Robust Financial Fraud Alerting System Based in the Cloud Environment.

The digitalisation of finance influenced the emergence of new technological concepts for existing user needs. Financial technology, or fintech, provides improved services for customers and new economic value for businesses. As such, fintech services require on-demand availability on a 24/7 basis. For this reason, they are often deployed in cloud environments that allow connectivity with ubiquitous devices. This allows customers to perform online transactions, which are overseen by the respective financial institutions. However, such cloud-based systems introduce new challenges for information security. On one hand, they represent attractive targets for cyberattacks. On the other, financial frauds can still go unnoticed by the financial institutions in charge. This paper contributes to both challenges by introducing the concept for a cloud-based system architecture for fraud detection and client profiling in the banking domain. Therefore, a systematic risk assessment was conducted in this context, and exploitation probabilities were inferred for multiple attack scenarios. In addition, formal verification was accomplished in order to determine the effects of successful vulnerability exploits. The consequences of such security violations are discussed, and considerations are given for improving the resilience of fintech systems.

Follow the Trail: Machine Learning for Fraud Detection in Fintech Applications.

Financial technology, or Fintech, represents an emerging industry on the global market. With online transactions on the rise, the use of IT for automation of financial services is of increasing importance. Fintech enables institutions to deliver services to customers worldwide on a 24/7 basis. Its services are often easy to access and enable customers to perform transactions in real-time. In fact, advantages such as these make Fintech increasingly popular among clients. However, since Fintech transactions are made up of information, ensuring security becomes a critical issue. Vulnerabilities in such systems leave them exposed to fraudulent acts, which cause severe damage to clients and providers alike. For this reason, techniques from the area of Machine Learning (ML) are applied to identify anomalies in Fintech applications. They target suspicious activity in financial datasets and generate models in order to anticipate future frauds. We contribute to this important issue and provide an evaluation on anomaly detection methods for this matter. Experiments were conducted on several fraudulent datasets from real-world and synthetic databases, respectively. The obtained results confirm that ML methods contribute to fraud detection with varying success. Therefore, we discuss the effectiveness of the individual methods with regard to the detection rate. In addition, we provide an analysis on the influence of selected features on their performance. Finally, we discuss the impact of the observed results for the security of Fintech applications in the future.