What are some common fraud detection techniques?

What are some common fraud detection techniques used in finance?

Common techniques include anomaly detection, transaction monitoring, and machine learning algorithms.

How does anomaly detection work in fraud detection?

Anomaly detection identifies patterns that deviate from the norm, flagging unusual transactions for review.

Can you explain how machine learning is applied in this context?

Machine learning models analyze historical data to learn patterns of legitimate vs. fraudulent behavior, improving detection.

What role does data quality play in fraud detection?

Data quality is crucial; accurate, complete data enhances the effectiveness of detection techniques.