving accuracy and adaptability in fraud detection systems is substantial and warrants thorough investigation. Keywords: Fraud Detection, Malaysian Financial Institutions, Data Mining, Machine Learning, Financial Fraud Management

Recent technological advances allowed an exponential expansion of biological sequence data, and the extraction of meaningful information through Machine Learning (ML) algorithms. This knowledge improved the understanding of the mechanisms related to several fatal diseases, e.g., Cancer and COVID-19, helping to develop innovative solutions, such as CRISPR-based gene editing, coronavirus vaccine, and precision medicine. These advances benefit our society and economy, directly impacting peoples lives in various areas, such as health care, drug discovery, forensic analysis, and food analysis. Nevertheless, ML approaches applied to biological data require representative, quantitative, and informative features. Necessarily, as many ML algorithms can handle only numerical data, sequences need to be translated into a feature vector. This process, known as feature extraction, is a fundamental step for the elaboration of high-quality ML-based models in bioinformatics, by allowing the feature engineering stage, with the design and selection of suitable features. Feature engineering, ML algorithm selection, and hyperparameter tuning are often manual and time-consuming processes, requiring extensive domain knowledge, and performed manually by a human expert. To deal with this problem, we developed a new package, BioAutoML, which automatically runs an end-to-end ML pipeline. BioAutoML extracts numerical and informative features from biological sequence databases, automating feature selection, recommendation of ML algorithm(s), and tuning of hyperparameters, using Automated ML (AutoML). BioAutoML has two components, divided into four modules, (1) automated feature engineering (feature extraction and selection modules) and (2) Metalearning (algorithm recommendation and hyperparameter tuning modules). Our experimental results, assessing the relevance of our proposal, indicate robust results for different problem domains, such as SARS-CoV-2, anticancer peptides, HIV sequences, and non-coding RNAs. According to our systematic review, our proposal is innovative compared to available studies in the literature, being the first study to propose automated feature engineering and metalearning for biological sequences. BioAutoML has a high potential to significantly reduce the expertise required to use ML pipelines, aiding researchers in combating diseases, particularly in low- and middle-income countries. This initiative can provide biologists, physicians, epidemiologists, and other stakeholders with an opportunity for widespread use of these techniques to enhance the health and well-being of their communities.

Evaluation of multispectral imaging for freeze damage assessment in strawberries using AI-based computer vision technology

The integration of machine learning (ML) algorithms into audit processes represents a significant advancement in the field of auditing, offering substantial benefits in terms of efficiency, accuracy, and risk management. This review examines the transformative potential of ML in auditing, highlighting its key benefits and the challenges that must be addressed to fully leverage its capabilities. Machine learning algorithms, with their ability to analyze large datasets and identify patterns, enhance the accuracy and thoroughness of audits. Traditional auditing methods often rely on sampling and manual checks, which can miss anomalies and fraudulent activities. In contrast, ML algorithms can process entire datasets, uncovering subtle patterns and irregularities that may indicate fraud or errors. This comprehensive analysis reduces the risk of oversight and improves the reliability of audit findings. One of the primary benefits of ML in auditing is its capacity for anomaly detection. ML models can be trained on historical data to understand normal financial behavior and flag deviations that might signify irregularities. This ability to detect anomalies in real-time enables auditors to identify potential issues promptly, reducing the time lag between occurrence and detection of fraud. Predictive analytics, powered by ML, further enhances audit processes by forecasting future risks based on historical data. This proactive approach allows auditors to anticipate and mitigate risks before they materialize, contributing to more robust risk management strategies. Despite these advantages, integrating ML into audit processes presents several challenges. Ensuring data quality and integrity is crucial, as ML algorithms are only as good as the data they analyze. Poor-quality data can lead to inaccurate predictions and conclusions. Additionally, the "black box" nature of some ML algorithms can pose transparency issues, making it difficult for auditors to explain how specific conclusions were reached, which is critical for stakeholder trust and regulatory compliance. Another significant challenge is the potential for algorithmic bias. ML models can inadvertently perpetuate existing biases in the data, leading to unfair or skewed audit outcomes. Continuous monitoring and validation of ML algorithms are necessary to detect and mitigate such biases. In conclusion, while integrating machine learning algorithms into audit processes offers substantial benefits in terms of accuracy, efficiency, and risk management, it also necessitates careful attention to data quality, transparency, and bias mitigation. Addressing these challenges is essential to fully realize the potential of ML in enhancing audit practices. Keywords: Benefits, Challenges, Audit Processes, Algorithms, ML.

