domain-fintech:fraud-detection

Fraud Detection

When to use

• Building or tuning velocity checks, amount anomaly rules, and geo-anomaly detection
• Implementing ML-based anomaly detection (isolation forest, autoencoders)
• Designing a real-time fraud scoring pipeline with combined rule + ML scores
• Adding device fingerprinting or behavioral biometrics to authentication flows
• Implementing 3DS2 and optimizing frictionless approval rates
• Building fraud analyst case management queues and chargeback prevention

Core principles

1. Every false positive is a lost customer — tune thresholds per risk tier, not globally
2. Combine rules and ML — rules catch known patterns fast; ML catches novel behavior
3. Feature freshness determines accuracy — stale user profiles produce wrong scores at scale
4. Feedback loop is mandatory — case outcomes that don't retrain the model are wasted signal
5. Liability shift over blocking — 3DS2 frictionless approval with liability shift beats auto-decline

Reference Files

• references/​rule-based-detection.md — velocity checks, amount thresholds, geographic anomaly rules, rule engine schema with scoring, device fingerprinting signals and risk scoring
• references/​ml-scoring-pipeline.md — isolation forest and autoencoder models, model deployment (shadow/​champion-challenger), behavioral biometrics, real-time scoring pipeline, scoring tiers, feature store design
• references/​3ds2-case-management.md — 3DS2 frictionless vs challenge flow, implementation via processor SDK, analyst review workflow, feedback loop, chargeback prevention and ratio monitoring