A walk through a common fraud case : how to use Neo4j and graph visualization to identify criminals and fight loan fraud.

1. How to apply graph analytics for
bank loan fraud detection?
SAS founded in 2013 in Paris | http://linkurio.us | @linkurious

2. WHAT IS A GRAPH?
Father Of
Father Of
Siblings
This is a graph

3. WHAT IS A GRAPH : NODES AND RELATIONSHIPS
Father Of
Father Of
Siblings
A graph is a set of nodes linked by
relationships
This is a node
This is a
relationship

4. People, objects, movies,
restaurants, music
Antennas, servers, phones,
people
Supplier, roads, warehouses,
products
Graphs can be used to model many domains
DIFFERENT DOMAINS WHERE GRAPHS ARE IMPORTANT
Supply chains Social networks Communications

5. But why can graphs can help identify fraud?
GRAPH AND FRAUD DETECTION

6. AITE Group estimates that first party fraud will cost $28.6
billion in credit card losses a year by 2016.
THE COST OF FRAUD

7. A look at a common fraud scenario banks face
A COMMON FRAUD SCENARIO
Create a fake
identity
Go to the bank,
ask for a loan
Disappear with
the money
A criminal uses the fake
identity to register a bank
account. He acts like a
normal customer and tries to
secure a loan
Once the criminal feels he
cannot get access to more
money he carefully prepares
his exit : in a short amount of
time he empties all of his
accounts and disappears
A criminal or a group of
criminal mix pieces of
information (addresses,
phone numbers, social
security number) to create a
“synthetic-identity”

8. THE PAINS OF WORKING ON CONNECTED DATA WITH RELATIONAL TECHNOLOGIES
Relational databases are not good at handling...
relationships
Depth RDBMS execution time (s) Neo4j execution time (s) Records returned
2 0.016 0.01 ~2500
3 30.267 0.168 ~110 000
4 1543.505 1.359 ~600 000
5 Unfinished 2.132 ~800 000
Finding extended friends in a 1M people social network (from the book Graph Databases)

9. Loan
$25k
Home address
58, Eisenhower Square
A GRAPH DATA MODEL FOR FRAUD DETECTION
Customer name
J. Smith
Phone number
+33 5 68 98 25 74
The first step to detect fake identity is to use a
graph to model customer information
Credit card
1 234$
ID
J. Smith
A graph showing a legitimate customer and the information she is linked to

10. In a fraud ring people share the same information
A LOOK AT A FRAUD RING THROUGH GRAPH VISUALIZATION
58, Eisenhower Square
14, Roses Street
+33 6 75 89 22 14
$7k
P. Martin
$12,5k +331 42 58 66 00
J. Smith
SSN 17873897893
8, Sugar Hill Street
$20k
E. Selmati
SSN 1787576553
$45k
P. Smith
SSN 1787579953
SSN 1267576553
8, Coronation Street

11. HOW TO APPLY IT IN THE REAL WORLD
Graph databases makes it possible to identify
the fraud patterns in real-time
Lifecycle events trigger
security checks
A new customer opens
an account
An existing customer asks
for a loan
A customer skips a loan
payment
A Neo4j Cypher query
runs to detect patterns
The bank can make an
informed decision

12. The fraud teams acts faster
and more fraud cases can be
avoided.
WHAT IS THE IMPACT OF LINKURIOUS
If something suspicious comes up, the analysts
can use Linkurious to quickly assess the
situation
Linkurious allows the fraud
teams to go deep in the data
and build cases against fraud
rings.
Treat false
positives
Investigate
serious cases
Save money
Linkurious allows you to
control the alerts and make
sure your customers are not
treated like criminals.

13. DEMO
Go to linkurio.us to try it!

14. TECHNOLOGY
Cloud ready and open-source based

15. OTHER USE CASES
Graphs are everywhere, learn to leverage them

16. CONCLUSION
Contact us to discuss your projects
at contact@linkurio.us

17. Detailed use case on our blog :
● Part 1 : http://linkurio.us/how-to-detect-bank-loan-fraud-with-graphs-part-1/
● Part 2 : http://linkurio.us/how-to-detect-bank-loan-fraud-with-graphs-part-2/
● Neo4j data set : https://www.dropbox.com/s/wk8k5r23syp6kbx/fraud%20detection.zip
GraphGist by Kenny Bastani : http://gist.neo4j.org/?github-neo4j-contrib%2Fgists%2F%2Fother%
2FBankFraudDetection.adoc
Video demonstration : https://vimeo.com/76891393 (around the 12 minutes mark)
ADDITIONAL RESOURCES