Use of machine learning (ML) and data mining (DM) algorithms has surfaced more often in the recent years for disease risk prediction problems in the healthcare communities. Several traditional feature selection models are combined with the DM and ML algorithms to improve accuracy of the disease risk prediction. In this study, a new Bio-inspired Ensemble Feature Selection (BEFS) model is introduced which is applied with the DM and ML algorithms. In the BEFS model, the most relevant and highly contributing features in the prediction are determined with a bio-inspired algorithm i.e., genetic algorithm, and an ensemble algorithm i.e., random forest algorithm. These important features obtained from the proposed model are then combined in various combinations and applied with the DM and ML algorithms, here logistic regression (LR) and random forest (RF), and the results obtained are promising. The experiment is executed using the famous ML language R. To accomplish this objective, the Breast Cancer Wisconsin (Diagnostic) dataset of UCI (University of California, Irvine) ML repository is utilized. In the experimental outcomes, the highest accuracy attained with the BEFS model is 96.49%, the AUC (Area Under Curve) achieved is 96%, and the sensitivity is 98.11%. These results, which greatly improve the disease risk prediction, are higher than several other existing works, while utilizing only six most relevant features out of the thirty two features of the dataset.

In the exploration and production of fossil resources, the characterization of rock facies is critical for estimations of rock physical properties, such as porosity and permeability, and for reservoir detection and simulation. We propose a new machine learning (ML) algorithm for characterizing rock facies using a convolutional neural network (CNN) with feature engineering and data padding strategies. In the new ML algorithm, we extend rock feature data from 1-dimensional “profile” to 2-dimensional maps by padding the original dataset. The 2-dimensional padded rock facies map enables the CNN to capture the inherent geological features while keeping the local continuities. In this new ML algorithm, we only need a simple CNN design and structure to efficiently achieve accurate classification of rock facies. We test the feasibility of applying this new algorithm using a verifiable well logging dataset from the Panoma gas field in southwest Kansas. The results show that our new ML algorithm with a simple CNN structure has achieved higher accuracy in classifications of rock facies in comparison with the CNN results of the 2016 SEG ML contest. This new ML algorithm has application potential in automatic rock facies characterization with high accuracy and efficiency.

Data mining and machine learning (ML) methods are used more than ever in cyber security. The use of machine learning (ML) is one of the potential solutions that may be successful against zero-day attacks, starting with categorising IP traffic and filtering harmful traffic for intrusion detection. In this field, certain published systematic reviews were taken into consideration. Recent systematic reviews may incorporate older and more recent works in the topic of investigation.. Both security professionals and hackers use data mining capabilities. Applications for data mining may be used to analyze programme activity, surfing patterns, and other factors to identify potential cyber-attacks in the future. The new study uses statistical traffic features, ML, and data mining approaches. This research performs a concentrated literature review on machine learning and its usage in cyber analytics for email filtering, traffic categorization, and intrusion detection. Each approach was identified, and a summary was provided based on the relevancy and quantity of citations. Some well-known datasets are also discussed since they are a crucial component of ML techniques. On when to utilize a certain algorithm is also offered some advice. Four ML algorithms have been evaluated on MODBUS data gathered from a gas pipeline. Using ML algorithms, other assaults have been categorized, and then the effectiveness of each approach has been evaluated. This study demonstrates the use of ML and data mining for threat research and detection, focusing on malware detection with high accuracy and short detection times.

Three-phase induction motors (IMs) are one of the most employed electric machines in industrial and household applications. Condition monitoring of these machines is essential to avoid unplanned maintenance and thereby enhance the availability. Artificial Intelligence (AI) technologies are emerging as an advanced tool for automating condition monitoring process to detect incipient faults at early stages. Machine Learning (ML) algorithms have been identified as a promising approach for condition monitoring of IMs and predicting maintenance to avoid failures. However, selecting the suitable ML algorithm for a given application is challenging because there is no predefined set of application-based algorithms. In addition, raw data processing and feature selection need careful attention to improve the accuracy of the results. This paper reviews supervised ML algorithms that can be used for condition monitoring of IMs and identifies their benefits and drawbacks. It then discusses how the dominant features from raw data can be selected through time domain and frequency domain analysis using the acoustic data collected from a three-phase induction motor. The study investigates classification accuracy of each ML algorithm and a procedure for selecting an algorithm based on the experimental results. Results of this study show that Support Vector Machines (SVM) algorithm outperforms other competing algorithms in condition monitoring of IMs when the dominant frequency components obtained through Fast Fourier Transform (FFT) are used as training data.

