Comparative Study on GANs and VAEs in Credit Card Fraud Detection

In today’s world, the major issue credit card sectors encounter is fraud. This comparative study deals with how GANs and VAEs detect fraudulent transactions. The dataset comprised 284807 transactions, of which 492 were fraudulent. These two models, GANs and VAEs, are trained on this dataset, during which, in the training process, the models are learned to deal with the imbalance in the dataset. VAEs are trained so that fraud transactions are considered anomalies, and only legitimate transactions are passed onto the model for training. Conversely, GANs generate synthetic data of fraud by addressing the problem of data imbalance and passed on to the ML model for classification. We can observe that Both the models have very good AUC-ROC scores of around 96%, which indicates their distinguishing capability between the classes. In all other aspects, GANs outperformed VAEs, which makes GANs a better option for fraud detection.