Cross-Regional Fraud Detection via Continual Learning With Knowledge Transfer

Abstract

Fraud detection poses a fundamental yet challenging problem to mitigate various risks associated with fraudulent activities. However, existing methods are limited by their reliance on static data within single geographical regions, thereby restricting the trained model’s adaptability across different regions. Practically, when enterprises expand their business into new cities or countries, training a new model from scratch can incur high computational costs and lead to catastrophic forgetting (CF). To address these limitations, we propose cross-regional fraud detection as an incremental learning problem, enabling the development of a unified model capable of adapting across diverse regions without suffering from CF. Subsequently, we introduce Cross-Regional Continual Learning (CCL), a novel paradigm that facilitates knowledge transfer and maintains performance when incrementally training models from previously learned regions to new ones. Specifically, CCL utilizes prototype-based knowledge replay for effective knowledge transfer while implementing a parameter smoothing mechanism to alleviate forgetting. Furthermore, we construct heterogeneous trade graphs (HTGs) and leverage graph-based backbones to enhance knowledge representation and facilitate knowledge transfer by uncovering intricate semantics inherent in cross-regional datasets. Extensive experiments demonstrate the superiority of our proposed method over baseline approaches and its substantial improvement in cross-regional fraud detection performance.