Detection of Narcotics Money Laundering in Suspicious Financial Transactions Using Convolutional Extreme Gradient Boosting (ConvXGB)

With the development of narcotics problems that continue to increase, the Indonesian Government responds through the Badan Narkotika Nasional (BNN) with data showing the condition of narcotics tends to grow every year and is followed by the number of assets of money laundering (ML) crimes against narcotics cases. One of the banks in Indonesia as a reporting party for suspicious financial transactions (SFT) has obstacles in detecting narcotics ML due to complex and rarely found patterns. Some previous studies conducted experiments using Convolutional Neural Network (CNN), Extreme Gradient Boosting (XGBoost), and even a combination of both into Convolutional Extreme Gradient Boosting (ConvXGB), and improved model performance in several datasets. This paper designs a model using the ConvXGB algorithm by adopting the CNN architecture, LeNet-5, by applying several convolution layers and pooling layers as a baseline model for feature learning, and the XGBoost as feature classification. Three phases of research are the preprocessing phase by collecting data, transforming data, balancing data with a hybrid sampling technique, splitting data, and scaling data, followed by the implementation phase by creating a ConvXGB model, training and testing the model, then finally the evaluation phase by analyzing results and hyperparameter tuning. The dataset used is SFT from the bank during 2023. This ConvXGB has three convolution layers, a pooling layer, and a flattened layer. The performance test results are the accuracy value and F1-Score value of 99.11% each after hyperparameter tuning. By performing a hybrid model, the model performance results are better.