Blockchain and Machine Learning for Fraud Detection: A Privacy-Preserving and Adaptive Incentive Based Approach

Financial fraud cases are on the rise even with the current technological advancements. Due to the lack of inter-organization synergy and because of privacy concerns, authentic financial transaction data is rarely available. On the other hand, data-driven technologies like machine learning need authentic data to perform precisely in real-world systems. This study proposes a blockchain and smart contract-based approach to achieve robust Machine Learning (ML) algorithm for e-commerce fraud detection by facilitating inter-organizational collaboration. The proposed method uses blockchain to secure the privacy of the data. Smart contract deployed inside the network fully automates the system. An ML model is incrementally upgraded from collaborative data provided by the organizations connected to the blockchain. To incentivize the organizations, we have introduced…