Fraud Detection through Visualization

Using diagram visualization techniques to identify and highlight fraud schemes in graph and network data

What is Fraud Detection?

Fraud refers to the abuse of the assets of an organization, company, or person to make a profit. Depending on the relation of the fraudster with the company, fraud is either called internal or external. Internal fraud refers to the fraud committed by someone inside the company, while external fraud refers to fraud by outsiders. The most important fraud schemes include financial fraud, client/consumer fraud, occupational fraud, health-care/insurance fraud, vendor/third-party fraud, or misconduct.

Fraud Detection Schemes
Some important fraud schemes

Many companies worldwide become victims of fraudsters even though most of them tend to believe that fraud is something that “could not happen to them”. In general, most fraud cases are not identified immediately, but only after remarkable damage has been caused. Unfortunately, this damage does not limit only on a severe economic loss but also invokes other liability issues towards clients, employees, financial institutions, and many other involved entities. Thus, it is fundamental to be able to identify fraud cases immediately and respond quickly.

Fraud detection refers to all methods and techniques applied for the identification of potential fraud cases, their investigation to determine whether the identified cases are actual fraud cases or not, and the response to them. Unfortunately, there exist a lot of different types of fraud and no unique mechanism that can identify all of them. Thus, auditors have to develop separate strategies to combat each type of fraud.

Advantages of Visualizations in Fraud Detection

The detection of fraud schemes requires an investigation of a vast amount of data that stems from many different anti-fraud systems with varying types of data. The auditors have to combine all the data and use statistical methods to uncover suspicious claims, which is time-consuming and inefficient in most cases.

Visualizations, on the other hand, can enhance the quick identification of relationships and significant structures and the detection of suspicious patterns that may hide in the amount of data. Besides the visual exploration, interaction with the data allows for a deeper understanding of the dependencies within the data changing over time.

Fraud Detection

A typical pattern is the so-called fraud ring, i.e., several persons with specific properties that are involved in a series of events. For example, for fraud schemes like insurance fraud or first-party bank fraud, auditors look for potential fraud rings. These structures are perceivable in a suitable visual representation like a diagram. Therefore, it is easier to detected fraud cases through visualization rather than when trying to dig into a large number of database raws.

Challenges of Visualizations in Fraud Detection

One of the most challenging tasks when using visualization for fraud detection is the sheer amount of data that is usually obtained by auditing systems. First, the auditor has to retrieve the data from the auditing system.

First-Party Bank Fraud Example
Structuring large diagrams can be a challenging task

Visualizing such a large amount of data is the next challenge: the data needs a meaningful arrangement to create a human-readable representation. Providing suitable styling should enable users to identify different types of entities and relations.

Furthermore, high performance is essential to allow for interactive exploration of the data utilizing the benefits of graph database visualization.

How to Create Visualizations for Fraud Detection?

Since there exist a lot of different types of fraud schemes, it is clear that there is no unique solution that can detect all of them. Thus, a visualization meant to fight against fraud has to be adaptive to the needs of each auditor.

At first, it must not limit to a specific amount or type of data since the volume of the investigated data grows exponentially and comes from different sources. In some cases, it is also necessary to be able to support and visualize time-dependent data.

A sophisticated visualization should also provide the means for arranging the elements with multiple ways on the screen, i.e., using arrangements that reveal clusters or others that highlight hierarchical structures. Additionally, more sophisticated graph analysis algorithms should be supported for the detection of fraud schemes, e.g., cycle detection, or shortest paths.

Regarding the representation of the elements of the visualization, an auditor should be able to customize the look and feel of the graph elements based on his/her needs and be able to display additional properties of the graph elements. Finally, interaction is one of the essential operations when visualizing fraud data since it allows the auditor to explore its dataset.

Sophisticated Visualization of Fraud Detection using yFiles

A comprehensive visualization solution provides solutions for all the features discussed above should enable the auditors to gain more insight into the stored data. It can be tailored to specific requirements related to element visualization, element arrangement, or interactions.

