Towards Fraud Detection Methodologies

Fraud and abuse have led to significant additional expense in the banking and financial system of the United States. This paper aims to provide a comprehensive survey of the statistical methods applied to banking and financial fraud detection, with focuses on classifying fraudulent behaviors, identifying the major sources and characteristics of the data based on which fraud detection has been conducted, discussing the key steps in data preprocessing, as well as summarizing, categorizing, and comparing statistical fraud detection methods.