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Federated Fraud Detection with PyTorch
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A privacy-preserving fraud detection system is simulated using Federated Learning, allowing ten independent banks to train local fraud-detection models on imbalanced transaction data. The system utilizes a FedAvg aggregation loop to improve a global model without sharing raw transaction data between clients. OpenAI is integrated to provide post-training analysis and risk-oriented reporting, transforming federated learning outputs into actionable insights. This approach emphasizes privacy, simplicity, and real-world applicability, offering a practical blueprint for experimenting with federated fraud models. Understanding and implementing such systems is crucial for enhancing fraud detection while maintaining data privacy.
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