How do you generally detect a fraud using analytics?

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There are two broad range of algorithms that can help you detect fraud: 1) classification (supervised) 2) clustering (unsupervised)

Fraud Analytics Anomaly Data Science

Now it’s a fair assumption that fraud is pretty rare and it’s an outlier in your data. In other words, it’s a anomaly and the process of identifying them is called Anomaly Detection.

So under classification, there are algorithms out there specialize in “anomaly” detection like one-class SVM and PCA based anomaly detection. Try them out on your dataset and see if it’s able to capture “anomalies” in your dataset. While you are at it, don’t discount traditional classification algorithms either, they may be useful as well. You will have to train these algorithms and that’s why they are called “supervised”.

There an alternate approach. Which is to use unsupervised algorithms called “clustering” techniques. You could try something as simple as K-means or something more sophisticated. I haven’t used clustering much for solving fraud problems and have usually deferred to anomaly detection algorithms for this. But I am throwing this out there for making sure you know all the options! I can see these algorithms being applied to exploratory analysis where you are just exploring your data to find outliers to study them.

Hope that helps!

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What’s a good chart making software that can pull online data?

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So essentially you want to build a *live* chart that pulls data from some online data-store (which changes often).

To do that you can do one of three things:

  1. See if they have an API that you can use — if so, you should be able to use that. If not, continue reading…
  2. Build a web scraper on your own. There are tutorials out there that would help you do so in the language of your choice.
    Chart web scraping data
  3. Use a software service like Import.io | Web Data Platform & Free Web Scraping Tool or Web Scraper — or you could find something else. I have used Import[dot]io and was able to build an API using their service — which i used a data-store for my “charts”

Side note: just make sure you are not violating any terms by scraping the website.

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Can I be a data analyst at a tech company without a degree in computer science?

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Yes — it’s not a must have to work as a Data Analyst. In fact, a lot of people come from a non-CS background and succeed in this role!

Let’s look at the pros and cons of having a computer science (CS) degree and this should help you evaluate where you fall:

Data Analyst computer science degree

Pros of having a CS-degree:

  • If the data analyst position requires you to have this degree in CS then you qualify! Fortunately this is not that common and usually it says bachelor’s required in cs, business administration or related field so as long as you have bachelors for positions that require it then you should be fine
  • you might already have the basic tech skills that are needed for data analysis jobs and the CS degree might be used to validate that.
  • you can pick up new tech concepts and tools fast(er) — with the cs background, it’s easier to pick up new concepts & tools — and you need to continuously do that to stay relevant.

Cons of having a CS-degree:

  • Not enough business problem solving experience and/or lack depth in business knowledge — so if you have a degree in business then you come ahead! Especially if your background aligns with the role. For example: if you focused on Marketing in your bachelors and the role is focused around marketing analytics then you might have an edge
  • I have a CS degree and then I followed it up with a masters from a “business school” — so this is just based on my experience but few CS students (without real world experience) are inclined to focus on “automation” and “bleeding-edge” instead of focusing on what the problem needs. Lot of data analysis doesn’t need to be automated or shouldn’t be automated and not every company needs <<insert the latest tech trend here: big data, deep learning>> — but CS students tend to do that. That’s what they feel most comfortable with so while that doesn’t stop from getting the job, this would impede their growth as a data analyst within the org.

Conclusion:

So as you can see even if you don’t have a CS degree, you can still find roles that align with your other skills and in fact, you might be able to come out ahead if you can prove that you have basic quantitative and tech skills needed to get the job done.

Related: Paras Doshi’s answer to How do I prepare myself for a career in Data Analysis?

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Book Giveaway: Head First Data Analysis — Ends 07/22/2016

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<< THIS GIVEAWAY IS CLOSED NOW! Thanks for Participating! >>

Head First Data Analysis

Book Giveaway: Head First Data Analysis — A learner’s guide to big numbers, statistics and good decisions!

I love Head First series — if you haven’t read one of these books, you should — it’s great! So when I learned that they had a Data Analysis one, I had to read it. So I bought one and skimmed through it.

Now, Instead of letting it sit on my shelf, I think it might better serve its life purpose if more people read it so I have decided to do this little experiment.

Rules:

  1. You need to have an US-based address so that I can ship it to you (no cost to you!)
  2. You need to comment on this blog post on or before 07/22/2016 — just put your name & email. I’ll contact you if you win*

*Random selection!

