A Spatial–Temporal Gated Network for Credit Card Fraud Detection by Learning Transactional Representations

Yu Xie, Guanjun Liu, Meng Chu Zhou, Lifei Wei, Honghao Zhu, Rigui Zhou, Lei Cao

Research output: Contribution to journalArticlepeer-review

Abstract

Credit card fraud detection (CCFD) is an important issue concerned by financial institutions. Existing methods generally employ aggregated or raw features as their representations to train their detection models. Yet such features tend to fall short of effectively exposing the characteristics of various frauds. In this work, we propose a spatial-temporal gated network (STGN) to automatically learn new informative transactional representations containing users&#x2019; transactional behavioral information for CCFD. A gated recurrent neural net unit is specifically constructed with a time-aware gate and location-aware gate to extract users&#x2019; spatial and temporal transactional behaviors. A spatial-temporal attention module is designed to expose the transaction motive of users in their historical transactional behaviors, which allows the proposed model to better extract the fraudulent characteristics from successive transactions with time and location information. A representation interaction module is offered to make rational decisions and learn compositive transactional representations. A real-world transaction dataset is used in experiments to verify the efficacy of the learned new representations. The results demonstrate that our proposed model outperforms the state-of-the-art ones, thus greatly advancing the field of CCFD. <italic>Note to Practitioners</italic>&#x2014;The features of transaction records reflect the characteristics of users&#x2019; transactional behaviors. Therefore, effective features are critical for accurate CCFD. However, fraudsters often pretend to be legitimate users during transactions to deceive the CCFD system. As a result, fraudulent behaviors become concealed within legitimate ones, signifying that original features are inadequate for accurate CCFD. Thus, it is imperative for researchers and practitioners to extract new features that can well expose fraud characteristics. While existing methods employing some transaction aggregation strategies can spot certain fraudulent behaviors, they fail to clearly cluster all the anomalous behaviors and distinguish them from legitimate behaviors. Therefore, this work is driven by the urgent demand to extract new informative features for CCFD. Its primary focus is to unveil the aggregation of fraudulent transactional behaviors from both temporal and spatial perspectives, enabling more accurate CCFD. Specifically, this work introduces a new STGN model that automatically learns new transactional representations incorporating users&#x2019; transactional behavioral information for CCFD. By comprehensively considering the time interval and location interval of consecutive user transactions, we thoroughly reveal the temporal and spatial aggregation of fraudulent behavior, which provides valuable insights for CCFD practitioners: 1) employing features that integrate the behavioral characteristics of fraudsters instead of the original features can enhance the model&#x2019;s capability to identify frauds, and 2) taking into account the time and location intervals of users&#x2019; consecutive historical transactions can better uncover the behavioral characteristics of fraudsters.

Original languageEnglish (US)
Pages (from-to)1-14
Number of pages14
JournalIEEE Transactions on Automation Science and Engineering
DOIs
StateAccepted/In press - 2023
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Control and Systems Engineering
  • Electrical and Electronic Engineering

Keywords

  • Behavioral sciences
  • Credit card fraud detection
  • Credit cards
  • Feature extraction
  • Fraud
  • Logic gates
  • Random forests
  • Recurrent neural networks
  • gated recurrent networks
  • representation learning
  • transactional behavior

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