Application of LLMS to Fraud Detection

Fraud detection in financial systems remains a critical challenge due to highly imbalanced data, evolving fraudulent tactics, and strict privacy constraints that limit the availability of data. Traditionally, tree based models such as random forests, XGBoost, and LightGBM have been the backbone of fraud detection, offering robust performance through extensive feature engineering. However, recent advances in large language models (LLMS), pretrained on massive corpora and endowed with powerful in-context learning capabilities suggest that these models can be leveraged to enhance fraud detection even in low-data regimes. In this study, we explore the applications of LLMs to fraud detection on tabular data by converting structured inputs into natural language through various serialization techniques, including list templates, text templates, and a markdown-based t-table format. This conversion enables LLMs to exploit their pre-trained knowledge for zero-shot and few-shot learning scenarios. We evaluate the impact of different serialization methods on model performance and examine the sample efficiency of LLMs relative to conventional tree-based models. Our experimental results demonstrate that LLMs achieve competitive performance on fraud detection tasks, particularly when data is scarce, and offer a promising alternative to traditional approaches. This work provides valuable insights and guidelines for deploying LLMs in real-world financial applications, paving the way for more efficient, data driven fraud detection systems.

Authors

Publication Details

Journal
World Journal of Advanced Research and Reviews
Published
2025-05-06
DOI
https://doi.org/10.30574/wjarr.2025.26.2.1586
Citations
1
Primary Topic
Imbalanced Data Classification Techniques
Type
article
Field-Weighted Citation Impact
2.48
Controls
|||
ALL TIME
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
article

Application of LLMS to Fraud Detection

Curthbert Jeremiah Malingu, Collin Arnold Kabwama, Pius Businge, Ivan Asiimwe Agaba et al.
1 citations
World Journal of Advanced Research and Reviews
Imbalanced Data Classification Techniques
2.48
article

Application of LLMS to Fraud Detection

Curthbert Jeremiah Malingu, Collin Arnold Kabwama, Pius Businge, Ivan Asiimwe Agaba, Ian Asiimwe Ankunda, Brian Mugalu, Joram Gumption Ariho, Denis Musinguzi
article en
1 citations

Abstract

Fraud detection in financial systems remains a critical challenge due to highly imbalanced data, evolving fraudulent tactics, and strict privacy constraints that limit the availability of data. Traditionally, tree based models such as random forests, XGBoost, and LightGBM have been the backbone of fraud detection, offering robust performance through extensive feature engineering. However, recent advances in large language models (LLMS), pretrained on massive corpora and endowed with powerful in-context learning capabilities suggest that these models can be leveraged to enhance fraud detection even in low-data regimes. In this study, we explore the applications of LLMs to fraud detection on tabular data by converting structured inputs into natural language through various serialization techniques, including list templates, text templates, and a markdown-based t-table format. This conversion enables LLMs to exploit their pre-trained knowledge for zero-shot and few-shot learning scenarios. We evaluate the impact of different serialization methods on model performance and examine the sample efficiency of LLMs relative to conventional tree-based models. Our experimental results demonstrate that LLMs achieve competitive performance on fraud detection tasks, particularly when data is scarce, and offer a promising alternative to traditional approaches. This work provides valuable insights and guidelines for deploying LLMs in real-world financial applications, paving the way for more efficient, data driven fraud detection systems.

World Journal of Advanced Research and ReviewsVol. 26(2)
Openalex Percentile: Top 11%
Imbalanced Data Classification Techniques
2.48
AI Navigator

Ask Laika to Summarize, Analyze, and Connect papers live on the map.

Summarize Papers & Methodologies

Extract key findings, datasets, and comparative methods across publications.

Benchmark Rankings & Visual Analytics

Rank top research institutions, authors, funders, topics, and journals by Field-Weighted Citation Impact (FWCI) and paper volume with instant charts.

Connect Distant Disciplines

Bridge topological clusters on the map to find hidden collaborative intersections.