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What is Anomaly Detection? Types, Models and Examples

  • September 23, 2023
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Bharani Kumar Depuru is a well known IT personality from Hyderabad. He is the Founder and Director of Innodatatics Pvt Ltd and 360DigiTMG. Bharani Kumar is an IIT and ISB alumni with more than 17 years of experience, he held prominent positions in the IT elites like HSBC, ITC Infotech, Infosys, and Deloitte. He is a prevalent IT consultant specializing in Industrial Revolution 4.0 implementation, Data Analytics practice setup, Artificial Intelligence, Big Data Analytics, Industrial IoT, Business Intelligence and Business Management. Bharani Kumar is also the chief trainer at 360DigiTMG with more than Ten years of experience and has been making the IT transition journey easy for his students. 360DigiTMG is at the forefront of delivering quality education, thereby bridging the gap between academia and industry.

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Generative models


Generative models have been around for some time, but it wasn't until recently that they have made a significant impact on our daily lives. ChatGPT and DALL-E by OpenAI are among the most popular models in use, but they are not the only types of generative models available. One particular area where generative models are gaining traction is anomaly detection.

Anomaly detection refers to the process of identifying unusual events or items in a dataset that do not follow the normal pattern of behaviour. It's an essential technique in cybersecurity, fraud detection, and machine vision, among other areas. For instance, detecting dangerous objects in X-ray images at airports is a commonly used example. Anomalies such as guns or knives should be automatically detected, and generative models can help detect them more efficiently.

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So, what exactly are generative models, and why are they relevant when it comes to anomaly detection? In general, generative models are algorithms that generate data that is similar to the training data in some way. In the context of anomaly detection, these models can be useful for identifying an unusual object or behaviour in a dataset.

Generative models can be divided into several categories, including Variational Autoencoders (VAEs) and Generative Adversarial Networks (GANs). Each of these models has different strengths and weaknesses, and the choice of the model to use in a particular context depends on various factors, including the size and complexity of the dataset.

In summary, generative models have numerous applications, including anomaly detection. As technology advances, it's plausible that we'll see more advanced and sophisticated generative models that can tackle real-world issues most efficiently.

Generative models


Figure 1. Examples of X-ray images at control airports.


Anomaly Detection: A Closer Look:

Anomaly detection is the process of identifying unusual events or items in a dataset that do not follow the normal pattern of behavior. It plays a crucial role in many different areas, including cybersecurity, fraud detection, and machine vision. In these contexts, anomalies can be a signal of something dangerous or suspicious, and detecting them can prevent serious harm.

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Detecting anomalies, however, is no easy task. One of the main challenges is that datasets used for anomaly detection are often highly biased towards one class (normal), with a lack of examples from the other class (abnormal). This makes supervised classification, which is commonly used in machine learning, a challenging and time-consuming process since obtaining enough abnormal examples is difficult.

Generative models

The definitions for what constitutes an anomaly are generally broad, and there may not be enough examples available to support them. This leads to class imbalance, where training a classification algorithm with labeled objects from images would result in the misclassification of the less representative class - in this case, anomalies.

This is where generative models come into play. While they were initially popular for producing textured images and text, recent improvements have broadened their application to other areas, including anomaly detection. Generative models are particularly useful in anomaly detection because they can learn from and rely on quality data for accurate detection, solving the class imbalance issue that plagues traditional supervised learning.

Generative models work by generating new examples of data from a given dataset. If an example produced by the model differs significantly from the real data, it is flagged as an anomaly. The two main types of generative models are Variational Autoencoders (VAEs) and Generative Adversarial Networks (GANs).

VAEs are designed to compress data into a lower-dimensional space, where anomalies are easier to spot. They work by encoding the input data into a smaller dimension and then decoding it back into the original form. During training, the model learns to reconstruct the input data as accurately as possible. When the model produces a poor reconstruction, it indicates the presence of an anomaly.

GANs, on the other hand, use two neural networks that work together to generate new data that approximates the real data distribution. In the process of generating new data, GANs can identify data points that fall outside the distribution and flag them as anomalies.

While generative models have shown promising results in detecting anomalies, they are not without their limitations. These models can struggle when dealing with low-dimensional data, and they can replicate biases that exist in the training data. Additionally, generative models can produce false positives or negatives, leading to incorrect classifications.

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In the next section, we will take a deep dive into the applications of generative models in anomaly detection, as well as their advantages and disadvantages.

Types of Generative Models:

There are various types of generative models, but in this section, we will focus on the most commonly used. These models are different algorithms that generate data points from a distribution that captures the patterns of a given dataset.

