# Mitigating Explanation Leakage in Financial Fraud Detection Systems

arXiv: https://arxiv.org/abs/2608.22607 · HTML: https://mlsanity.com/paper/2608.22607/

## Key facts

- No citing papers in the map yet (data through 14 Oct 2026).
- Builds on 11 of its 20 references that are in the map.
- First posted on arXiv 23 Aug 2026.

## Builds on (most cited first, 11 of 11)

- [Communication-Efficient Learning of Deep Networks from Decentralized Data](https://mlsanity.com/paper/1602.05629/) (2016)
- [A Unified Approach to Interpreting Model Predictions](https://mlsanity.com/paper/1705.07874/) (2017)
- [XGBoost: A Scalable Tree Boosting System](https://mlsanity.com/paper/1603.02754/) (2016)
- [Optuna: A Next-generation Hyperparameter Optimization Framework](https://mlsanity.com/paper/1907.10902/) (2019)
- [Membership Inference Attacks against Machine Learning Models](https://mlsanity.com/paper/1610.05820/) (2016)
- [Exploiting Unintended Feature Leakage in Collaborative Learning](https://mlsanity.com/paper/1805.04049/) (2018)
- [Differentially Private Federated Learning: A Client Level Perspective](https://mlsanity.com/paper/1712.07557/) (2017)
- [Explainable AI for Trees: From Local Explanations to Global Understanding](https://mlsanity.com/paper/1905.04610/) (2019)
- [The Tradeoff Between Privacy and Accuracy in Anomaly Detection Using Federated XGBoost](https://mlsanity.com/paper/1907.07157/) (2019)
- [A Survey of Privacy-Preserving Model Explanations: Privacy Risks, Attacks, and Countermeasures](https://mlsanity.com/paper/2404.00673/) (2024)
- [Privacy-Preserving Explainable AIoT Application via SHAP Entropy Regularization](https://mlsanity.com/paper/2511.09775/) (2025)

## Abstract (arXiv)

Financial fraud detection relies heavily on centralized machine learning models. This creates serious data privacy risks. Federated Learning (FL) decentralizes data processing, but financial regulations still require models to be transparent. This means using Explainable AI (XAI) tools such as TreeSHAP. Recent cybersecurity research shows a problem with this approach. Sharing high-fidelity SHAP explanations exposes the federated network to Membership Inference Attacks (MIAs). This dissertation proposes and evaluates DP-FedSHAP. It is a new architecture that applies client-level differential privacy only to post-hoc TreeSHAP vectors. It is compared against a Weight-Level DP baseline, which perturbs the trained model directly instead. Using the highly imbalanced IEEE-CIS Fraud Detection dataset, this study measures the trade-off between explanation fidelity, privacy preservation, and the model's Area Under the Precision-Recall Curve (AUPRC).