Building such a visualization from scratch can be a challenging task. However, developers can save a lot of money, time, and workforce by using a software library that provides ready-to-use components for this task.

yFiles is a commercial programming library designed explicitly for diagram visualization and is a perfect fit for the challenges of fraud detection. The sophisticated layout algorithms of yFiles can comfortably transform the data in a readable, pleasing, and informative network. The different layout styles enable the user to intuitively identify structural characteristics of the data, such as cycles, connected components, or hierarchies.

Organic Layout
Figure 1. Organic Layout
Radial Layout
Figure 2. Radial Layout
Hierarchic Layout
Figure 3. Hierarchic Layout
Orthogonal Layout
Figure 4. Orthogonal Layout

Furthermore, yFiles comes with a multiplicity of graph analysis algorithms, e.g., cycle detection, centrality, clustering, and path algorithms, that can be applied to the data model to add more value to the data. The auditors can also implement custom fraud detection algorithms and integrate them easily with their visualizations.

An interactive application should provide much more functionality than a simple static representation. yFiles delivers a set of interactive features like:

  • Filtering reduces the number of displayed entities without any additional database queries.

  • Drill down helps to explore specific parts of the data.

  • Interactive modification of the graph using the mouse, the keyboard, and touch gestures help to explore the data.

  • Animations provide a pleasant user experience and help track structural changes.

  • Grouping combines similar or related items to reduce visual complexity.

yFiles comes with predefined styles that render graph elements and offer a broad set of properties to tailor the styling of graph elements for a specific use case or branding. It also supports creating an entirely custom visualization that fits the given data perfectly.

Examples and Source Code

With yFiles, fraud detection diagrams can be realized on all supported platforms. yFiles for HTML comes with a Fraud Detection Sample Application. This example provides a visualization of time-dependent data for the investigation of two different fraud schemes: first-party bank fraud and insurance fraud.

The source code of the Fraud Detection Sample Application is available on the yWorks Github repository and part of the yFiles for HTML package.

Why yFiles?

Most complete solution

Since 2000, yWorks is dedicated to the creation of professional graph and diagramming software libraries. yWorks enables clients to realize even the most sophisticated visualization requirements to help them gain insights into their connected data. The yFiles family of software programming libraries is the most advanced and complete solution available on the market, supporting the broadest range of platforms, integrations, input methods, data sources, backends, IDEs, and programming languages.

Perfect match for all use-cases

yFiles not only lets you create your own customized applications but integrates well with your existing solutions and dashboards on the desktop, on mobile, and on the web. Developers can use concise, rich, complete APIs to create fresh, new applications and user experiences that match your corporate identity and exactly fit your specific use-cases. Browse and choose from hundreds of source code demos and integrations to get ideas and get started in no time.

Honest, simple licensing

yFiles enables white-label integrations into your applications, with royalty-free and perpetual licensing. There are no third party code dependencies.

Industry-leading automatic layouts

yFiles has got you covered with a complete set of fully configurable, extensible automatic layout algorithms, that not merely render the elements on the screen but help users understand their data and the relationships just by looking at the diagrams.

Unmatched customizability

Decades of work went into the creation of the most flexible, extensible, and easy to use diagramming APIs that are available on the market. Everything may be customized with yFiles: data acquisition and import, graph creation, display, interaction, animation, layout, export, printing, and third party service connectivity.

Algorithms included

With yFiles, you can analyze your graphs, connected data, and networks both on the fly and interactively with a complete set of efficient graph algorithm implementations. Calculate centrality measures, perform automatic clustering, calculate flows, run reachability algorithms, find paths, cycles, and dependencies. For the best user experience, use the results to drive the visualization, interactivity, and layout.

Unequaled developer productivity

Developers quickly create sophisticated diagramming applications with yFiles. The extensive API has been carefully designed and thoroughly documented. There are developers’ guides, source code tutorials, getting started videos, and fully documented source code demo applications, that help to realize even the most advanced features. Inline API documentation lookup for all major IDEs with hundreds of code snippets and linked related topics make writing robust code a breeze. Integration samples for many major third party systems help in getting productive, quickly.

