Graph databases are based on graph theory and use nodes and relationships to store data. They are a type of property graph database that can scale easily. Graph databases are well-suited for applications that rely on relationships between data, need to find patterns in behavioral data, or require linking disparate data sources. Specifically, they are effective for fraud detection by identifying patterns across entities, providing a 360-degree view of customers by linking their various profiles and activities, and making recommendations by leveraging connections in user data.