Using Data Mining to Catch Suspected Financial Wrongdoers
The Federal Reserve Bank of Atlanta’s Portals and Rails blogs the seemingly inconsequential disclosure of a phone number or ZIP code to a store clerk can ultimately end up far away from where it was first shared, especially if it is used for data mining purposes. Data mining is the use of computer-based analytic tools that sift through large collections of data searching for patterns based on statistical techniques. The information collected and stored in large databases can be used to detect suspicious spending patterns or to uncover improper spending of federal relief funds. Often, the results of the analysis lead to the detection of overall trends or patterns that reveal unusual activity and other specific parameters. While some data mining techniques are used to help with national security, others are in place to help combat financial fraud.
