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arXiv · 2609.37155

Explainable and Trustworthy AI for Anti-Money Laundering: A Graph-based Hybrid Framework for Real-World Financial Crime Detection

Ali Shahbazi·Faraz Sasani·Arshia Hossein zadeh·Sheyda safaeimoradi·Hossein Najafzadeh
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Abstract

Purpose: Money laundering threatens financial systems, while rule-based monitoring suffers from high false-positive rates and limited ability to capture relational transaction patterns. This study proposes an explainable graph-based framework for anti-money laundering (AML) detection that jointly addresses predictive performance, explanation faithfulness, and uncertainty calibration. Methods: Using the IBM Transactions for Anti-Money Laundering (HI-Small) benchmark, comprising 5,078,345 transactions among 518,573 accounts with 0.10% illicit transactions, a directed attributed graph with 4,487,133 edges was constructed using temporal, leakage-safe partitioning. Three GATv2 architectures, BASE, BASE-Large, and IMPROVED, incorporating bidirectional message passing, edge updates, and port-aware features, were compared with XGBoost and Random Forest using identical features. The best model was evaluated using GNNExplainer against documented typologies and Mondrian conformal prediction for uncertainty calibration. Results: IMPROVED achieved the strongest performance (AUPRC = 64.85%, Best F1 = 68.42%), exceeding BASE-Large by 30.65 AUPRC points and XGBoost (AUPRC = 38.46%) by 26.4 points. The proposed mechanisms contributed more than capacity scaling alone. GNNExplainer recovered documented typologies with higher fidelity than attention-weight and random baselines (mean Jaccard overlap: 21.4% vs. 1.0%, p < 0.001). Mondrian conformal prediction achieved coverage close to the 90% nominal target with an average prediction-set size near one. Conclusion: Explicit transaction topology modeling substantially improves AML detection, while faithful explanations and calibrated uncertainty support interpretable, human-in-the-loop compliance decision-making.

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Ali Shahbazi, Faraz Sasani, Arshia Hossein zadeh, Sheyda safaeimoradi, Hossein Najafzadeh. 2026-09-29. Explainable and Trustworthy AI for Anti-Money Laundering: A Graph-based Hybrid Framework for Real-World Financial Crime Detection. https://arxiv.org/abs/2609.37155

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