Fraud detection on event log of bank financial credit business process using Hidden Markov Model algorithm

Dewi Rahmawati; Riyanarto Sarno; Chastine Fatichah; Dwi Sunaryono

doi:10.1109/ICSITech.2017.8257082

Fraud detection on event log of bank financial credit business process using Hidden Markov Model algorithm

Institut Teknologi Sepuluh Nopember

Research output: Chapter in Book/Report/Conference proceeding › Conference contribution › peer-review

26 Citations (Scopus)

Abstract

Criminal cases of banks have risen by 55% in 2016. One of the reasons is the fraud in business processes cannot be detected early. Responding to that issue, this research proposes a method for detecting fraud on business processes in the bank credit application. This method uses Hidden Markov Models and activity information recorded in the event log. Hidden Markov Model that used for calculating probability possibility of fraud based on the event log. The results show that HMM method can detect fraud appropriately. The experimental results also show that the accuracy of the results is 94%.

Original language	English
Title of host publication	Proceeding - 2017 3rd International Conference on Science in Information Technology
Subtitle of host publication	Theory and Application of IT for Education, Industry and Society in Big Data Era, ICSITech 2017
Editors	Lala Septem Riza, Andri Pranolo, Aji Prasetyo Wibawa, Enjun Junaeti, Yaya Wihardi, Ummi Raba'ah Hashim, Shi-Jinn Horng, Rafal Drezewski, Heui Seok Lim, Goutam Chakraborty, Leonel Hernandez, Shah Nazir
Publisher	Institute of Electrical and Electronics Engineers Inc.
Pages	35-40
Number of pages	6
ISBN (Electronic)	9781509058662
DOIs	https://doi.org/10.1109/ICSITech.2017.8257082
Publication status	Published - 1 Jul 2017
Event	3rd International Conference on Science in Information Technology, ICSITech 2017 - Bandung, Indonesia Duration: 25 Oct 2017 → 26 Oct 2017

Publication series

Name	Proceeding - 2017 3rd International Conference on Science in Information Technology: Theory and Application of IT for Education, Industry and Society in Big Data Era, ICSITech 2017
Volume	2018-January

Conference

Conference	3rd International Conference on Science in Information Technology, ICSITech 2017
Country/Territory	Indonesia
City	Bandung
Period	25/10/17 → 26/10/17

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 16 Peace, Justice and Strong Institutions

Keywords

bank
event logs
financial
fraud
hidden Markov model
process mining

Access to Document

10.1109/ICSITech.2017.8257082

Cite this

Rahmawati, D., Sarno, R., Fatichah, C., & Sunaryono, D. (2017). Fraud detection on event log of bank financial credit business process using Hidden Markov Model algorithm. In L. S. Riza, A. Pranolo, A. P. Wibawa, E. Junaeti, Y. Wihardi, U. R. Hashim, S.-J. Horng, R. Drezewski, H. S. Lim, G. Chakraborty, L. Hernandez, & S. Nazir (Eds.), Proceeding - 2017 3rd International Conference on Science in Information Technology: Theory and Application of IT for Education, Industry and Society in Big Data Era, ICSITech 2017 (pp. 35-40). (Proceeding - 2017 3rd International Conference on Science in Information Technology: Theory and Application of IT for Education, Industry and Society in Big Data Era, ICSITech 2017; Vol. 2018-January). Institute of Electrical and Electronics Engineers Inc.. https://doi.org/10.1109/ICSITech.2017.8257082

Rahmawati, Dewi ; Sarno, Riyanarto ; Fatichah, Chastine et al. / Fraud detection on event log of bank financial credit business process using Hidden Markov Model algorithm. Proceeding - 2017 3rd International Conference on Science in Information Technology: Theory and Application of IT for Education, Industry and Society in Big Data Era, ICSITech 2017. editor / Lala Septem Riza ; Andri Pranolo ; Aji Prasetyo Wibawa ; Enjun Junaeti ; Yaya Wihardi ; Ummi Raba'ah Hashim ; Shi-Jinn Horng ; Rafal Drezewski ; Heui Seok Lim ; Goutam Chakraborty ; Leonel Hernandez ; Shah Nazir. Institute of Electrical and Electronics Engineers Inc., 2017. pp. 35-40 (Proceeding - 2017 3rd International Conference on Science in Information Technology: Theory and Application of IT for Education, Industry and Society in Big Data Era, ICSITech 2017).

