Introduction

An artificial neural network is a computer model that emulates a biological neural

network (Turban, 493). ANN is also referred to as parallel distributed processing, neuro-

computing, and machine learning algorithms. It is composed of processing elements that

have weighted inputs and outputs. Artificial Neural Networks make use of parallel

processing and pattern recognition. The artificial networks are not designed to accurately

do things that humans cannot do well.

Artificial Neural Networks serves many purposes in our everyday lives. It is used

with credit card companies, numerous software companies, banks, airlines, and CPA’s.

These businesses us ANN toward tax fraud, stock trading, airline fare management, and

credit card fraud detection, just to name a few. It is a very practical and useful tool.

How ANN Works

Artificial neural networks are the simple clustering of the primitive artificial

neurons (Klerfors, 2.2.1). These neurons are the processing elements (Turban, 493).

There may be many processing elements (or hidden layers), but there is only one input

layer and output layer. The layers are made up of many neurons that are either from the

outside environment (input) or exchange information with the outside environment

(output).

The inputs are weighted to appropriately represent their values. The output is

computed by summing the weighted inputs, and using a special transfer algorithm to do

the output calculation (Turban, 494). These weights are continuously adjusted by

“training” the network to learn the solution. The brain is taught by repetitive practice.

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The artificial neural networks learn in a similar manner through “machine learning

algorithms” (Klerfors, 2.2.3).

The artificial neural network is trained in three ways; unsupervised learning,

reinforcement learning, and back propagation (Klerfors, 2.2.3). Back propagation is

widely used because it makes use of the two concepts in unsupervised and reinforcement

learning. It adjust it’s weights according to the errors that occur. In unsupervised

learning neurons organize themselves, but the do not have a method to reference to for

errors. Reinforcement learning must have a teacher to review the network results. The

last two methods are poor due to their slowness.

Today, artificial neural computing is done through parallel processing. In parallel

processing, multiple processors take individual tasks called threads and process the data

independently, which allows a computer to split up the tasks effectively. More advanced

versions of parallel processing take several computers and combine them into one logical

computer.

Neural networks are beneficial resources due to their capabilities to interpret data

more like humans. Pattern recognition and understanding incomplete or inaccurate data

as inputs are features that allow neural networks to process data more like human

thoughts. Redundancy in neural networks is an outstanding benefit. If hardware errors or

problems occur with a few of the nodes the system will not stop functioning. Neural

networks are also capable of interpretation of data that is unexpected, which can be quite

helpful in the real world where there are several unknowns.

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 History of Artificial Neural Networks

The purpose of Artificial Neural Networks is to replicate the main feature of the

human brain. The concept of artificial intelligence, or a “machine with a brain” has been

around for a long time. In the past, computers were able to compute mathematical

equations faster than humans, but they were unable to perform complex tasks. The

original objective of ANN’s was the reproduction of human information processing tasks

such as speech, vision and knowledge processing. The inspiration of neural networks

came from the aspiration to produce systems capable of intelligent computations

preformed by the human brain in hopes to shed light on the understanding of the brain.

The idea was to combine the speed of signal transmission in computers with the

complex “design” of the brain, into an Artificial Neural Network. The implementation of

neural networks for brain computations was not made possible until the 1940’s. Some

examples of these were patterns recognition, decision making motory control and many

others.

The original neural network was based on work by Warren McCulloch and Walter

Pitts published in 1943. (Jones) This work included an artificial logical neuron network

model that consisted three types of neurons:

1. Receptor- input neurons, which receive the impulse to fire from a sensor.

2. Central or inner neurons-, which are attached to the receptor and other neurons
and attach onto output and other neurons.

3. Effecter neurons- which receive impulses from both inner neurons and directly
from receptors.

This model was different compared to the characteristics of ANN’s today, although it

gave insight to more complex models that would follow.

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 Ross Ashby of Great Britain in1952 did the first meticulous study of the behavior

of a machine and the living nervous system. Ashby wrote the book Design for a Brain

about the problem of “the problem of how a dynamic system achieves a range of

behaviors which may be said to show stability within the limits of survival for that

dynamic system as well as adaptability to changes in the environment of that system.”