The ability of music to spread joy and excitement across lives, makes it widely acknowledged as the human race's universal language. The phrase "music genre" is frequently used to group several musical styles together as following a shared custom or set of guidelines. According to their unique preferences, people now make playlists based on particular musical genres. Due to the determination and extraction of appropriate audio elements, music genre identification is regarded as a challenging task. Music information retrieval, which extracts meaningful information from music, is one of several real - world applications of machine learning. The objective of this paper is to efficiently categorise songs into various genres based on their attributes using various machine learning approaches. To enhance the outcomes, appropriate feature engineering and data pre-processing techniques have been performed. Finally, using suitable performance assessment measures, the output from each model has been compared. Compared to other machine learning algorithms, Random Forest along with efficient feature selection and hyperparameter tuning has produced better results in classifying music genres.

The rise of financial fraud, not only in India but also around the world, is a major problem. Credit card transactions have been steadily increasing in recent years, as have internet payments like Unified Payments Interface and debit card transactions, which have been increasing every day. As a result, fraud is increasing, and it has become easier for fraudsters to commit fraud. Recent research indicates the practicality of machine learning algorithms for recognizing payment fraud. Since credit cards are a common target, online fraudsters simply commit fraud because of excess use of e-commerce and other platforms, which has led to an increase in online payment methods, resulting in a greater risk of online fraud. Many researchers have started using machine learning algorithms to detect fraud. The primary objective of this study is to create a better fraud detection algorithm by analyzing payment transactional data, focusing on customers' transactional data and their payment behavioral patterns. The study proposes a framework that groups cardholders based on the volume of their transactions. Financial fraud is the biggest threat to world economies in terms of financial losses each year. The task of accurately and efficiently detecting fraud is, therefore, very challenging due to the high volume of transaction data and its complex nature. This paper presents a hybrid machine learning approach using logistic regression, decision trees, and random forests that could help enhance the accuracy and reliability of fraud detection systems. The study used an available credit card fraud dataset, with a focus on feature engineering and model evaluation to compare individual algorithms versus their ensemble. Experimental results show that the ensemble outperformed the individual classifiers in terms of precision, recall, and overall accuracy. This paper underlines the potential of hybrid machine learning techniques in improving fraud detection systems and proposes avenues for further research.

Feature engineering involves extracting information from raw-data to use in machine learning or deep learning algorithms through feature transformation, feature generation or feature extraction, feature construction, feature selection, etc. Feature engineering optimizes the feature space dimensions, thereby reducing complexity. Hence, makes the data suitable for machine learning or deep learning applications: process prediction, detection accuracy, estimation accuracy, and quality of clustering and classi cation. Traditionally machine learning algorithms have been used in various wireless communication appli cations viz spectrum access and sharing, resource allocation, spectrum coverage, capacity optimization, signal intelligence, etc. This chapter presents the need for feature engineering and its application to machine learning and deep learning in wireless communication. The chapter also gives the details of the feature engineering assisted machine-learning algorithm for automatic modulation classi cation and path-loss prediction in wireless communication.KeywordsDeep learningFeature engineeringMachine learningWireless communication

The aging and multimorbid population and health personnel shortages pose a substantial burden on primary health care. While predictive machine learning (ML) algorithms have the potential to address these challenges, concerns include transparency and insufficient reporting of model validation and effectiveness of the implementation in the clinical workflow. To systematically identify predictive ML algorithms implemented in primary care from peer-reviewed literature and US Food and Drug Administration (FDA) and Conformité Européene (CE) registration databases and to ascertain the public availability of evidence, including peer-reviewed literature, gray literature, and technical reports across the artificial intelligence (AI) life cycle. PubMed, Embase, Web of Science, Cochrane Library, Emcare, Academic Search Premier, IEEE Xplore, ACM Digital Library, MathSciNet, AAAI.org (Association for the Advancement of Artificial Intelligence), arXiv, Epistemonikos, PsycINFO, and Google Scholar were searched for studies published between January 2000 and July 2023, with search terms that were related to AI, primary care, and implementation. The search extended to CE-marked or FDA-approved predictive ML algorithms obtained from relevant registration databases. Three reviewers gathered subsequent evidence involving strategies such as product searches, exploration of references, manufacturer website visits, and direct inquiries to authors and product owners. The extent to which the evidence for each predictive ML algorithm aligned with the Dutch AI predictive algorithm (AIPA) guideline requirements was assessed per AI life cycle phase, producing evidence availability scores. The systematic search identified 43 predictive ML algorithms, of which 25 were commercially available and CE-marked or FDA-approved. The predictive ML algorithms spanned multiple clinical domains, but most (27 [63%]) focused on cardiovascular diseases and diabetes. Most (35 [81%]) were published within the past 5 years. The availability of evidence varied across different phases of the predictive ML algorithm life cycle, with evidence being reported the least for phase 1 (preparation) and phase 5 (impact assessment) (19% and 30%, respectively). Twelve (28%) predictive ML algorithms achieved approximately half of their maximum individual evidence availability score. Overall, predictive ML algorithms from peer-reviewed literature showed higher evidence availability compared with those from FDA-approved or CE-marked databases (45% vs 29%). The findings indicate an urgent need to improve the availability of evidence regarding the predictive ML algorithms' quality criteria. Adopting the Dutch AIPA guideline could facilitate transparent and consistent reporting of the quality criteria that could foster trust among end users and facilitating large-scale implementation.

