Integrated Analysis of Financial Statements and Transactional Behaviour of the Company. Fraudulence Investigation

In the last decade banks ceased to be perceived as intermediaries as part of "deposit issue - getting loan" chain. They started playing significant role in other spheres of human life as well. Banks engage in life and property insurance, establish pension funds, provide accounting and legal services to companies that have settlement accounts in a bank, establish joint ventures with companies from other sectors, develop loyalty program for their clients. More and more people become users of products that banks offered. And the consequence of it has been, on the one hand, acceleration of existing business processes, decrease in transaction costs, growth of business activity, and on the other hand, enormous growth of the volume of information flowing to the bank, and the risks to which it becomes exposed. Among them is dummy nature of legal entities, falsification of reporting, unsecured nature and bad quality of loans being issued, transit transactions, legalisation of the proceeds of crime, theft and channelling out of money. The main objective of this study is to identify various signs of fraud by clients of a bank. This paper deals with many tasks, main of them are formalisation of the notion of fraud through traditional types of risks associated with legal entities – the bank clients. We will analyse over 5 million transactions of 2,000 clients from 10 banks of Russia by applying bank audit standards and machine learning. Probably the most significant global result of the work we have done can be an integrated system of automated financial monitoring of bank counter parties for engaging in fraudulent activity and the development of measures to prevent them.