Group

Dwi Rahmadani Davis (1710533005)

Naurah Atika Dina (1710533024)
Rana Syifa Medinda (1710533023)

Big Data Based Fraud Risk Management

at Alibaba Company
Big data is an all-encompassing term for large and complex data sets, so it becomes difficult to process
using traditional data processing applications. Large data "sizes" are constantly moving targets, starting in 2012
from a few dozen terabytes to many petabytes of data now. By using big data techniques, Alibaba highlights the
progress made in the area of fraud risk management. It builds a real-time payment fraud prevention monitoring
system, called the CTU (Counter Terrorist Unit). CTU is one of the most sophisticated online payment fraud
management systems in China, which can track and analyze the behavior of accounts or users, identify
suspicious activities and implement various levels of care based on intelligent arbitration. The fraud risk model
is one of the supporting layers of CTU. They use statistical techniques and techniques to analyze the risk of
aggregate intermediaries (accounts, users or devices, etc.).
Big data on Alibaba generates thousands of attributes, and a fraud risk model is built to handle a variety
of fraudulent activities. This large data-based fraud model is widely used in almost every procedure on Alibaba
to monitor fraud, such as account opening, identity verification, order placement, before and after transactions,
withdrawals, etc. With exponential business growth, data computing, processing systems and data storage will
also change. It started with the RAC (Oracle product) data computing platform in 2009, through GP and
Hadoop, and now uses ODPS. Alibaba not only has data from Taobao, Tmall, Alipay, but also from partners,
such as Gaode Maps etc. Data from various sources build an integrated data platform, from which the business
scenario is expanded to a large extent too. Marketing uses data analysis to accurately target users and provide
personalized services. And in the area of payment, Alibaba, as the world leader in online payments, builds a
fraud risk management platform to ensure buyers and sellers transact quickly and safely. Credit scores and
insurance prices are other products on Alibaba that use big data extensively.
Fraud risk management on Alibaba is completely different from the traditional financial and banking
system now because of big data. To deal with real-time fraud, a new engineer approach is produced in stages to
fundamentally handle this amount of data. On top of the hardware system, a risk prevention framework is also
built to support new methodologies and algorithms. There are several types of risk prevention frameworks. One
fundamental risk framework is call 'multi-layer risk prevention framework'. On Alibaba, there are 5 layers to
prevent fraud during transactions. One cheater can pass the first layer, he might not be able to pass the next
layer. When a transaction is initiated, the first layer is Account Check, which includes buyer account
information and seller account information. The next layer is Device Inspection. Are there large numbers of
transactions from the same device? Are there transactions from the wrong device? The third layer is Activity
Check, also known as Behavior Check. It examines historical records, patterns of buyer and seller behavior,
links between accounts, devices and scenarios. The Risk Strategy is the fourth layer, assessing actions based on
previous analysis. Some are sent to automated decisions due to obvious fraudulent activities. Some gray boxes
are sent to the fifth layer, manual review. Another difference between Alibaba's fraud risk management and the
traditional financial and banking system is the main object of risk. The customer is the main object in the
banking system. While at Alibaba, prevention of risk fraud is at the customer level, at the account level, at the
device level and at the scenario level as well. Besides that, Alibaba also uses AntBuckler to expand its risk
prevention capabilities. AntBuckler is a product to help traders and banks to identify the risk of cyber crime and
fraudulent activities.