Economic and Mathematical Modelling of the Effectiveness of the National System for Combatting Cyber Fraud and Legalisation of Criminal Proceeds Based on Survival Analysis Methods

Abstract

In modern world, the digitalisation of financial relations, the development of innovative technologies, and the emergence and use of cryptocurrencies for payments lead to an increase in the number of cyber frauds in the financial sector and their intellectualisation, increasing the illegal outflow of funds abroad. Ineffective decisions and inaction in counteracting these threats lead to large-scale negative consequences of both financial and social nature. The purpose of this study is to implement economic and mathematical modelling of the effectiveness of the national system for combatting cyber fraud and legalisation of criminal proceeds, which is based on the use of survival analysis methods. The study provides a bibliometric analysis of publications on the effectiveness of cyber fraud and combatting the legalisation of illegal funds, by building a bibliometric map of keywords, using VOSviewer software. This allowed identifying 7 clusters of basic categories of cyber fraud analysis, and changes in the vectors of research scientists showed a visual map of the contextual-temporal measurement of research into the effectiveness of cyber fraud in the publications of the Scopus database. The paper examines the effectiveness of the national system for combatting cyber fraud and money laundering based on survival tables. As a result of the study, the effectiveness of the national system for combatting cyber fraud and money laundering was analysed based on the Kaplan-Meier method. The study identified the dependences of the effectiveness of the national system for combatting cyber fraud and legalisation of criminal proceeds on the time interval after the discovery of violations. The practical value of applying the developed model is to form an analytical basis for further management decisions by the National Bank of Ukraine, the State Financial Monitoring Service, and the Security Service of Ukraine in terms of the effectiveness of the national system to combat cyber fraud and legalisation of criminal proceeds and the need to adjust it

Internal-led cyber frauds in Indian banks: an effective machine learning–based defense system to fraud detection, prioritization and prevention

“…These programs support robust forensic data analytics to identify undesirable behaviors. Such measures aid in curbing financial fraud by helping to investigate fraud, resolve legal and compliance risks within the bank, monitor the illegal behavior of employees, detect theft of critical digital assets, help with risk escalation procedures, develop interfaces for performance improvement, integrate data from social media platforms to gauge potential offender (Ahram et al, 2017;Kuzmenko et al, 2021). A study by (Singh et al, 2022) found that user behavior-based insider threat detection leads to fewer false positives, faster threat detection and significantly higher classifier accuracy.…”

“…Fraud mapping is vital because it offers several advantages, including the following: monitoring for potentially fraudulent and high-risk events (Thomas et al, 2013), calculating transaction risk factors to determine the legitimacy (Adel et al, 2022) and monitoring fraudulent online activities (Kuzmenko et al, 2021), providing alerts and analysis tools for administrators (Hidayati et al, 2021) and facilitating compliance with privacy and security regulations (Kuzmenko et al, 2021), prevent complex fraud and increase coverage (Antje and Gary, 2019). Several qualitative and quantitative methods have historically been applied to mapping the two streams.…”

“…A recent study found that delayed response led to major-value fraud in European, American and Southeast Asian banks (Bendob, 2015; Chen et al. , 2021; Haynes and Robinson, 2015; Kuzmenko et al. , 2021; Zheng, 2017).…”

“…, 2013), calculating transaction risk factors to determine the legitimacy (Adel et al. , 2022) and monitoring fraudulent online activities (Kuzmenko et al. , 2021), providing alerts and analysis tools for administrators (Hidayati et al.…”

“…Banks often find it challenging to recover critical information after a cyber-attack. A recent study found that delayed response led to Effective response system for internal-led cyber frauds major-value fraud in European, American and Southeast Asian banks (Bendob, 2015;Chen et al, 2021;Haynes and Robinson, 2015;Kuzmenko et al, 2021;Zheng, 2017). Banks lose the time between cyber fraud occurrence and detection; thus, any measure intended to curb cyber fraud must emphasize timeliness, which was overlooked in the previous system (Nawaf et al, 2022;Antje and Gary, 2019).…”