CHADALAWADA RAMANAMMA ENGINEERING COLLEGE

(UGC – AUTONOMOUS)
Approved by AICTE, Accredited by NAAC with ‘A’ Grade , Affiliated to JNTUA
DEPARTMENT OF COMPUTER SCIENCE AND ENGINEERING

MINI PROJECT
ON
ROBUST ARTIFICIAL NEURAL NETWORK TECHNIQUE TO DETECT FRAUD TRANSACTIONS ON
CREDIT CARD

Under the Guidance of Presented by (Batch No:6)

Mr. C. SUDHARSHAN REDDY ,M. Tech, (Ph. D) B.S.LAVAKUMAR RAJU - 18P11A0506

Associate professor D.SUMANTH - 18P11A0522

J.MANASA - 18P11A0538

K.ANIL KUMAR - 18P11A0554

CONTENTS
 Domain
 Abstract
 Introduction
 Literature Survey
 Existing System
 Disadvantages of Existing System
 Proposed System
 Advanced of Proposed System
 Applications
 System Architecture
 Configuration
 Modules
 UML Diagrams
 Code
 Result and Screenshot
 Conclusion
DOMAIN
Machine Learning :
• Machine learning is an application of artificial intelligence(AI) and computer
science based on the idea that systems learn from data identify patterns and make
decisions.
• UnSupervised learning is a type of machine learning in which algorithm is not
provided with any pre-assigned labels or scores for the training data.
• UnSupervised learning algorithms must first self-discover any naturally occurring
patterns in that training data set.
• One of UnSupervised agorithm, Artificial Neural Netwok is used in our project.
• Neural Network ,also known as artificial neural networks(ANNs) or Simulate
neural networks(SNNs),are a subset of machine learning and are at the heart of
deep learning algorithms.Their nace and structure are inspired by the human
brain,mimicking the way that biological neurons signal to one other.
ABSTRACT
In this modern era with the rising of e-commerce in the world, the usage of credit
card is getting popular among the world nowadays. A credit card allows you to make
purchases and pay for them later. So, security in this system is highly expected to
prevent fraud transactions. Fraud transactions in credit card data transaction are
increasing each year. However, there is always a need of some techniques that should
precisely and efficiently detect these frauds. This project proposed a new method for
detecting frauds in credit card data which uses Artificial Neural Network (ANN) based
unsupervised learning technique. This technique is compared with Auto Encoder (AE),
Local Outlier Factor (LOF), Isolation Forest (IF) and K-Means clustering and proposed
method provides better accuracy. Here, I am implementing the hyperparameters on
Neural Network such as number of layers ,activation function ,loss function
,optimizer ,batch size and number of epochs to train. Each Neural Network will have its
best set of hyperparameters which will lead to maximum accuracy. To analyse the result,
the proposed system can compare with the existence system, when compared with the
analysed result the accuracy is high compared with the Existence system parameters
such as Precision , Recall and F1 Score. In this proposed system, I implement the best
practices for hyperparameters such as Learning Rate and Network Architecture.
INTRODUCTION
 The Rising of E-commerce business has resulted in a gentle growth within the usage
of credit cards for online transactions and purchases. Credit card frauds are those
which are done with an intention to gain money in a deceptive manner without the
knowledge of the cardholder.
 Fraud detection in online shopping systems is the hottest topic nowadays. Fraud
investigators ,banking systems , and electronic payment systems such as PayPal
must have an efficient and complex fraud detection system to prevent fraud activities
that change rapidly.
 Credit card frauds are those which are done with an intension to gain money in a
deceptive manner without the knowledge of the cardholder.
 The identification of the fraudulent credit card transactions is a common type of
imbalanced binary classification . It's probably not news to you that fraud is a huge
global and national problem. Fraud is a major problem for credit card companies,
both because of the large volume of transactions that are completed each day and
because many fraudulent transactions look a lot like normal transactions.
LITERATURE SURVEY
S.No TITLE
Fraud Detection in Credit
Card Data using
1 Unsupervised Machine
Learning Based Scheme.
Fraud Detection using
2 Machine Learning in e-
Commerce.
Credit card fraud detection
3 using Machine Learning
Techniques.
AUTHOR PUBLICATIONS LIMITATIONS
A. K. Rai and R. K. ICESC High Complexity.
Dwivedi in 2020
Saputra, Adi & IEEE International Low realibility.
Suharjito, Suharjito in Conference.
2019
John O. Awoyemi, IEEE Access Low Accuracy.
Adebayo O.
Adetunmbi in 2019
EXISTING SYSTEM
In past people have used Supervised machine learning algorithm for fraud
detections.
But, the entire problem of credit card fraud detection suffers from a problem
of imbalance data ( a very high imbalanced data).
This problem requires us to heavily process the data before training any
machine learning model like Random Forest.
In existing system we approaches of Auto Encoder (AE), Local Outlier
Factor (LOF), Isolation Forest (IF) and K-Means clustering .