(Jones) Ashby also developed a model call the Homoestatic. This model consisted of a

set of four pivoted magnets and electrical connections. “The effects of the position of

each magnet were routed to the other three magnets via a number of parameter altering

devices, viz. selection switches and motion constraints. With any change in the operating

conditions the positions of the magnets would automatically shift until the original

specified condition of stability was re-established.” (Jones) This machine demonstrated

an operating procedure that he called ultrastability. This model proved that electronics

and machines could work on their own without human assistance, and was the foundation

of Artificial Neural Networks.

Homoestatic Model

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 Major Benefits of ANN

There are many benefits of Artificial Neural Networks. The main benefit of ANN

is problem solving. “Neural networks have the potential to provide some of the human

characteristics of problem solving that are difficult to stimulate using the logical,

analytical techniques of DSS or even expert systems.” (Turban et al. 495) They have the

ability to analyze large amounts of data and to solve complex problems such as systems

control, optimization problems and pattern recognition. Other benefits include

classification, fault tolerance, generalization, adaptability and forecasting.

- With fault tolerance, if there is damage to a few links or nodes, the system

will not shut down. There is room for errors without the fear of losing the

entire system.

- In generalization, if a neural network comes to an incomplete or unknown

input, it will generalize to produce a sufficient response.

- Adaptability allows ANN’s to learn well with new information. The programs

retain the information and updates.

- Historical data gives ANN’s the capabilities to forecast and prepare for the

future.

With the development and advancements of ANN’s everyday, the benefits are

endless. These are just a few of the benefits of ANN.

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 Artificial Neural Networks and Biological Systems

Artificial Neural Networks are computer-based systems, but they are really just

simplified models of the central nervous system. They are composed of networks of

highly interconnected neural computing elements that have the ability to respond to input

stimuli and they are able to adapt to the environment (Patterson, 1). This makes the

artificial neurons very similar to the biological neurons found in the human body.

Much of the research done in artificial neural networks has been inspired and

influenced by current knowledge of biological nervous systems. Scientific understanding

of the mammalian nervous system is far from complete, but some important facts have

been learned by neuroscientists over the past few decades. The basic computing element

in biological systems is the neuron. A neuron is a small cell that receives electrochemical

stimuli from multiple sources and responds by generating impulses that are transmitted to

other neurons. The figure below shows the basic components of a biological neuron

(Klerfors).

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 There are roughly 100,000,000,000 neurons in the human nervous system and

each is capable of storing small amounts of information (Patterson, 6). The constant

stream of impulses sent between the neurons is how information and signals travel

throughout the body.

Artificial neural networks are electronic circuits that closely resemble biological

neural networks and their attributes. The processing element in an artificial neural

network is called an artificial neuron. Artificial neurons simulate the basic functions of

biological neurons. They receive inputs, process the inputs, turn the processed inputs into

outputs, and then send the signal out to other neurons. The figure below shows the basic

components of an artificial neuron (Klerfors).

Artificial neurons may look complex, but they are actually much simpler than

biological neurons. These systems are based on mathematical models that mimic the

functionality of a biological system (Kartalopoulos, 39). A computer can then simulate

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the model fairly quickly. The processing is done by a computer, which means that

calculations will be virtually error free. The model can also be changed to enhance its

performance or to simplify it. This means that artificial neural systems behave as

trainable, adaptive, and self-organizing information systems (Schalkoff, 9). They are

programmed to act a certain way, and then they develop functionality based on training.

Biological networks are able to process millions of input stimuli in

milliseconds (Patterson, 1). This happens even though the processes are electrochemical

in nature and usually transfer at relatively slow millisecond rates. These systems are

actually several orders of magnitude slower than the high speed operations performed by

conventional computers. In spite of the fast processing speed achieved by computers,

artificial neural networks fall far short of the performance exhibited by biological systems

in their processing ability.

Uses of Artificial Neural Networks

Artificial neural networks (ANNs) are around us all. Many people have used this

technology and they do not even know it. It is used by almost everyone in the world;

students, military, doctors, scientist, airport security, and banks, the list goes on and on.

Many businesses use this technology to improve their company anywhere from

protection from fraud to research purposes to customer services. ANNs is widely used in

all types of industries.

