Data mining Assignment Essay Example | Topics and Well Written Essays - 2250 words

Data mining Assignment - Essay Example Generally there are incidences of fraud that have not yet been detected (Borzykowski, 2012 p. 34). With increased cases of fraud, it is a high time for effective measures to be applied to combat these crimes for once and for all. All the merchants, banking systems and the card owners should enroll on application of effective measures. With the application of data mining, one is capable of determining the hot spots which are the target for these crimes. Due to increased technology in businesses, application of computer science Information Technology would help solve this phenomenon (Borzykowski, 2012 p. 34). Efficient fraud detection unveils suspicious behaviors providing alarms to the organization.Cases of fraud experienced in data mining are collected (Tan, 2013, p.345). Metrics for calculating the fraud data are designed and an automated mode of their calculation is developed. Finally the IT expert’s develops a detection model for the fraud. Globally more than 30% of firms h ave experienced fraud in the year 2009.Retail businesses like supermarket have enrolled in usage of closed-circuit televisions in conjunction with POS data in fraud detection (Tan, 2013, p.345). 2. Introduction Fraud detection can be categorized into statistical techniques and artificial intelligence. Statistical data analysis involves pre-processing of data like detection, validation, error correction; missing and invalid data rectification. One can match algorithms in detection of any abnormality in transactions. Forensic accountants specialize in procurement and analysis of electronic data in detection and rectification of an error. Merchandising agents have started using un-supervised methods like Break Point Analysis and Bolton Hand Use Analysis in detection of credit cards accounts frauds. Peer group analysis is capable of detecting individuals who behave in a different way compared to the previous individuals seen. Break point analysis detects the abnormal transactions in a g iven account (Robert, John and Gary, 2009, p.543). A three level profiling operates at the account level to detect any form of fraud. Normal profiling and behavioral profiling are applied. Human pattern reorganization and automated data algorithms are linked to create Domain-Specific Interfaces to visually present the accounts holder’s data (Robert et al 2009, p.543). Banks should start using advanced software to detect any miscellaneous transactions. More security measures like pin and ZIP codes should be provided by the customer whenever he or she is conducting any transaction. The software will detect any transaction done at a far distance from the card owner’s geographical location. More details of the card owner like a passport photo should be displayed every time. The photo will enable the merchant or the bank to compare the physical appearance of the customer and determine if he or she is the authorized person. One will be able to determine the common area in wh ich the owner conducts his or her transaction most frequently (Borzykowski, 2012 p. 35). Card owners should also be vigilant by ensuring that they do perform regular checks of their accounts. They should keep their important documents in safe places and besides being cautious on the people whom they have authorized to perform their transactions. The government needs to take serious measures on any person accused of conducting fraud crimes (Borzykowski, 2012 p. 35). 3. Data Mining Data mining is a field of computer science that deals with