Machine learning architectures for financial fraud detection: Leveraging isolation forest and graph neural networks

Bolla, Sreepal Reddy (2025) Machine learning architectures for financial fraud detection: Leveraging isolation forest and graph neural networks. Global Journal of Engineering and Technology Advances, 23 (2). pp. 175-184. ISSN 2582-5003

This article examines the transformative impact of artificial intelligence on fraud detection and compliance monitoring in the financial sector. The article investigates how advanced machine learning techniques, particularly Isolation Forest algorithms and Graph Neural Networks, enable financial institutions to identify suspicious patterns and anomalies in transaction data that traditional rule-based systems often miss. The article presents a comprehensive framework for implementing AI-driven fraud detection systems that balance detection accuracy with computational efficiency while addressing the challenges of model explainability and regulatory compliance. Through multiple case studies across banking, insurance, and cross-border transactions, we demonstrate how these technologies significantly enhance detection capabilities while reducing false positives. The article also explores the ethical and regulatory considerations surrounding AI deployment in financial compliance, proposing guidelines for responsible implementation that maintain privacy protections while satisfying regulatory requirements. The article suggests that properly implemented AI methodologies represent a substantial advancement in the financial industry's ability to combat increasingly sophisticated fraud schemes while streamlining compliance processes.