The purpose of this project

is to develop a sophisticated system for the detection of credit card fraudulent activities.
With the increasing use of technology, credit card fraud has become a major concern for
consumers and financial institutions, resulting in significant financial losses. To address
this issue, it is essential to have systems in place that can detect fraudulent activities and
minimize losses.

One of the key challenges in detecting credit card fraud is the imbalance in the
distribution of fraudulent and non-fraudulent transactions. Fraudulent transactions
constitute a small fraction of all transactions, making it difficult to detect them using
traditional methods.

To overcome this challenge, I have obtained a credit card fraudulent activities dataset
from Kaggle. The dataset will be used to analyze the relationships between various
features and detect fraudulent transactions. Through exploratory data analysis, I aim to
gain a deeper understanding of the dataset and develop a robust model for the
detection of fraudulent activities. The link to the dataset has been provided:
https://www.kaggle.com/mlg-ulb/creditcardfraud

Goal:
The goal of this project is to use machine learning techniques to improve the accuracy
of detecting credit card fraudulent activities. The model will be trained on a dataset of
credit card transactions and the goal is to improve the measure called Area Under the
Precision-Recall Curve (AUPRC). Additionally, the project aims to acquire more
knowledge about the financial industry and how to apply machine learning to real-world
problems.

Introduction:

Credit card fraud is a growing concern, causing billions of dollars in losses for
consumers and financial companies each year. With the advancement of technology,
fraudsters are constantly seeking new ways to commit illegal activities. To tackle this
challenge, financial institutions need more advanced systems for detecting fraud. In this
project, I used a credit card fraud dataset from Kaggle to perform Exploratory Data
Analysis and build a Machine Learning model to improve the accuracy of the Area Under
the Precision-Recall Curve (AUPRC).

Background:
I first encountered Data Science and Machine Learning during my third year of
Engineering. nowadays, I started actively pursuing a career in Data Science, honing my
technical skills in Python, Data Structures, Database (SQL), and OOP with Java, as well as
my math background in Linear Algebra, Statistics, and Advanced Calculus. I worked on
basic projects like the Titanic project to build foundational skills before embarking on
this credit card fraud detection project.

Exploratory Data Analysis:

To perform my EDA, I posed several questions about the dataset, including the
imbalance in the data, any correlation between the variables, and any unusual
transaction amounts. I used histograms, box plots, scatterplots, time manipulation,
and other techniques to analyze the data. You can view the code for this project on my
GitHub profile: https://github.com/mastersimmi
Upon analyzing the dataset, I decided to avoid altering the data by removing outliers or
reducing skewness using Box-Cox transformation. This was due to the absence of
information on previous processing and the potential impact on the machine learning
model's performance. Instead, I utilized mutual information analysis to enhance my
feature engineering phase by identifying relationships between the features.

I started by reading more about how fraudulent transactions are currently detected and
started posing interesting questions like:

1. How large is the imbalance in the dataset?

2. Is there a time period when fraud transactions happen more commonly?
3. Are the V# features correlated to each other and the target variable?
4. Is there a certain transaction amount that seems ridiculously high which can indicate
whether a transaction is fraudulent?
5. Are there any missing values in any of the columns that are more common in fraudulent
transactions?
Number of Real Transactions vs Fraudulent Transactions over Time (in seconds) I used
techniques like looking at histograms, box plots, and scatterplots, performing time
manipulation, looking at the skewness and the Interquartile Range, etc. To view this
please refer to my GitHub profile: Code for this
project:https://github.com/mastersimmi/CC-JAN-DATA_SCIENCE/tree/main/TASK1-
Credit%20Card%20Fraud%20Detection

Correlation Matrix to see how each variable is related

to the other and the target variable
Conclusion:

This project allowed me to gain a deeper understanding of the financial domain and
tackle a real-world challenge using my technical skills. The experience of working on this
project has fueled my passion for Data Science and Machine Learning, and I look
forward to continuing to grow in this field.