Not just a static viewer

With yFiles, you can do more than just analyze and view your data. Create interactive, deeply integrated apps that don’t just let you consume data sources, but also enable users to create, modify, and work with both existing and changing data. Integrate with third party services to automatically trigger actions and apply updates. With yFiles, there are no limits: you decide what your app can do.

High-performance implementations

While it is recommended not to overwhelm the end-user with overly complex graph visualizations, of course, all aspects of the library have been prepared to work with large amounts of data. Developers can create both high-quality diagram visualizations and rich user-interactions, as well as configure algorithms and visualizations to perform great for even the largest graphs and networks.

Generic data acquisition

You don’t need to let your users create the diagrams from scratch or use a particular file format. yFiles enables you to import graphs from any data source which is accessible via an API. Programmatically build the in-memory model using an intuitive, powerful API. Update the diagram live in response to external events and changes.

World-class support

Get the best support for your development teams. Directly connect with more than a dozen core yFiles library developers to get answers to your questions. If you don’t have the time to do the implementation or your team is not large enough to do the implementation, let yWorks help you with consultancy and project work to get your team and apps up running, quickly.

Proven solution

Customers from all industries all over the world have been using yFiles for almost twenty years for both internal and customer-facing applications and tools. See the references for a non-conclusive list.

Frequently Asked Questions

What is yFiles?

yFiles is a software library that supports visualizing, editing, and analyzing graphs and graph-like diagrams. It is not a ready-to-use application or graph editor. Instead, it provides a component for graph visualization, graph editor features, and an extensive set of algorithms for automatic data arrangement and graph analysis. Software developers can use yFiles to display, edit, and analyze diagrams in their own applications. yFiles is available for many platforms.

Which platforms does yFiles support?

Right now, yFiles supports HTML / JavaScript, Java (Swing), JavaFX, .NET (WinForms), and WPF.

What kind of applications can I create with yFiles?

Developers can use concise, rich, complete APIs to create fresh, new applications, and user-experiences that match your corporate identity and exactly fit your specific use-cases. yFiles enables white-label integrations into your applications, with royalty-free and perpetual licensing. Any application that works with or displays relational data in the form of graphs, diagrams, and networks can be built with the help of yFiles.

What devices can I target with yFiles?

yFiles not only lets you create your own customized applications but integrates well with your existing solutions and dashboards on the desktop, mobile, and the web. There are versions of yFiles available for all major platforms and frameworks.

How extensive is the graph API of yFiles?

yFiles offers the most extensive graph layout, visualization, and analysis APIs available commercially. In total, there are around ten thousand public API members (classes, properties, methods, interfaces, enumerations). yFiles uses a clean, consistent, mostly object-oriented architecture that enables users to customize and (re-) use the available functionality to a great extent. API components can be (re-)combined, extended, configured, reused, and modified to a very high degree. It is not mandatory to know the complete API, of course. Most applications only require a minimal subset of the full functionality, and the advanced functionality and APIs may only be required for implementing unique requirements.

As a developer, what can I expect from yFiles?

yFiles helps developers quickly create sophisticated diagramming applications. The extensive API has been carefully designed and thoroughly documented. There are developers’ guides, source code tutorials, and fully documented complete source code demo applications that help to realize even the most advanced features. Inline API documentation lookup for all major IDEs with hundreds of code snippets and linked related topics help in writing robust code, efficiently. Integration samples for many major third party systems help in getting productive, quickly.

Is yFiles Free?

No. yFiles is a commercial software library. If you decide to use yFiles in your application, you’ll have to pay a one-time fee. You also have the option to subscribe annually for technical support and updates.

How does the licensing work for yFiles?

yFiles enables white-label integrations into your applications, with royalty-free and perpetual licensing. There are no third party code dependencies. Licensing basically works on a per developer basis. Please refer to the pricing information and software license agreements of the respective product for more details.

What kind of support can I get for yFiles?

