Detecting Financial Fraud in Real-Time Transactions Using Graph Neural Networks and Anomaly Detection Techniques

Real-time fraud detection must balance accuracy with millisecond-level latency as adversaries evolve tactics across accounts, devices, merchants, and networks. This paper presents a streaming framework that models payment ecosystems as dynamic, heterogeneous graphs and detects anomalies by fusing Graph Neural Networks (GNNs) with online anomaly detectors. Incoming transactions update a temporal multi-relational graph (card–device–merchant–IP), from which a lightweight GNN (GraphSAGE/GAT variants with edge features and time encoding) produces embeddings on the fly. These embeddings feed (a) a cost-sensitive classifier for known fraud and (b) unsupervised detectors (e.g., Isolation Forest/Deep SVDD) to surface novel, label-sparse attacks. To cope with class imbalance and concept drift, we employ streaming reweighting, adaptive thresholds tuned on precision@k, and continual learning via replay and drift triggers. The system exposes local explanations (subgraph rationales via GNNExplainer/motif scores) to support analyst review and regulatory needs, while a deployment blueprint (feature cache, micro-batching, and asynchronous inference) meets <50–100 ms decision budgets. We evaluate on mixed synthetic/industry datasets with evolving fraud scenarios, reporting ROC-AUC/PR-AUC, detection delay, alert volume, and business impact under cost constraints. Results show consistent gains over rule-based, tabular ML, and static graph baselines, particularly for low-footprint fraud and fast-moving attack campaigns. The proposed design offers a practical path to accurate, auditable, and scalable fraud screening in production payment streams.

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Publication Details

Journal
Journal of Economics Finance and Accounting Studies
Published
2025-09-29
DOI
https://doi.org/10.32996/jefas.2025.7.6.1
Primary Topic
Imbalanced Data Classification Techniques
Type
article
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article

Detecting Financial Fraud in Real-Time Transactions Using Graph Neural Networks and Anomaly Detection Techniques

Muhammad Ather Rafi, Rasheed Zakaria, Mohammad Mahmudur Rahman‬, Md. Hasibur Rahman et al.
Journal of Economics Finance and Accounting Studies
Imbalanced Data Classification Techniques
article

Detecting Financial Fraud in Real-Time Transactions Using Graph Neural Networks and Anomaly Detection Techniques

Muhammad Ather Rafi, Rasheed Zakaria, Mohammad Mahmudur Rahman‬, Md. Hasibur Rahman, ME Choudhury
article en

Abstract

Real-time fraud detection must balance accuracy with millisecond-level latency as adversaries evolve tactics across accounts, devices, merchants, and networks. This paper presents a streaming framework that models payment ecosystems as dynamic, heterogeneous graphs and detects anomalies by fusing Graph Neural Networks (GNNs) with online anomaly detectors. Incoming transactions update a temporal multi-relational graph (card–device–merchant–IP), from which a lightweight GNN (GraphSAGE/GAT variants with edge features and time encoding) produces embeddings on the fly. These embeddings feed (a) a cost-sensitive classifier for known fraud and (b) unsupervised detectors (e.g., Isolation Forest/Deep SVDD) to surface novel, label-sparse attacks. To cope with class imbalance and concept drift, we employ streaming reweighting, adaptive thresholds tuned on precision@k, and continual learning via replay and drift triggers. The system exposes local explanations (subgraph rationales via GNNExplainer/motif scores) to support analyst review and regulatory needs, while a deployment blueprint (feature cache, micro-batching, and asynchronous inference) meets <50–100 ms decision budgets. We evaluate on mixed synthetic/industry datasets with evolving fraud scenarios, reporting ROC-AUC/PR-AUC, detection delay, alert volume, and business impact under cost constraints. Results show consistent gains over rule-based, tabular ML, and static graph baselines, particularly for low-footprint fraud and fast-moving attack campaigns. The proposed design offers a practical path to accurate, auditable, and scalable fraud screening in production payment streams.

Journal of Economics Finance and Accounting StudiesVol. 7(6)
Pacific University Oregon (US), Boston University (US), Trine University (US), St. Francis College (US), University of Massachusetts Boston (US)
Openalex Percentile: Top 86%
Imbalanced Data Classification Techniques
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