Chioma Sandra Dike

Posterior Regimes and Latent Deception: Variational Bayesian Inference in Hidden Markov Models for Sequential Fraud Detection in Financial Transactions

We present a three-tier progression of Hidden Markov Models: maximum-likelihood (Baum-Welch), variational Bayesian (VBEM), and a neural variational extension (Neural VBEM), that model each customer's transaction history as a trajectory through a small number of latent behavioural regimes, one of which is empirically id...