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Journal : Journal of Computing Theories and Applications

Enhancing the Random Forest Model via Synthetic Minority Oversampling Technique for Credit-Card Fraud Detection Aghware, Fidelis Obukohwo; Ojugo, Arnold Adimabua; Adigwe, Wilfred; Odiakaose, Christopher Chukwufumaya; Ojei, Emma Obiajulu; Ashioba, Nwanze Chukwudi; Okpor, Margareth Dumebi; Geteloma, Victor Ochuko
Journal of Computing Theories and Applications Vol. 1 No. 4 (2024): JCTA 1(4) 2024
Publisher : Universitas Dian Nuswantoro

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.62411/jcta.10323

Abstract

Fraudsters increasingly exploit unauthorized credit card information for financial gain, targeting un-suspecting users, especially as financial institutions expand their services to semi-urban and rural areas. This, in turn, has continued to ripple across society, causing huge financial losses and lowering user trust implications for all cardholders. Thus, banks cum financial institutions are today poised to implement fraud detection schemes. Five algorithms were trained with and without the application of the Synthetic Minority Over-sampling Technique (SMOTE) to assess their performance. These algorithms included Random Forest (RF), K-Nearest Neighbors (KNN), Naïve Bayes (NB), Support Vector Machines (SVM), and Logistic Regression (LR). The methodology was implemented and tested through an API using Flask and Streamlit in Python. Before applying SMOTE, the RF classifier outperformed the others with an accuracy of 0.9802, while the accuracies for LR, KNN, NB, and SVM were 0.9219, 0.9435, 0.9508, and 0.9008, respectively. Conversely, after the application of SMOTE, RF achieved a prediction accuracy of 0.9919, whereas LR, KNN, NB, and SVM attained accuracies of 0.9805, 0.9210, 0.9125, and 0.8145, respectively. These results highlight the effectiveness of combining RF with SMOTE to enhance prediction accuracy in credit card fraud detection.
Effects of Data Resampling on Predicting Customer Churn via a Comparative Tree-based Random Forest and XGBoost Ako, Rita Erhovwo; Aghware, Fidelis Obukohwo; Okpor, Margaret Dumebi; Akazue, Maureen Ifeanyi; Yoro, Rume Elizabeth; Ojugo, Arnold Adimabua; Setiadi, De Rosal Ignatius Moses; Odiakaose, Chris Chukwufunaya; Abere, Reuben Akporube; Emordi, Frances Uche; Geteloma, Victor Ochuko; Ejeh, Patrick Ogholuwarami
Journal of Computing Theories and Applications Vol. 2 No. 1 (2024): JCTA 2(1) 2024
Publisher : Universitas Dian Nuswantoro

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.62411/jcta.10562

Abstract

Customer attrition has become the focus of many businesses today – since the online market space has continued to proffer customers, various choices and alternatives to goods, services, and products for their monies. Businesses must seek to improve value, meet customers' teething demands/needs, enhance their strategies toward customer retention, and better monetize. The study compares the effects of data resampling schemes on predicting customer churn for both Random Forest (RF) and XGBoost ensembles. Data resampling schemes used include: (a) default mode, (b) random-under-sampling RUS, (c) synthetic minority oversampling technique (SMOTE), and (d) SMOTE-edited nearest neighbor (SMOTEEN). Both tree-based ensembles were constructed and trained to assess how well they performed with the chi-square feature selection mode. The result shows that RF achieved F1 0.9898, Accuracy 0.9973, Precision 0.9457, and Recall 0.9698 for the default, RUS, SMOTE, and SMOTEEN resampling, respectively. Xgboost outperformed Random Forest with F1 0.9945, Accuracy 0.9984, Precision 0.9616, and Recall 0.9890 for the default, RUS, SMOTE, and SMOTEEN, respectively. Studies support that the use of SMOTEEN resampling outperforms other schemes; while, it attributed XGBoost enhanced performance to hyper-parameter tuning of its decision trees. Retention strategies of recency-frequency-monetization were used and have been found to curb churn and improve monetization policies that will place business managers ahead of the curve of churning by customers.