A Money Laundering Risk Evaluation Method Based on Decision Tree

2779 Words Jul 10th, 2011 12 Pages
Proceedings of the Sixth International Conference on Machine Learning and Cybernetics, Hong Kong, 19-22 August 2007

A MONEY LAUNDERING RISK EVALUATION METHOD BASED ON DECISION TREE
SU-NAN WANG1, 2, JIAN-GANG YANG1
1

College of Computer Science and Engineering, Zhejiang University, Hangzhou 310027, China 2 Shanghai Pudong Development Bank, Shanghai 200002, China E-MAIL: wangsn@spdb.com.cn, yangjg@cs.zju.edu.cn

Abstract:
Money laundering (ML) involves moving illicit funds, which may be linked to drug trafficking or organized crime, through a series of transactions or accounts to disguise origin or ownership. China is facing severe challenge on money laundering with an estimated 200 billion RMB laundered annually. Decision tree
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Rules are thus can be extracted from the root to some leaf node. Each path from root to node provides one classification rules of the examples. In this paper, the risk rank is used in to determine the possibility that the customer launder money use the bank products and services.

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Proceedings of the Sixth International Conference on Machine Learning and Cybernetics, Hong Kong, 19-22 August 2007 2. Our approach of a decision tree method for the customer assessment Table 1. The customer data with AML composite risk ID Industry Location Busiz Prods Risk X530X IT Beijing Large All M X624X Domestic trade Beijing Small All M X983X Agriculture Harbin Middle S/I L X634X Domestic trade Jiangsu Middle All M X382X Manufacture Fujian Middle D M X054X Agriculture Shandong Small S/I L X801X Manufacture Hunan Large All L X669X Foreign trade Guangdong Small ALL H X903X Retail Guangdong Small D H X957X IT Sichuan Middle D L X547X Trade Xi 'an Middle All M X228X Telecom Trade Guangdong Middle D/S H X318X Auto sales Shandong Middle D/S M X196X Manufacture Xi 'an Listed D/S M X252X Manufacture Hebei Small All L X227X Medicine Shanghai Middle S/I M X284X Manufacture Jiangsu Listed D M X625X Foreign Trade Guangdong Large All H X613X Hi-Tech/Trade Shanghai Small D/S H X898X Foreign Trade Shanghai Small

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