Otonongetuk/Fraudulent-Transaction-Detection-NovaPay

Business Context NovaPay, a rapidly growing digital money transfer company, faces significant challenges in maintaining the security of its transactions amidst the increasing sophistication of fraud. As the company expands globally, it is essential to protect its customers and maintain operational efficiency. Fraudulent activities such as identity theft, unauthorized payments, and account takeovers threaten the company’s financial integrity and customer trust. Given the company's reliance on real-time transactions, the need for a more robust, scalable, and adaptable fraud detection system is critical. Purpose of Project The purpose of this project is to develop a machine learning-based fraud detection system for NovaPay, replacing its existing static, rules-based approach. The solution will aim to enhance the accuracy of detecting fraudulent transactions while minimizing the rate of false positives (legitimate transactions wrongly flagged as fraudulent). This will ensure that customers have a smoother experience and trust in the service while also reducing the operational and financial impact of fraud. The machine learning model will be capable of evolving as fraud tactics change, providing long-term adaptability and scalability. Expected Outcome The expected outcomes of this project are: Increased Accuracy in Fraud Detection: A significant improvement in identifying fraudulent transactions compared to the previous rules-based system, with at least a 15% increase in recall (ability to catch fraudulent transactions). Reduced False Positives: A decrease in the number of legitimate transactions wrongly flagged as fraud, improving the customer experience. Scalable and Adaptable System: A machine learning system that can scale with NovaPay’s growth and quickly adapt to new fraud tactics. Regulatory Compliance: An explainable model that provides transparent reasons for fraud predictions, ensuring that regulatory requirements are met. Operational Efficiency: A model deployed as a microservice, integrated seamlessly into NovaPay’s transaction system, enabling real-time fraud detection without the need for manual reviews.