Many college students use this technology almost every time when they use a

computer to type a paper. Students usually use some type of word processor (Microsoft

Word) to complete this task. In Microsoft Word, there is a spell check function. When

this function doesn’t recognize a word that the student types, it automatically underlines

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that word to notify the student that there is a spelling error. This is also the same with the

grammar check. When this happens, the student can go to the spell check and see what

this function suggest the misspelled word to be. The system that spell and grammar

check uses is part of the Artificial Neural Networks (Generation5, 2001). Just like a

human being, it knows when a word is misspelled, in most cases; the trained network is a

better speller than the human.

Visa International, a popular credit card company, is one of the companies that

use Artificial Neural Networks. In 1995, Visa lost $655 million to fraud alone (Turban et

al. 496). With this case, they are now using a neural network to recognize fraudulent

activities. This network was trained to notice any activates out of the ordinary. For

example, there’s a person that uses their Visa card once or twice a month, and then all of

a sudden it is used five times in one day, this is where the ANNs goes to work. It

recognizes that the card is being used more often than it usually is. After the network

recognizes this situation, the card will be put on hold, stopping the card from working,

and Visa representatives will contact the owner of the card to see if these transactions are

his or hers.

Another company that uses ANNs for detecting fraud is Admisitacion Nacional

de Telecumincaciones (ANTEL), a telecommunications operator from Uruguay. Its

division ANCEL, which provides A-Band mobile telephone service, shares 60% of the

cellular market in the Uruguay territory and a 57 percent share in geographical areas

(Nortel Networks, 2001). This division started in 1994 and within 3 years of service, the

number of customers grew to 145,000. With this many customers, there is a large chance

of fraud. They looked towards Nortel Networks to set up an Artificial Neural Network

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that was trained to detect these frauds. This network is trained to have a profile of their

customers in their database. Within the profile it shows the amount of activities that

person uses (Nortel Networks, 2001). Just like the network for Visa International, it also

analyzes the data to find unusual activities that occurs. Again, a representative of ANCEL

or ANTEL will contact the customer to see if there is any fraud is taking place.

In 1998, Nortel Networks released a new system called SuperSleuth, a fraud

detection system for wireless operators and telephone companies (Nortel Networks,

2001). These operators at first just avoided the fraud situation. Now with new systems

such as SuperSleuth, they can detect and solve their fraudulent cases. This system creates

calling profiles of the customers, which then the system will analyze their calls in real

time to see if there is any kind of strange activity occurring. The operator analysis is then

alerted of this situation.

Many people and businesses use Artificial Neural Networks. Some people don’t

even realize that they are using it, such as the case of using a word processor’s spell

check. There are many programs are equipment that uses this network. There are even

vacuums that has an Artificial Neural Network. The vacuum is trained to clean a house

or office. At first it makes trial runs in the area, which it is cleaning. After awhile it

learns how big the area is, and which part of the area is the dirtiest (Generation5, 2001).

Some medical doctors use this system to input their patient’s medical records and the

kind of treatment they had. The doctor can go back to the system and ask it if he had

done a particular process and the system will answer back with a “yes” and the treatment

that he did, or just a plain “No” (Generation5, 2001). Artificial Neural Networks is an

important factor of everyday life. It might even save your life one day.

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 Bibliography

1. Jones, Stephen. Neural Networks and the Computational Brain. 30 Jan. 2001
<http://www.culture.com.au/brain_proj/neur_net.htm>

2. Kartalopoulos, Stamatios V. Understanding Neural Networks and Fuzzy Logic: Basic

Concepts and Applications. New York: IEEE Press, 1996.

3. Klerfors, Daniel. Artificial Neural Networks. 25 Jan. 2001

<http://www.hj.se/~de96klda/NeuralNetworks.htm>

4. Patterson, Dan W. Artificial Neural Networks: Theory and Applications. Singapore:

Prentice Hall, 1996.

5. Schalkoff, Robert J. Artificial Neural Networks. New York: McGraw-Hill, 1997.

6. Turban, Efraim., Mclean, Ephraim., Wetherbe, James. Information Technology John

Wiley & Sons, Inc. 2001

7. Generation5: Artificial Intelligence Repository. 2001

http://library.thinkquest.org/18242/index.shtml
http://library.thinkquest.org/18242/app_military.shtml

8. Nortel Networks. 2001 http://www.nortelnetworks.com

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