Advanced Approaches to Fraud Detection and Financial Risk Mitigation using Intelligent Analytics

Financial fraud is a scheme that can take unlawful financial gain deceptively, while financial risk is exposure to possible losses due to market fluctuations, defaults, or operational failure. The rising digital transactions have made the old detection and deterrent measures obsolete in dealing with emerging threats. This chapter describes some of the new ways in which intelligent analytics, such as artificial intelligence (AI), machine learning, and predictive modeling, can be deployed for fraud detection and financial risk management. The chapter presents the fundamentals of financial risk and fraud, some anomaly detection in real time, and the importance of data preprocessing in risk score derivation. Intelligent system applications within financial institutions, security, privacy, and ethical challenges, and case studies from banking, insurance, and FinTech are analyzed. Finally, emerging technologies, for instance, blockchain and explainable AI, are discussed, establishing a perspective for intelligent, secure, and effective future financial ecosystems.