Efficient Densest Flow Queries in Transaction Flow Networks (Complete Version)

TL;DR

This paper introduces an efficient algorithm for identifying densest flow subgraphs in transaction networks, crucial for fraud detection, with industry validation demonstrating significant performance improvements.

Contribution

It proposes the \\(S\\-\\)\\(T\\) densest flow query, proves its NP-hardness, and develops the CONAN divide-and-conquer algorithm with an approximate flow-peeling method for scalable fraud detection.

Findings

CONAN outperforms baseline methods by up to 1000x in runtime.

The approach effectively detects fraudulent dense flows in real-world transaction networks.

Applied in industry, it significantly improves fraud detection accuracy.

Abstract

Transaction flow networks are crucial in detecting illicit activities such as wash trading, credit card fraud, cashback arbitrage fraud, and money laundering. \revise{Our collaborator, Grab, a leader in digital payments in Southeast Asia, faces increasingly sophisticated fraud patterns in its transaction flow networks. In industry settings such as Grab's fraud detection pipeline, identifying fraudulent activities heavily relies on detecting dense flows within transaction networks. Motivated by this practical foundation,} we propose the \emph{\(S\)-\(T\) densest flow} (\SDMF{}) query. Given a transaction flow network \( G \), a source set \( \Src \), a sink set \( \Dst \), and a size threshold \( k \), the query outputs subsets \( \Src' \subseteq \Src \) and \( \Dst' \subseteq \Dst \) such that the maximum flow from \( \Src' \) to \( \Dst' \) is densest, with \(|\Src' \cup \Dst'| \geq k\). Recognizing the NP-hardness of the \SDMF{} query, we develop an efficient divide-and-conquer algorithm, CONAN. \revise{Driven by industry needs for scalable and efficient solutions}, we introduce an approximate flow-peeling algorithm to optimize the performance of CONAN, enhancing its efficiency in processing large transaction networks. \revise{Our approach has been integrated into Grab's fraud detection scenario, resulting in significant improvements in identifying fraudulent activities.} Experiments show that CONAN outperforms baseline methods by up to three orders of magnitude in runtime and more effectively identifies the densest flows. We showcase CONAN's applications in fraud detection on transaction flow networks from our industry partner, Grab, and on non-fungible tokens (NFTs).