Predictive analytics has emerged as a powerful tool in the field of financial engineering, enabling organizations to forecast trends, optimize strategies, and mitigate risks. Data mining techniques play a crucial role in extracting meaningful patterns from large volumes of financial datasets, contributing to the development of predictive modeling techniques. The purpose of this paper is to explore the application of various data mining techniques in predictive analytics within the financial sector, with a focus on their effectiveness in risk management, fraud detection, and portfolio optimization. Machine learning algorithms, such as decision trees, support vector machines, and neural networks, are increasingly being employed to model complex financial systems and enhance predictive accuracy. Additionally, techniques like clustering, association rule mining, and time series analysis are used to uncover hidden relationships and temporal patterns in financial datasets. Despite the significant advancements in these techniques, challenges remain in terms of data quality, computational complexity, and interpretability of results. This paper addresses these challenges and provides a comprehensive review of the most widely used data mining methods in financial engineering. Furthermore, it discusses the potential for future advancements in data mining algorithms and their integration with other emerging technologies like artificial intelligence and big data analytics. The findings indicate that while data mining offers significant potential in financial analytics, careful consideration must be given to the selection of appropriate techniques and the proper handling of data to ensure reliable predictions. Ultimately, this paper aims to contribute to the ongoing development of robust predictive modeling techniques in financial engineering by emphasizing the importance of data mining as an indispensable tool.

Breast cancer is the most common invasive cancer in females worldwide. Breast cancer diagnosis and breast cancer prognosis are the two important challenges for the researchers in the medical field and also for the practitioners. If the cells in the breast start to grow without any control, it leads to cancer. Normally, the growth of the lump can be seen using x-ray. The benign and malignant breast lumps are distinguished during breast cancer diagnosis. The prognosis process predicts the period at which the breast cancer is likely to reappear in patients who have had their cancers removed. Data mining techniques and machine learning algorithms are mostly used in the whole process of breast cancer diagnosis and treatment. They utilize the large volume of breast cancer data for extracting knowledge. The application of data mining and machine learning methods in biomedical research is presently vital and crucial in efforts to transform intelligently all available data into valuable knowledge.

The purpose of this analysis is to assess the use of machine learning (ML) algorithms in the prediction of postoperative outcomes, including complications, recurrence, and death in transsphenoidal surgery. Following Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) guidelines, we systematically reviewed all papers that used at least one ML algorithm to predict outcomes after transsphenoidal surgery. We searched Scopus, PubMed, and Web of Science databases for studies published prior to May 12, 2021. We identified 13 studies enrolling 5,048 patients. We extracted the general characteristics of each study; the sensitivity, specificity, area under the curve (AUC) of the ML models developed as well as the features identified as important by the ML models. We identified 12 studies with 5,048 patients that included ML algorithms for adenomas, three with 1807 patients specifically for acromegaly, and five with 2105 patients specifically for Cushing's disease. Nearly all were single-institution studies. The studies used a heterogeneous mix of ML algorithms and features to build predictive models. All papers reported an AUC greater than 0.7, which indicates clinical utility. ML algorithms have the potential to predict postoperative outcomes of transsphenoidal surgery and can improve patient care. Ensemble algorithms and neural networks were often top performers when compared with other ML algorithms. Biochemical and preoperative features were most likely to be selected as important by ML models. Inexplicability remains a challenge, but algorithms such as local interpretable model–agnostic explanation or Shapley value can increase explainability of ML algorithms. Our analysis shows that ML algorithms have the potential to greatly assist surgeons in clinical decision making.