@inproceedings{82142b4647684c149746c90f4835e83c,

title = "Fraud detection on event log of bank financial credit business process using Hidden Markov Model algorithm",

abstract = "Criminal cases of banks have risen by 55\% in 2016. One of the reasons is the fraud in business processes cannot be detected early. Responding to that issue, this research proposes a method for detecting fraud on business processes in the bank credit application. This method uses Hidden Markov Models and activity information recorded in the event log. Hidden Markov Model that used for calculating probability possibility of fraud based on the event log. The results show that HMM method can detect fraud appropriately. The experimental results also show that the accuracy of the results is 94\%.",

keywords = "bank, event logs, financial, fraud, hidden Markov model, process mining",

author = "Dewi Rahmawati and Riyanarto Sarno and Chastine Fatichah and Dwi Sunaryono",

note = "Publisher Copyright: {\textcopyright} 2017 IEEE.; 3rd International Conference on Science in Information Technology, ICSITech 2017 ; Conference date: 25-10-2017 Through 26-10-2017",

year = "2017",

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doi = "10.1109/ICSITech.2017.8257082",

language = "English",

series = "Proceeding - 2017 3rd International Conference on Science in Information Technology: Theory and Application of IT for Education, Industry and Society in Big Data Era, ICSITech 2017",

publisher = "Institute of Electrical and Electronics Engineers Inc.",

pages = "35--40",

editor = "Riza, \{Lala Septem\} and Andri Pranolo and Wibawa, \{Aji Prasetyo\} and Enjun Junaeti and Yaya Wihardi and Hashim, \{Ummi Raba'ah\} and Shi-Jinn Horng and Rafal Drezewski and Lim, \{Heui Seok\} and Goutam Chakraborty and Leonel Hernandez and Shah Nazir",

booktitle = "Proceeding - 2017 3rd International Conference on Science in Information Technology",

address = "United States",

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Rahmawati, D, Sarno, R , Fatichah, C & Sunaryono, D 2017, Fraud detection on event log of bank financial credit business process using Hidden Markov Model algorithm. in LS Riza, A Pranolo, AP Wibawa, E Junaeti, Y Wihardi, UR Hashim, S-J Horng, R Drezewski, HS Lim, G Chakraborty, L Hernandez & S Nazir (eds), Proceeding - 2017 3rd International Conference on Science in Information Technology: Theory and Application of IT for Education, Industry and Society in Big Data Era, ICSITech 2017. Proceeding - 2017 3rd International Conference on Science in Information Technology: Theory and Application of IT for Education, Industry and Society in Big Data Era, ICSITech 2017, vol. 2018-January, Institute of Electrical and Electronics Engineers Inc., pp. 35-40, 3rd International Conference on Science in Information Technology, ICSITech 2017, Bandung, Indonesia, 25/10/17. https://doi.org/10.1109/ICSITech.2017.8257082

Fraud detection on event log of bank financial credit business process using Hidden Markov Model algorithm. / Rahmawati, Dewi; Sarno, Riyanarto ; Fatichah, Chastine et al.
Proceeding - 2017 3rd International Conference on Science in Information Technology: Theory and Application of IT for Education, Industry and Society in Big Data Era, ICSITech 2017. ed. / Lala Septem Riza; Andri Pranolo; Aji Prasetyo Wibawa; Enjun Junaeti; Yaya Wihardi; Ummi Raba'ah Hashim; Shi-Jinn Horng; Rafal Drezewski; Heui Seok Lim; Goutam Chakraborty; Leonel Hernandez; Shah Nazir. Institute of Electrical and Electronics Engineers Inc., 2017. p. 35-40 (Proceeding - 2017 3rd International Conference on Science in Information Technology: Theory and Application of IT for Education, Industry and Society in Big Data Era, ICSITech 2017; Vol. 2018-January).

