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A Unified Transformer–BDI Architecture for Financial Fraud Detection: Distributed Knowledge Transfer Across Diverse Datasets

Author

Listed:
  • Parul Dubey

    (Symbiosis Institute of Technology, Nagpur Campus, Symbiosis International (Deemed University), Pune 412115, India)

  • Pushkar Dubey

    (Department of Management, Pandit Sundarlal Sharma (Open) University Chhattisgarh, Bilaspur 495009, India)

  • Pitshou N. Bokoro

    (Department of Electrical Engineering Technology, University of Johannesburg, Johannesburg 2092, South Africa)

Abstract

Financial fraud detection is a critical application area within the broader domains of cybersecurity and intelligent financial analytics. With the growing volume and complexity of digital transactions, the traditional rule-based and shallow learning models often fall short in detecting sophisticated fraud patterns. This study addresses the challenge of accurately identifying fraudulent financial activities, especially in highly imbalanced datasets where fraud instances are rare and often masked by legitimate behavior. The existing models also lack interpretability, limiting their utility in regulated financial environments. Experiments were conducted on three benchmark datasets: IEEE-CIS Fraud Detection, European Credit Card Transactions, and PaySim Mobile Money Simulation, each representing diverse transaction behaviors and data distributions. The proposed methodology integrates a transformer-based encoder, multi-teacher knowledge distillation, and a symbolic belief–desire–intention (BDI) reasoning layer to combine deep feature extraction with interpretable decision making. The novelty of this work lies in the incorporation of cognitive symbolic reasoning into a high-performance learning architecture for fraud detection. The performance was assessed using key metrics, including the F1-score, AUC, precision, recall, inference time, and model size. Results show that the proposed transformer–BDI model outperformed traditional and state-of-the-art baselines across all datasets, achieving improved fraud detection accuracy and interpretability while remaining computationally efficient for real-time deployment.

Suggested Citation

  • Parul Dubey & Pushkar Dubey & Pitshou N. Bokoro, 2025. "A Unified Transformer–BDI Architecture for Financial Fraud Detection: Distributed Knowledge Transfer Across Diverse Datasets," Forecasting, MDPI, vol. 7(2), pages 1-34, June.
  • Handle: RePEc:gam:jforec:v:7:y:2025:i:2:p:31-:d:1682922
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