Real-Time Fraud Detection for a Mid-Sized Financial Services Company

A financial services company in the U.S. was facing rising fraud incidents across its digital payment products. Their existing fraud detection system was rule-based, reactive, and unable to handle increasing transaction volume in real time. They needed a scalable, modernized approach.

Challenge:
False positives were frustrating customers, while sophisticated fraud patterns were slipping through undetected. Manual reviews delayed incident resolution, and compliance auditors flagged concerns about response time and traceability.

Solution:

We designed and deployed a real-time fraud detection system powered by machine learning. Our solution used a layered approach combining:

• Historical transaction data and account activity logs

• Real-time stream ingestion via Apache Kafka

• Feature engineering for velocity checks, geolocation mismatches, account behavior shifts

• A hybrid ML model: logistic regression for interpretability + isolation forest for anomaly detection

• Alerting pipeline that surfaced high-confidence events to analysts through a secure dashboard

The system was deployed in a cloud-native environment (AWS) with autoscaling, secure access controls, and audit logging to meet industry compliance requirements. We also created a retraining pipeline triggered by confirmed fraud/non-fraud labels from analysts, enabling the system to learn from false positives and missed cases over time.

Impact:

• 40% more fraud cases detected vs. the prior rules-based engine

• Detection latency reduced from minutes to under 10 seconds per transaction

• 50% decrease in analyst case volume, as the system filtered out low-risk activity

• Improved compliance posture, with full model traceability and reporting built-in

• Future-ready foundation for deploying AI to credit risk modeling, loan approvals, and churn analysis

This engagement gave the financial firm the agility to respond to fraud in real time, with explainable AI outputs and scalable infrastructure designed to evolve with their growth.