The yFiles libraries come with fully documented demo applications, detailed API documentation, and extensive developers’ guides. Apart from that, yWorks also offers professional support services for your development teams. They can connect directly with more than a dozen core yFiles library developers to get answers to their programming questions. Optionally, if you don’t have the time or necessary team, yWorks can help you with consultancy and project work to get you and your apps up running quickly.

How is the release cycle for yFiles?

There is no public roadmap for yFiles. yFiles usually gets a new major feature release about every 10 to 15 months, with bugfixes or minor maintenance releases in between as required. Typically there are between one and five bugfix releases for each major release, and previous releases get important bugfixes, too. yWorks tries very hard to keep the libraries and APIs backward compatible so that customers can update to the newest version of yFiles regularly with little to no effort and still benefit from performance improvements and new features.

Can I edit my graphs with yFiles?

With yFiles, you can do more than just analyze and view your data. You can have interactive, deeply integrated apps that don’t just let you consume data sources but also enable users to create from scratch, modify, and work with both existing and changing data. Integrate with third party services to automatically trigger actions and apply updates in real-time and publish changes to third party systems while the user works with the graph. It’s up to you to decide what your app can do.

What kind of layouts does yFiles support?

yFiles comes with the most extensive set of fully configurable, extensible automatic layout algorithms, that not merely render the elements on the screen but help users understand their data and the relationships just by looking at the diagrams. yFiles includes hierarchic, organic (force-directed), orthogonal, tree-like, radial, balloon-like, and special purpose layouts. yFiles also supports incremental, partial, and interactive layouts, as well as various edge routing and automatic label placement algorithms.

Are the layout algorithms configurable?

Layout algorithms support various settings and constraints and are fully customizable in code. They support different node sizes, nested groups, bundled edges, orthogonally and octilinearly routed edges, consider and automatically place node, edge, and port labels. Nodes may be partitioned and clustered, and different layout styles can be mixed in the same diagram.

What kind of graph analysis does yFiles support?

yFiles lets you analyze your graphs, connected data, and networks both on the fly and interactively with a complete set of efficient graph algorithm implementations. Choose from a range of different centrality measure implementations, automatic clustering algorithms, network flow algorithms, reachability and connectivity algorithms, pathfinding variants, cycle, and dependency analysis algorithms. For the best user experience, use the results to drive the visualization, interactivity, and layout.

What parts of yFiles can be customized?

yFiles has the most flexible, extensible, and easy to use diagramming APIs that are available commercially. Every aspect of the functionality is customizable with options ranging from high-level configuration settings, down to low-level implementation overrides: data acquisition, import, graph creation, display, interaction, animation, layout, export, printing, and third party service connectivity.

How can I get my data into yFiles?

End-users don’t need to create the diagrams from sketch or use a specific file format. yFiles lets you import graphs from any data source that is accessible via an API. Developers can populate the in-memory model using an intuitive, powerful API, directly connecting to their preferred data sources. Diagrams can be updated live in response to external events and changes.

How can I get my diagrams data back from yFiles?

The in-memory graph model lets you export all the information to any system and file format. There are built-in export options to various file and image formats, but as a developer, you can create your own glue code to connect to arbitrary data storage systems and third party services.

Is the diagram size limited?

Theoretically, the only limiting factor for the number of graph elements is the size of the computer’s memory. In practice, performance is also a limiting factor. For the vast majority of use-cases, yFiles delivers best-in-class performance out-of-the-box. For very large visualizations and data-sets, there are options available that let developers tune between features, running-time, and quality of the results. yFiles can deal with graphs of any size and is only bound by the memory available and the runtime complexity of the algorithms. Large graphs may require adjusting the default settings and performance depends on more than just the number of elements in the diagram, but also the structure of the graph, the algorithm and configuration, as well as platform and hardware capabilities.

Who is using yFiles, already?