Disadvantages of Existing System :


Low reliability.

Low accuracy.

High complexity.

Time-management is an issue in the existing approach.
PROPOSED SYSTEM
 The Proposed work as represented in the flow chart show the steps to detect
the frauds. It demonstrates that pre-processing is done to clean the data and to
extract the features .
 This Project uses Artificial Neural Networks for predicting if a transaction is
fraudulent or not. It demonstrates that pre-processing is done to clean the data
and to extract the features.
 Train the model and apply testing with various unsupervised learning models
and the performance of our ANN model is measure with all the other methods
from the existing system.
 For identifying the outliers, I used five algorithms (NN, AE, IF, LOF, K
Means) one by one and evaluated the performance.
 These methods are used during anomaly detection problem .
Advanced of Proposed System :
 High reliability.
 High accuracy.
 Low complexity.
 works well for huge data projects.
APPLICATIONS
 A Neural network is a serial of algorithm that endeavours to recognize
underlying relationships in a set of data through a process that mimics the way
the human brain operates.
 Neural Networks are used for solving many business problems such as :
 Sales Forecasting ,
 Customer Research ,
 Data Validation and
 Risk Management .
 It is neurally implemented mathematical model. It contains huge number of
interconnected processing elements called neurons to do all operations.
 Information stored in the neurons are basically the weighted linkage of neurons.
SYSTEM ARCHITECTURE

FIG: Architecture of robust artificial neural network technique to detect fraud transactions on credit card
CONFIGURATIONS
HARDWARE REQUIREMENTS :
• Processor - I3/Intel Processor
• RAM - 4GB (min)
• Hard Disk - 1Tb

SOFTWARE SYSTEM CONFIGURATION :

• Operating System : Windows 10

• Server side Script : Python 3.6+

• IDE : Jupyter Notebook
• Libraries Use : Pandas, Numpy .
MODULES
1. System:
i. Store Dataset: The System stores the dataset given by the user.
ii. Model Training: The system takes the data from the user and fed that data to the
selected model.
iii. Model Predictions: The system takes the data given by the user and predict the output
based on the given data.

2. User:
iv. Load Dataset: The user can load the dataset he/she want to work on.
v. View Dataset: The User can view the dataset.
vi. Select model: User can apply the model to the dataset for accuracy.
vii. Evaluation: User can evaluate the model performance.
DATA FLOW DIAGRAMS(DFDS)
• A Data Flow diagram (DFD) is graphical tool used to describe and analyse
movement of data through a system.
• These are the central tool and the basis from which the other components are
developed. The transformation of data from input to output, through processed,
may be described logically and independently of physical components associated
with the system. These are known as the logical data flow diagrams.
Context Level DFD :

Figure : Context Level DFD

First Level DFD:

Figure : First Level DFD

Second Level DFD:

Figure : Second Level DFD

UML DIAGRAMS
USE CASE DIAGRAM :

• A use case diagram in the Unified Modelling Language (UML) is a type of

behavioural diagram defined by and created from a Use-case analysis. Its
purpose is to present a graphical overview of the functionality provided by a
system in terms of actors, their goals (represented as use cases), and any
dependencies between those use cases.
• The main purpose of a use case diagram is to show what system functions are
performed for which actor. Roles of the actors in the system can be depicted.
Figure - Use case diagram
SEQUENCE DIAGRAM :

