Siavash A. Bigdeli

Reza E. Fazel, Arash Bakhtiary, Siavash A. Bigdeli

Addressing class imbalance is a central challenge in credit card fraud detection, as it directly impacts predictive reliability in real-world financial systems. To overcome this, the study proposes an enhanced workflow based on the Explainable Boosting Machine (EBM)-a transparent, state-of-the-art implementation of the GA2M algorithm-optimized through systematic hyperparameter tuning, feature selection, and preprocessing refinement. Rather than relying on conventional sampling techniques that may introduce bias or cause information loss, the optimized EBM achieves an effective balance between accuracy and interpretability, enabling precise detection of fraudulent transactions while providing actionable insights into feature importance and interaction effects. Furthermore, the Taguchi method is employed to optimize both the sequence of data scalers and model hyperparameters, ensuring robust, reproducible, and systematically validated performance improvements. Experimental evaluation on benchmark credit card data yields an ROC-AUC of 0.983, surpassing prior EBM baselines (0.975) and outperforming Logistic Regression, Random Forest, XGBoost, and Decision Tree models. These results highlight the potential of interpretable machine learning and data-driven optimization for advancing trustworthy fraud analytics in financial systems.

Frida Jørgensen, Nina Weng, Siavash Bigdeli

Labeling bias arises during data collection due to resource limitations or unconscious bias, leading to unequal label error rates across subgroups or misrepresentation of subgroup prevalence. Most fairness constraints assume training labels reflect the true distribution, rendering them ineffective when labeling bias is present; leaving a challenging question, that \textit{how can we detect such labeling bias?} In this work, we investigate whether influence functions can be used to detect labeling bias. Influence functions estimate how much each training sample affects a model's predictions by leveraging the gradient and Hessian of the loss function -- when labeling errors occur, influence functions can identify wrongly labeled samples in the training set, revealing the underlying failure mode. We develop a sample valuation pipeline and test it first on the MNIST dataset, then scaled to the more complex CheXpert medical imaging dataset. To examine label noise, we introduced controlled errors by flipping 20\% of the labels for one class in the dataset. Using a diagonal Hessian approximation, we demonstrated promising results, successfully detecting nearly 90\% of mislabeled samples in MNIST. On CheXpert, mislabeled samples consistently exhibit higher influence scores. These results highlight the potential of influence functions for identifying label errors.