We present a data mining approach for profiling bank clients in order to support the process of detection of anti-money laundering operations. We first present the overall system architecture, and then focus on the relevant component for this paper. We detail the experiments performed on real world data from a financial institution, which allowed us to group clients in clusters and then generate a set of classification rules. We discuss the relevance of the founded client profiles and of the generated classification rules. According to the defined overall agent-based architecture, these rules will be incorporated in the knowledge base of the intelligent agents responsible for the signaling of suspicious transactions.
In @cite_5 , the authors present a case study corresponding to the application of a knowledge base solution that combines data mining techniques, clustering, neural networks and genetic algorithms to detect money-laundering patterns.
@cite_5
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In this paper, we study the problem of applying data mining to facilitate the investigation of money laundering crimes (MLCs). We have identified a new paradigm of problems --- that of automatic community generation based on uni-party data, the data in which there is no direct or explicit link information available. Consequently, we have proposed a new methodology for Link Discovery based on Correlation Analysis (LDCA). We have used MLC group model generation as an exemplary application of this problem paradigm, and have focused on this application to develop a specific method of automatic MLC group model generation based on timeline analysis using the LDCA methodology, called CORAL. A prototype of CORAL method has been implemented, and preliminary testing and evaluations based on a real MLC case data are reported. The contributions of this work are: (1) identification of the uni-party data community generation problem paradigm, (2) proposal of a new methodology LDCA to solve for problems in this paradigm, (3) formulation of the MLC group model generation problem as an example of this paradigm, (4) application of the LDCA methodology in developing a specific solution (CORAL) to the MLC group model generation problem, and (5) development, evaluation, and testing of the CORAL prototype in a real MLC case data. Suspicious transaction detection is used to report banking transactions that may be connected with criminal activities. Obviously, perpetrators of criminal acts strive to make the transactions as innocent-looking as possible. Because activities such as money laundering may involve complex organizational schemes, machine learning techniques based on individual transactions analysis may perform poorly when applied to suspicious transaction detection. In this paper, we propose a new machine learning method for mining transaction graphs. The method proposed in this paper builds a model of subgraphs that may contain suspicious transactions. The model used in our method is parametrized using fuzzy numbers which represent parameters of transactions and of the transaction subgraphs to be detected. Because money laundering may involve transferring money through a variable number of accounts the model representing transaction subgraphs is also parametrized with respect to some structural features. In contrast to some other graph mining methods in which graph isomorphisms are used to match data to the model, in our method we perform a fuzzy matching of graph structures. Recently, money laundering is becoming more and more sophisticated, it seems to have moved from the personal gain to the cliche of drug trafficking and financing terrorism. This criminal activity poses a serious threat not only to financial institutions but also to the nation. Today, most international financial institutions have been implementing anti-money laundering solutions but traditional investigative techniques consume numerous man-hours. Besides, most of the existing commercial solutions are based on statistics such as means and standard deviations and therefore are not efficient enough, especially for detecting suspicious cases in investment activities. In this paper, we present a case study of applying a knowledge-based solution that combines data mining and natural computing techniques to detect money laundering patterns. This solution is a part of a collaboration project between our research group and an international investment bank. Today, money laundering (ML) poses a serious threat not only to financial institutions but also to the nation. This criminal activity is becoming more and more sophisticated and seems to have moved from the cliche of drug trafficking to financing terrorism and surely not forgetting personal gain. Most international financial institutions have been implementing anti-money laundering solutions (AML) to fight investment fraud. However, traditional investigative techniques consume numerous man-hours. Recently, data mining approaches have been developed and are considered as well-suited techniques for detecting ML activities. Within the scope of a collaboration project for the purpose of developing a new solution for the AML Units in an international investment bank based in Ireland, we propose a new data mining-based approach for AML. In this paper, we present this approach and some preliminary results associated with this method when applied to transaction datasets.