English

A Dual-Path Generative Framework for Zero-Day Fraud Detection in Banking Systems

Artificial Intelligence 2026-03-17 v1 Cryptography and Security

Abstract

High-frequency banking environments face a critical trade-off between low-latency fraud detection and the regulatory explainability demanded by GDPR. Traditional rule-based and discriminative models struggle with "zero-day" attacks due to extreme class imbalance and the lack of historical precedents. This paper proposes a Dual-Path Generative Framework that decouples real-time anomaly detection from offline adversarial training. The architecture employs a Variational Autoencoder (VAE) to establish a legitimate transaction manifold based on reconstruction error, ensuring <50ms inference latency. In parallel, an asynchronous Wasserstein GAN with Gradient Penalty (WGAN-GP) synthesizes high-entropy fraudulent scenarios to stress-test the detection boundaries. Crucially, to address the non-differentiability of discrete banking data (e.g., Merchant Category Codes), we integrate a Gumbel-Softmax estimator. Furthermore, we introduce a trigger-based explainability mechanism where SHAP (Shapley Additive Explanations) is activated only for high-uncertainty transactions, reconciling the computational cost of XAI with real-time throughput requirements.

Keywords

Cite

@article{arxiv.2603.13237,
  title  = {A Dual-Path Generative Framework for Zero-Day Fraud Detection in Banking Systems},
  author = {Nasim Abdirahman Ismail and Enis Karaarslan},
  journal= {arXiv preprint arXiv:2603.13237},
  year   = {2026}
}
R2 v1 2026-07-01T11:18:53.297Z