Customers from almost all industries all over the planet have been using yFiles for nearly twenty years, to create both internal and customer-facing applications and tools. Clients include both single developers and the largest corporations and organizations in all of academia, public and governmental services, and of course, the commercial space. See the references for a non-conclusive list. Naturally, there are the big well-known software corporations among yWorks’ customers (unfortunately only some of them allow yWorks to list them on the references page), but there’s also a great lot of companies that are not traditionally known for software, but who still have their own IT departments create software for their intranet or customer-facing applications. And last but not least, smaller companies without IT departments that let third party implementors create useful diagramming applications with the help of yFiles for them. yFiles at its core is a generic diagramming component that is use-case agnostic and can be used to create graph and diagramming-centric applications for any business domain that requires working with or displaying connected data.

How long did it take to implement yFiles?

yFiles started as a university project at the University of Tübingen in the late 1990s. Since 2000, yWorks has taken over all development and has been working continuously with a core layout-team of two to eight developers on improving the layout algorithms. The layout algorithms alone, as of 2019, took more than sixty development years to implement. A team of more than 20 developers has been working on the implementation for the visualization and interaction and the support for the various platforms yFiles supports, totaling in more than a hundred years of development for the visualization. Porting yFiles to a new platform in the past took between three and about 15 development years. Most platform variations were implemented in between six and ten calendar months.

How long has yFiles been around?

yFiles started as a university project at the University of Tübingen in the late 1990s. The company yWorks was founded as a spin-off of the university in 2000 when the first commercial customers wanted a license for yFiles. Since then, it has been developing and improving the library. It all started as a Java library, and over time, yWorks improved and even rewrote large parts of the library to add new features and support new platforms.

Who is the company behind yFiles?

yWorks is the company behind yFiles. It was founded as a spin-off of the University of Tübingen in the year 2000 specifically for licensing and supporting yFiles commercially. The German company is a privately-held, headquartered in Tübingen. More than 25 employees are working at yWorks, about 20 of which are developers, working on yFiles and the tooling around the libraries. The library developers also provide support and implementation services to yFiles customers. So as a developer, you will get first-class, highest level support directly from the team that implements the libraries.

What does yWorks specialize in?

Since 2000, yWorks is dedicated to the creation of professional graph and diagramming software libraries. The software yWorks creates, enables customers to realize even the most sophisticated visualization requirements to help them gain insights into their connected data. Their main product is the software programming library family yFiles, which is the most sophisticated and complete solution available for diagramming applications on the market, supporting the broadest range of platforms, integrations, input methods, data sources, backends, IDEs, and programming languages. yWorks has set a track-record in providing the most extensive layout and diagramming solutions for developers on all major platforms. In addition to creating, maintaining and supporting the libraries, yWorks also provides professional consultancy services in the area of visualization and diagramming. In addition to that, yWorks also provides a set of smaller software tools, both free and commercial, end-user facing and for software developers, closed-source and open-source.

Does yWorks own all the intellectual property for yFiles?

yFiles does not depend on any third party library, except of course at runtime, where it depends on the runtime of the platform. yWorks owns the IP for all implementations in the core yFiles library. Some demos show the integration and make use of third party software, but they are not required for other cases.

Which papers and algorithms does yFiles implement?

The list of algorithms implemented by yFiles is long. For the common graph algorithms, we use the traditional implementations with the standard optimizations. For many of the layout algorithms, ideas for the implementation base on publicly available papers. Some algorithms (specifically the orthogonal layout and the balloon layout) we created and helped with the creation of the algorithms and (co-)published the papers for the algorithms. Most layout algorithms have been vastly modified, tuned, and enhanced, though, and don’t follow the original implementation ideas, anymore. yWorks added useful features to these implementations to make the algorithms work in less theoretical environments. We removed previously existing constraints of the original implementations and added new ideas to make the algorithms useful for real-world usage. For most of these changes and improvements, no papers have been published.

Can I get the papers for the layout algorithms used in yFiles?

For some of the algorithms, you will find papers that describe the core idea of the layout algorithms. For most algorithms, yWorks massively enhanced and modified the algorithms to support more advanced features that are frequently required in real-world diagrams. For these modifications, we did not publish any papers. As a commercial yFiles customer, you can obtain a license to the source code of yFiles where you can read, learn about, and modify the algorithms in documented source code form, according to the license terms.

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