• A sequence diagram in Unified Modelling Language (UML) is a kind of

interaction diagram that shows how processes operate with one another and in
what order.
• It is a construct of a Message Sequence Chart.
• Sequence diagrams are sometimes called event diagrams, event scenarios, and
timing diagrams.
Figure : Sequence Diagram
COLLABORATION DIAGRAM :
• In collaboration diagram the method call sequence is indicated by some
numbering technique as shown below.
• The number indicates how the methods are called one after another. I have taken
the same order management system to describe the collaboration diagram. The
method calls are similar to that of a sequence diagram.

Figure : Collaboration Diagram

CLASS DIAGRAM :
• In software engineering, a class diagram in the Unified Modeling Language
(UML) is a type of static structure diagram that describes the structure of a
system by showing the system's classes, their attributes, operations (or
methods), and the relationships among the classes.

Figure : Class Diagram

ACTIVITY DIAGRAM :
• Activity diagrams are graphical representations of workflows of stepwise activities
and actions with support for choice, iteration and concurrency.

Figure : Activity Diagram

STATECHART DIAGRAM :
• Statechart diagram is used to find out the state of the object and I can define
state chart diagram is define flow of states from one object to another object.

Figure : State Chart Diagram

CODE RESULT AND SCREENSHOTS
Data Loading :
Information about Dataset :
Local Outlier Factor Model Building :

Classification Report :
Isolation Forest Model Building :

Classification Report :
K-Means Model Building :

Classification Report:
Auto Encoders :
Classification Report:
Neural Networks :
Classification Report:
Graph views:
Accuracy graph
Precision Graph
Recall Graph
CONCLUSION
In this application, I have successfully created unsupervised ML models to
detect whether the credit card transactions is fraud or not. I noticed that out of
Local Outlier Factor, Isolation Forest, K-Means Clustering, Neural Networks
and Auto Encoders Neural Networks performs well with accuracy score of 99%
and precision and recall scores of 85%. .The very nature of this project allows
for multiple algorithms to be integrated together as modules and their results can
be combined to increase the accuracy of the final result.
REFERENCES
1) A. A. Taha, S. J. Malebary, “Intelligent Approach to Credit Card Fraud Detection Using an
OLightGBM”, IEEE Access (2020), pp. 25579- 25587.
2) S. N. Kalid, K. H NG, G. K Tong, K. C Khore., “A Multiple Classifiers System for Anomaly Detection
in Credit Card Data With Unbalanced and Overlapped Classes”, IEEE Access (2020), Vol. 8, pp.
28210- 28221.
3) S. Makki, Z. A Assaghir, Y. Taher, R. Haque, M. S Hacid, H. Zeineddine, “An Experimental Study
With Imbalanced Classification Approaches for Credit Card Fraud Detection”, Special Section On
Advanced Software And Data Engineering For Secure Societies, IEEE Access (2019), Vol 7, pp.
9301093022.
4) K. Randhawa, C. K Loo, M. Seera, C. P Lim, A. K. Nandi, “Credit Card Fraud Detection Using
Adaboost And Majority Voting”, Ieee Access, (2018) Vol 6, pp 14277-14284.
5) Andrea Dal Pozzolo, Giacomo Boracchi, Olivier Caelen, Cesare Alippi, Gianluca Bontempi, “Credit
Card Fraud Detection: A Realistic Modeling and a Novel Learning Strategy”, Ieee Transactions On
Neural Networks And Learning Systems, (2018) Vol. 29, No. 8, pp. 3784- 3794.
6) L. Meneghetti, M. Terzi, S. Del Favero, G. A Susto, C. Cobelli, “DataDriven Anomaly Recognition
for Unsupervised Model-Free Fault Detection in Artificial Pancreas”, Ieee Transactions On Control
Systems Technology, (2018) pp. 1-15.
7) Saputra, Adi & Suharjito, Suharjito. (2019). Fraud Detection using Machine Learning in eCommerce.
10.14569/IJACSA.2019.0100943