Internet banking fraud detection using HMM

Internet banking has their separate account for users and is managed by Banks or retail store. The aim of this paper is to detect and prevent fraud in case of internet banking using Hidden Markov Model algorithm. At the same time, we have tried to ensure that genuine transactions are not rejected by making use of one time password that was generated by the Bank server and sent to the particular customers through SMS to their Mobile number which is registered in the system. Banks are seeking to minimize huge losses through fraud detection and prevention systems. Many different advanced fraud technologies are being applied to fraudulent Internet banking transactions detection and prevention. However, they have no effective detection mechanism to identify legitimate users and trace their unlawful activities. We propose a model to overcome all these difficulties using Hidden Markov Model.