Go!

How to create a Histogram in Excel?

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Histogram is a powerful data analysis technique — it let’s you quickly see the distribution of the data you have. So in this post, I am going to list the steps to create histogram in Excel.

It’s a two-step process.

  1. Install “Data Analysis Tool Pak” (free Excel add-in)
  2. Format the data and build the histogram

Step 1: Install Data Analysis Tool Pak.

One of the most useful data analysis add-in in excel is not available by default! It’s called “Analysis ToolPak”

To activate it. Go to File > Excel options > Addins > For the manage field, select Excel add-ins

Histogram Manage Excel add-insMake sure that ToolPak is activated and click OK.

Histogram analysis toolpak excel(Also, Solver is a great add-in as well! It’s not in the scope of this article to discuss that add-in but it’s a powerful add-in as well. For instance, it let’s you work on optimization problems)

Step 2: Format Data and build the Histogram

So now let’s format the data.

You need two things to create a Histogram. 1) Data 2) Range

Here’s an example: (I have about 3000 numbers and need to see the distribution)

You could have other fields on the sheet as well but you need at least the data field. Range is optional but I recommend that you specify the Range so that your histogram would have the bins that you specified — otherwise you could have just used a bar chart!

Note that both of them are numerical.

Data Histogram

Now go to Menu Bar > Data > Data Analysis

Data Analysis HistogramOut of the options available, click on Histogram and select the Input Range and Bin Range > after you’re done, click OK.

Data Analysis Histogram ToolpakYou should see a new worksheet with raw data (ready for charting!). Now, create a Bar chart using the raw data and you have your histogram:

Histogram Excel Data AnalysisConclusion:

In this post I listed the steps you can take to create a Histogram in Excel. Note that there are other options as well — like R (hist function) that let’s you build histogram as well so you do have choice of tools but if you want to stick with excel and it’s good enough then you now know how. Cheers!

Related Post: What is the difference between Histogram & Bar Chart?

What are the reasons why developing a data dictionary is so important?

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data dictionary

Let me first define “Data Dictionary” — It’s a document that lists data fields/metrics and their standardized definition to be used across the org.

The key here is: Standardized.

Imagine this:

Imagine that a management team meeting is going on and you have CEO, VP of Sales, VP of Marketing, CFO, COO among others in the room.

Meeting Agenda: why they didn’t hit the $100M profit goal in the first quarter. So each of them start with the reports they had access to.

VP of Sales says they missed it by $5M

CFO says that they missed it by $9M

COO says that they missed it by $7M

VP of Marketing has three different versions on her report and she is confused!

No ONE talks about the “Why” they missed the goal but instead spends next hour reconciling the numbers!

It was a hypothetical scenario but these things happen all the time! Of course it could be any team meeting and the metric could be something else or it could just that someone is working on something on their own and end up spending a lot of time digging through all the metric definitions and trying to makes sense of it all. This is where data dictionary could help! Let’s take this a step further:

What’s one of the most important characteristic of a good data analysis/science?

It needs to be Actionable.

It needs to help business decision makers take action based on the insights that they found or were shared with them. And before they take that decision, business decision makers need the data they can TRUST!

For data to be trusted, it needs to be understood. It needs to have a definition that everyone agrees upon.

This is what data dictionary is for. It lists data fields/metrics and their standardized definition so that everyone in the org understands what the field/metric means and don’t have to worry about aligning their meaning. They could focus on Analyzing and extracting insights that would change the business and the world!

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How do I get experience as an entry-level Data analyst?

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It’s a three-step process:

  1. Figure out where (location) you want to work and who (company) you want to work for.
  2. Note the “skills” required in job Descriptions at companies in your desired location(s) > find common themes from job descriptions > Pick up those skills if you don’t have them already!
  3. Start Applying!
    • Getting a job is a function of Number of Job Applications and your conversion rate (Offers Received/#of Job Applications). Optimizing # of Job Applications is easy — you just need to apply to as many jobs as you could. To improve conversion rate, you would need to do number of things: clear HR/Culture-fit rounds, clear TECH rounds, create a portfolio of projects to talk about, etc.
    • You could also consider applying for internships to get experience. This should help you land full-time roles.

Related Answer: Paras Doshi’s answer to How do I prepare myself to be a data analyst?

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