Financial Fraud Detection using Radial Basis Network

The ubiquitous cases of abnormal transactions with intent to defraud is a global phenomenon. An architecture that enhances fraud detection using a radial basis function network was designed using a supervised data mining technique― radial basis function (RBF) network, interpolation approximation method. Several base models were thus created, and in turn used in aggregation to select the optimum model using the misclassification erro accuracy, sensitivity, specificity and receiver operating characteristics (ROC) metrics. The results shows model has a zero-tolerance for fraud with better especially in cases where there were no fraud doubtful cases were rather flagged than to allow a fraud incident to pass undetected. Expectedly, the model’s computations converge faster at 200 iterations. generic with similar characteristics with other classification methods but distinct parameters thereby minimizing the time and cost of fraud detection by adopting computationally efficient algorithm.