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LEVERAGING GRAPH-TECHNOLOGY
TO FIGHT FINANCIAL FRAUD
Feb 2017
Stefan Kolmar
Director Field Engineering
Retail Banking First-Party Fraud!
Opening many lines of credit with no intention of !
paying them back!
Causing	High	Impact	
•  Tens	of	billions	of	dollars	lost	every	year	
by	
U.S.	Banks.(1)	
•  25%	of	total	consumer	credit	charge-offs	
in	the	United	States.(2)	
•  10%	to	20%	of	unsecured	bad	debt	at	
leading		
U.S.	and	European	banks	is	misclassified,	
and		
is	actually	first-party	fraud.(3)	
	
(1) Experian: http://www.experian.com/assets/decision-analytics/white-papers/first-partyfraud-wp.pdf!
(2)  Experian: http://www.experian.com/assets/decision-analytics/white-papers/first-partyfraud-wp.pdf!
(3) Business Insider: http://www.businessinsider.com/how-to-use-social-networks-in-the-fight-against-first-party-fraud-2011-3!
Detec%ng	Fraud	Rings	
SSN1!
123 NW 1st
Street!
San
Francisco,
CA!
555-555-
5555!
123 NW 1st
Street!
San
Francisco,
CA!555-555-
5555!
Skimming	
Person A! Person B!
Location A! Location B!
Phone	Number	Duplicate	Use	
555-555-5
555!
Person A!
Person B!
Suspect	eCommerce	
Person A!
Person B!
Location C!
IP address!
Fraud Demo – Part I (generic)!
•  Fraud scenario covering Retail Fraud use cases!
•  Data set contains operational data!
•  Constant data load –> injecting fraud cases -> generate alerts!
•  Capability to export data of detected fraud for further investigation!
Neo4j!
App Server!
Fraud
Detection!
Web App!
Fraud App!
Browser!
UX:
TestDataG
en!
Alert generated!
Demo!
Why using GraphDB / Neo4j for Fraud Detection?!
•  Graphs are intuitive to understand!
•  Schema free - > Flexibility!
•  Nodes can vary depending on time / usage / semantic!
•  Adopt dynamic changes!
•  Agile Development!
•  High productivity and rapid implementation !
•  No “RDBMS-waterfall-high-investment-trap” !
•  Taking advantage of the full value of connected data and data relationships!
•  Traversing the graph compared to self joins in RDBMS!
•  Near real time response times!
•  Preventing fraud rather than detecting after the fact!
•  Usage scenario Fraud Analyst: !
•  Potential fraud case detected!
•  Enriched with data from various sources containing data on fraud suspect!
•  Trigger human and/or automated reactions!
Fraud	Demo	–	Part	II	
Neo4j!
Web App!
RDBMS!
(Oracle, MySQL,
DB2, HANA …)!
Management Console!
(E.g BI Tools such as !
Tableau, Qlik, BO,
MicroStrategy etc)!
Fraud	
Analyst	
Machine2Machine !
generated actions!
Alert!
Incoming Events!
CRM System!
!
!
!
!
!
Operational System!
!
!
Data!
Integration!
External Data!
Using Neo as the foundation of a fraud solution in
your architecture!
Step 1: Set up Data Integration!
Step 2: Visualize Data in BI Tool!
Conclusions!
•  Fraud as one use case to provide full value of connected data within the
entire organization!
•  Neo4j as the foundation to do 360 degree fraud detection and
prevention!
•  Neo4j to extend your existing environment while protecting your
investments!
•  Neo4j provides best value integrated in the entire environment!
•  Neo4j as the foundation for generating real time alerts to trigger
automated or manual interventions!
!
A deeper look into
the database!
A brief look into the data model ….!
Fraud Demo!
Solutions powered with Neo4j !
2017!
!
Stefan.Kolmar@neotechnology.com!
THANK YOU!

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GraphDay Stockholm - Levaraging Graph-Technology to fight Financial Fraud

  • 1. LEVERAGING GRAPH-TECHNOLOGY TO FIGHT FINANCIAL FRAUD Feb 2017 Stefan Kolmar Director Field Engineering
  • 2. Retail Banking First-Party Fraud! Opening many lines of credit with no intention of ! paying them back! Causing High Impact •  Tens of billions of dollars lost every year by U.S. Banks.(1) •  25% of total consumer credit charge-offs in the United States.(2) •  10% to 20% of unsecured bad debt at leading U.S. and European banks is misclassified, and is actually first-party fraud.(3) (1) Experian: http://www.experian.com/assets/decision-analytics/white-papers/first-partyfraud-wp.pdf! (2)  Experian: http://www.experian.com/assets/decision-analytics/white-papers/first-partyfraud-wp.pdf! (3) Business Insider: http://www.businessinsider.com/how-to-use-social-networks-in-the-fight-against-first-party-fraud-2011-3!
  • 3. Detec%ng Fraud Rings SSN1! 123 NW 1st Street! San Francisco, CA! 555-555- 5555! 123 NW 1st Street! San Francisco, CA!555-555- 5555! Skimming Person A! Person B! Location A! Location B! Phone Number Duplicate Use 555-555-5 555! Person A! Person B! Suspect eCommerce Person A! Person B! Location C! IP address!
  • 4. Fraud Demo – Part I (generic)! •  Fraud scenario covering Retail Fraud use cases! •  Data set contains operational data! •  Constant data load –> injecting fraud cases -> generate alerts! •  Capability to export data of detected fraud for further investigation! Neo4j! App Server! Fraud Detection! Web App! Fraud App! Browser! UX: TestDataG en! Alert generated!
  • 6. Why using GraphDB / Neo4j for Fraud Detection?! •  Graphs are intuitive to understand! •  Schema free - > Flexibility! •  Nodes can vary depending on time / usage / semantic! •  Adopt dynamic changes! •  Agile Development! •  High productivity and rapid implementation ! •  No “RDBMS-waterfall-high-investment-trap” ! •  Taking advantage of the full value of connected data and data relationships! •  Traversing the graph compared to self joins in RDBMS! •  Near real time response times! •  Preventing fraud rather than detecting after the fact!
  • 7. •  Usage scenario Fraud Analyst: ! •  Potential fraud case detected! •  Enriched with data from various sources containing data on fraud suspect! •  Trigger human and/or automated reactions! Fraud Demo – Part II Neo4j! Web App! RDBMS! (Oracle, MySQL, DB2, HANA …)! Management Console! (E.g BI Tools such as ! Tableau, Qlik, BO, MicroStrategy etc)! Fraud Analyst Machine2Machine ! generated actions! Alert! Incoming Events! CRM System! ! ! ! ! ! Operational System! ! ! Data! Integration! External Data!
  • 8. Using Neo as the foundation of a fraud solution in your architecture! Step 1: Set up Data Integration! Step 2: Visualize Data in BI Tool!
  • 9. Conclusions! •  Fraud as one use case to provide full value of connected data within the entire organization! •  Neo4j as the foundation to do 360 degree fraud detection and prevention! •  Neo4j to extend your existing environment while protecting your investments! •  Neo4j provides best value integrated in the entire environment! •  Neo4j as the foundation for generating real time alerts to trigger automated or manual interventions! !
  • 10. A deeper look into the database!
  • 11. A brief look into the data model ….!
  • 12. Fraud Demo! Solutions powered with Neo4j ! 2017! ! Stefan.Kolmar@neotechnology.com!