The paper presents two algorithms as a solution to the problem of identifying fraud intentions of a customer. Their purpose is to generate variables that contribute to fraud models’ predictive power improvement. In this article, a novel approach to the feature engineering, based on anomaly detection, is presented. As the choice of statistical model used in the research improves predictive capabilities of a solution to some extent, most of the attention should be paid to the choice of proper predictors. The main finding of the research is that model enrichment with additional predictors leads to the further improvement of predictive power and better interpretability of anti-fraud model. The paper is a contribution to the fraud prediction problem but the method presented may generate variable input to every tool equipped with variableselection algorithm. The cost is the increased complexity of the models obtained. The approach is illustrated on a dataset from one of the European banks.
The study aimed to examine the use of Geomagnetic Anomaly Detection (GAD) to locate the buried ferromagnetic pipeline defects without exposing them. However, the accuracy of GAD is limited by the background noise. In the present work, we propose an approximate entropy noise suppression (AENS) method based on Variational Mode Decomposition (VMD) for detection of pipeline defects. The proposed method is capable of reconstructing the magnetic field signals and extracting weak anomaly signals that are submerged in the background noise, which was employed to construct an effective detector of anomalous signals. The internal parameters of VMD were optimized by the Scale–Space algorithm, and their anti-noise performance was compared. The results show that the proposed method can remove the background noise in high-noise background geomagnetic field environments. Experiments were carried out in our laboratory and evaluation results of inspection data were analysed; the feasibility of GAD is validated when used in the application to detection of buried pipeline defects.