Survey of Data-mining Techniques used in Fraud Detection and Prevention

Data mining is a powerful tool widely used by organizations to enhance their businesses and gain a competitive advantage over their competitors. The data mining process helps in extracting and analyzing various data patterns, information or trends from large databases. Various data mining techniques are available to conduct the data mining process. Data mining techniques are used in a variety of applications, one of which is the detection and prevention of different types of frauds. Although there is existing research on data mining and various data mining techniques that can be used to detect and identify different types of frauds, there is little research that synthesizes various facets of fraud that uses the data mining techniques. In this survey study, we classify frauds into four categories with regards to the use of data mining as a tool in fraud detection and prevention. The four categories of fraud are management fraud, customer fraud, network fraud and computer-based fraud. We present the latest developments on the use of data mining as a tool for each of these categories.