Research output: Chapter in Book/Report/Conference proceeding › Conference contribution › peer-review

TY - GEN

T1 - Fraud detection on event log of bank financial credit business process using Hidden Markov Model algorithm

AU - Rahmawati, Dewi

AU - Sarno, Riyanarto

AU - Fatichah, Chastine

AU - Sunaryono, Dwi

PY - 2017/7/1

Y1 - 2017/7/1

N2 - Criminal cases of banks have risen by 55% in 2016. One of the reasons is the fraud in business processes cannot be detected early. Responding to that issue, this research proposes a method for detecting fraud on business processes in the bank credit application. This method uses Hidden Markov Models and activity information recorded in the event log. Hidden Markov Model that used for calculating probability possibility of fraud based on the event log. The results show that HMM method can detect fraud appropriately. The experimental results also show that the accuracy of the results is 94%.

AB - Criminal cases of banks have risen by 55% in 2016. One of the reasons is the fraud in business processes cannot be detected early. Responding to that issue, this research proposes a method for detecting fraud on business processes in the bank credit application. This method uses Hidden Markov Models and activity information recorded in the event log. Hidden Markov Model that used for calculating probability possibility of fraud based on the event log. The results show that HMM method can detect fraud appropriately. The experimental results also show that the accuracy of the results is 94%.

KW - bank

KW - event logs

KW - financial

KW - fraud

KW - hidden Markov model

KW - process mining

UR - https://www.scopus.com/pages/publications/85046653725

U2 - 10.1109/ICSITech.2017.8257082

DO - 10.1109/ICSITech.2017.8257082

M3 - Conference contribution

AN - SCOPUS:85046653725

T3 - Proceeding - 2017 3rd International Conference on Science in Information Technology: Theory and Application of IT for Education, Industry and Society in Big Data Era, ICSITech 2017

SP - 35

EP - 40

BT - Proceeding - 2017 3rd International Conference on Science in Information Technology

A2 - Riza, Lala Septem

A2 - Pranolo, Andri

A2 - Wibawa, Aji Prasetyo

A2 - Junaeti, Enjun

A2 - Wihardi, Yaya

A2 - Hashim, Ummi Raba'ah

A2 - Horng, Shi-Jinn

A2 - Drezewski, Rafal

A2 - Lim, Heui Seok

A2 - Chakraborty, Goutam

A2 - Hernandez, Leonel

A2 - Nazir, Shah

PB - Institute of Electrical and Electronics Engineers Inc.

T2 - 3rd International Conference on Science in Information Technology, ICSITech 2017

Y2 - 25 October 2017 through 26 October 2017

ER -

Rahmawati D, Sarno R , Fatichah C , Sunaryono D. Fraud detection on event log of bank financial credit business process using Hidden Markov Model algorithm. In Riza LS, Pranolo A, Wibawa AP, Junaeti E, Wihardi Y, Hashim UR, Horng SJ, Drezewski R, Lim HS, Chakraborty G, Hernandez L, Nazir S, editors, Proceeding - 2017 3rd International Conference on Science in Information Technology: Theory and Application of IT for Education, Industry and Society in Big Data Era, ICSITech 2017. Institute of Electrical and Electronics Engineers Inc. 2017. p. 35-40. (Proceeding - 2017 3rd International Conference on Science in Information Technology: Theory and Application of IT for Education, Industry and Society in Big Data Era, ICSITech 2017). doi: 10.1109/ICSITech.2017.8257082

Fraud detection on event log of bank financial credit business process using Hidden Markov Model algorithm

Abstract

Publication series

Conference

UN SDGs

Keywords

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