Anomaly Prediction Based On LSTM And Autoencoders Using Federated Learning In Financial Transactions- Survey

As more and more financial activities transition to digital platform, recognizing unusual transaction patterns has become an important and challenging task. Conventional centralized machine learning models for fraud detection bring with them significant challenges like data privacy and scaling. This survey investigates the promising combination of Long Short-Term Memory (LSTM) networks, Autoencoders and Federated Learning (FL) act as a powerful privacy-preserving solution for anomaly detection on financial transactions. Long Short-Term Memory (LSTM) models are a state-of-the-art choice for learning long range relations on sequential data whereas autoencoders are very efficient models which learn lower-dimensional state representations and pinpoint anomalous behavior. Federated Learning, in contrast, presents a decentralized model training mode in which collaborative learning can be conducted among banks and financial institutions without sharing confidential transaction information. This review discusses the state of the art, the key advances and the potential synergies of these methodologies. This inspires practical implementations of scalable and trustworthy AI-driven financial anomaly systems, as the movement towards an increasingly federated data ecosystem mandates secure and scalable solutions.

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Publication Details

Journal
International Journal of Environmental Sciences
Published
2025-06-24
DOI
https://doi.org/10.64252/z3s2x606
Citations
1
Primary Topic
Stock Market Forecasting Methods
Type
article
Field-Weighted Citation Impact
2.11
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article

Anomaly Prediction Based On LSTM And Autoencoders Using Federated Learning In Financial Transactions- Survey

Gaurav Kumar, Pushpendra Kumar Verma
1 citations
International Journal of Environmental Sciences
Stock Market Forecasting Methods
2.11
article

Anomaly Prediction Based On LSTM And Autoencoders Using Federated Learning In Financial Transactions- Survey

Gaurav Kumar, Pushpendra Kumar Verma
article en
1 citations

Abstract

As more and more financial activities transition to digital platform, recognizing unusual transaction patterns has become an important and challenging task. Conventional centralized machine learning models for fraud detection bring with them significant challenges like data privacy and scaling. This survey investigates the promising combination of Long Short-Term Memory (LSTM) networks, Autoencoders and Federated Learning (FL) act as a powerful privacy-preserving solution for anomaly detection on financial transactions. Long Short-Term Memory (LSTM) models are a state-of-the-art choice for learning long range relations on sequential data whereas autoencoders are very efficient models which learn lower-dimensional state representations and pinpoint anomalous behavior. Federated Learning, in contrast, presents a decentralized model training mode in which collaborative learning can be conducted among banks and financial institutions without sharing confidential transaction information. This review discusses the state of the art, the key advances and the potential synergies of these methodologies. This inspires practical implementations of scalable and trustworthy AI-driven financial anomaly systems, as the movement towards an increasingly federated data ecosystem mandates secure and scalable solutions.

International Journal of Environmental Sciences
Openalex Percentile: Top 10%
Stock Market Forecasting Methods
2.11
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Anomaly Prediction Based On LSTM And Autoencoders Using Federated Learning In Financial Transactions- Survey — Gaurav Kumar, Pushpendra Kumar Verma · International Journal of Environmental Sciences (2025) | TGRS Research Map | TGRS