Blockchain Technology and Data Mining Tools for Combating Fraud

Abstract

For the last few years, rapid digitalization has been observed in the world banking industry, which helped boost global economic growth. At the same time, fraud cases in the banking sector have been increasing immensely. Regulating authorities of banks nationwide have been issuing numerous circulars and guidelines for preventing fraud incidents. However, fraudsters are taking advantage of the digitalization of and shortfalls in the industry, by which the fraudsters easily defraud customers and banks. Hence, it resulted in a worsening of the asset quality of banks and a loss of public trust and confidence in the banking industry. In this regard, banks must be equipped with sophisticated technological tools for fraud identification and preventive measures apart from the conventional systems and procedures since core banking solutions in the banking industry have evolved drastically over the last few years. In this context, this chapter is intended to study the role of blockchain technology and data mining tools in identifying and preventing frauds in specific bank products.