🚩 Red Flag: AI-Powered Invoice Fraud Detection

💡 Inspiration

Invoice fraud is a growing problem, costing businesses billions annually due to fake invoices, duplicate payments, and high-risk vendors. Many companies still rely on manual verification, making them vulnerable to fraud. Red Flag was created to automate fraud detection, leveraging AI to analyze invoices and identify risks in real-time.

⚙️ What It Does

📄 File Upload: Supports PDF and text-based invoices for fraud analysis.
🔍 Data Extraction: Reads invoice details like vendor name, total amount, tax, and invoice age.
🤖 AI-Powered Fraud Detection: Uses a trained model to flag high-risk transactions.
🚨 Confidence Scoring: Provides a fraud risk percentage for each invoice.
🌐 User-Friendly Web Interface: Allows businesses to upload invoices and get fraud insights instantly.

🏗️ How We Built It

Tech Stack:

Backend: Flask (Python) with Scikit-Learn (Using Isolation Forest Algorithm) for fraud detection.
Frontend: React + TypeScript for an intuitive user experience.
AI Model: Trained using real and synthetic invoice fraud datasets.
Deployment: Dockerized app, can be cloud-hosted for scalability.

🚧 Challenges We Ran Into

Extracting Text from PDFs: Handling diverse invoice formats was tricky.
AI Model Training: Optimizing fraud detection for minimal false positives.
File Upload Handling: Ensuring smooth API interactions with large files.

🏆 Accomplishments That We're Proud Of

Successfully built an AI model capable of detecting invoice fraud with good accuracy.
Designed a user-friendly interface for fraud detection with real-time results.
Integrated secure file handling and processing for seamless analysis.

📚 What We Learned

AI in fraud detection requires fine-tuning for real-world data.
Handling structured & unstructured invoice data is complex but crucial.
Optimizing backend API calls ensures a fast and smooth user experience.

🔮 What’s Next for Red Flag

✅ Implement OCR processing for scanned invoices.
✅ Enhance fraud detection with real-time anomaly detection.
✅ Expand capabilities with graph-based vendor risk analysis.

🚩 Red Flag ensures businesses stay one step ahead of fraud. Raise the flag before it’s too late! 🚩