Statistical Modeling of Dynamic Risk in Security Systems

Abstract: Big data has been used regularly in finance and business to build forecasting models. It is, however, a relatively new concept in the security industry. This study predicts technology related alarm codes that will sound in the coming 7 days at location $L$ by observing the past 7 days. Logistic regression and neural networks are applied to solve this problem. Due to the problem being of a multi-labeled nature logistic regression is applied in combination with binary relevance and classifier chains. The models are trained on data that has been labeled with two separate methods, the first method labels the data by only observing location $L$. The second considers $L$ and $L$'s surroundings. As the problem is multi-labeled the labels are likely to be unbalanced, thus a resampling technique, SMOTE, and random over-sampling is applied to increase the frequency of the minority labels. Recall, precision, and F1-score are calculated to evaluate the models. The results show that the second labeling method performs better for all models and that the classifier chains and binary relevance model performed similarly. Resampling the data with the SMOTE technique increases the macro average F1-scores for the binary relevance and classifier chains models, however, the neural networks performance decreases. The SMOTE resampling technique also performs better than random over-sampling. The neural networks model outperforms the other two models on all methods and achieves the highest F1-score.