Credit card fraud detection using machine learning techniques: A comparative analysis

Financial fraud is an ever growing menace with far consequences in the financial industry. Data mining had played an imperative role in the detection of credit card fraud in online transactions. Credit card fraud detection, which is a data mining problem, becomes challenging due to two major reasons - first, the profiles of normal and fraudulent behaviours change constantly and secondly, credit card fraud data sets are highly skewed. The performance of fraud detection in credit card transactions is greatly affected by the sampling approach on dataset, selection of variables and detection technique(s) used. This paper investigates the performance of naïve bayes, k-nearest neighbor and logistic regression on…