Deep Learning Anti-Fraud Model for Internet Loan: Where We Are Going

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Abstract
Recently, Internet finance is increasingly popular. However, bad debt has become a serious threat to Internet financial companies. The fraud detection models commonly used in conventional financial companies is logistic regression. Although it is interpretable, the accuracy of the logistic regression still remains to be improved. This paper takes a large public loan dataset, e.g. Lending club, for example, to explore the potential of applying deep neural network for fraud detection. We first fill the missing values by a random forest. Then, an XGBoost algorithm is employed to select the most discriminate features. After that, we propose to use a synthetic minority oversampling technique to deal with the sample imbalance. With the preprocessed data, we design a deep neural network for Internet loan fraud detection. Extensive experiments have been conducted to demonstrate the outperformance of the deep neural network compared with the commonly-used models. Such a simple yet effective model may brighten the application of deep learning in anti-fraud for Internet loans, which would benefit the financial engineers in small and medium Internet financial companies.
Funding Information
  • National Natural Science Foundation of China (61902232)
  • Science and Technology Plan Project of Henan Province (182102210459)
  • Key Scientific Research Plan Project of Henan University (16A510007)
  • Natural Science Foundation of Guangdong Province (2018A030313291)
  • Education Science Planning Project of Guangdong Province (2018GXJK048)
  • STU Scientific Research Foundation for Talents (NTF18006)
  • 2020 Li Ka Shing Foundation Cross-Disciplinary Research (2020LKSFG05D)

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