Posterior Regimes and Latent Deception: Variational Bayesian Inference in Hidden Markov Models for Sequential Fraud Detection in Financial Transactions

Joseph Uririoghene Obukofe, Anthony O'Hare, Chioma Sandra Dike

We present a three-tier progression of Hidden Markov Models: maximum-likelihood (Baum-Welch), variational Bayesian (VBEM), and a neural variational extension (Neural VBEM), that mo…