Generative models
Aspect Variational Autoencoders (VAEs) Generative Adversarial Networks (GANs)
Purpose Encode input data into a lower-dimensional latent space and generate new output by adding random noise to encoding. Generate new data points that resemble training data and distinguish between real and generated data.
Architecture Neural network architecture involving an encoder, latent space, and decoder. Consists of a generator (creates data) and a discriminator (distinguishes real from generated data).
Training Process Encoder: Learns to map input data to the latent space. Decoder: Learns to recreate the original data from latent space. Generator: Learns to produce data that looks similar to training data. Discriminator: Learns to differentiate between real and fake data.
Application in Anomaly Detection Learns a distribution representing normal behavior of data, detects anomalies as data points far from learned distribution. Often used for unsupervised anomaly detection, where anomalies are data points that deviate from the learned distribution.
Main Advantage Can generate new data points while understanding underlying data distribution. Can create highly realistic data and effectively capture complex data distributions.
Main Challenge Difficulty in ensuring the generated data points align with the original data distribution. Finding the right balance between the generator and discriminator to avoid mode collapse.
Anomaly Detection Approach Identifies anomalies as data points significantly different from the learned distribution in latent space. Typically employed in unsupervised learning setups, treating anomalies as deviations from the norm.
Use of Generated Data Generates new data points by sampling from latent space, which can include anomalies. Generated data used to create realistic anomalies, helps identify data points not conforming to the training distribution.

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Generative Models for Anomaly Detection: A Deep Dive:

Generative models are a type of unsupervised learning algorithm that learns to generate new data that is similar to the data it was trained on. In anomaly detection, generative models generate "normal" data and then use statistical techniques to identify data points that differ significantly from the generated data, which are flagged as anomalies. Generative models also use reconstruction error to determine how accurately each input data point can be reconstructed - if the reconstruction error is high, it may indicate the presence of an anomaly.

Generative models such as Variational Autoencoders (VAEs) and Generative Adversarial Networks (GANs) have shown promise in detecting anomalies in various domains such as cybersecurity, fraud detection and machine vision. VAEs and GANs learn to model the underlying probability distribution of the data, making them capable of detecting even subtle changes in the data.

Applications of Generative Models in Anomaly Detection

Generative models can be used to detect anomalies in a wide range of applications. In cybersecurity, they can be used to detect aberrant network connections that signify an intrusion. In fraud detection, they can help identify outliers in financial transactions. In machine vision, generative models can identify subtle changes in medical images that indicate the presence of a disease.

Generative models

Moreover, generative models can also be used in predictive maintenance, enabling companies to predict when machines are likely to fail before they do, thereby minimizing downtime. They can also be used in preventive healthcare, alerting individuals to the presence of abnormalities in their medical data that may otherwise go unnoticed.

Advantages and Disadvantages of Using Generative Models

Advantages of Using Generative Models for Anomaly Detection:
  • Ability to detect subtle changes in the data.
  • Flexibility in detecting anomalies across various domains.
  • Capability to generate synthetic data for augmenting training datasets.
Disadvantages of Using Generative Models for Anomaly Detection:
  • Requires specialized expertise and skilled data scientists for training and interpretation.
  • Reliance on high-quality data for accurate anomaly detection.
  • Time-consuming process of collecting and curating quality data.
  • Lack of transparency in model outputs, raising accountability and trust concerns.

Real-Life Examples of Generative Models for Anomaly Detection

Visium, a data analytics company, has developed an AI-powered solution for Nestlé that uses sound-based machine analytics to detect anomalies and prevent downtime. The company's AI model relies on a denoising autoencoder, which is a simpler architecture than the one used in GANomaly.

Generative models

However, Visium's method is far more complicated than just comparing anomaly scores. The company used both theoretical and practical tools to build an AI model that caters to the specific needs of Nestlé and addresses the challenges of real-life scenarios.

In addition to Visium's solution for Nestlé, there have been other successful implementations of generative models for anomaly detection. For instance, researchers at the University of Warsaw developed a model that uses a combination of VAEs and GANs to detect anomalies in biomedical images with high accuracy and speed. The model reduces the number of false positives and catches rare anomalies that other methods usually miss.

Some researchers have also explored generative models' potential in detecting financial fraud and credit card fraud. A recent study by researchers at the Wuhan University of Technology proposed a novel approach that combines PCA (principal component analysis) and a deep convolutional autoencoder (DCAE) to detect credit card fraud. The model outperformed several benchmark methods and achieved high accuracy.

These real-life examples demonstrate the potential of using generative models for anomaly detection in various domains, from manufacturing and biomedicine to finance and cybersecurity. However, implementing generative models requires skilled data scientists and expertise, high-quality data, and continuous monitoring of the model's performance. As more companies and organizations adopt AI-powered solutions, we can expect to see more advanced and efficient generative models that are tailored to specific domains and problems.


Generative models, led by GANs, have become vital for anomaly detection across domains. Their success relies on expert data analysis, robust data, and vigilant model tracking. Their fusion with supervised learning enhances accuracy, as seen with Visium's sound-based analytics at Nestlé. Despite challenges like bias replication, researchers are actively mitigating issues. As technology advances, we anticipate more sophisticated models addressing real-world problems. Share your feedback in the comments, and feel free to list generative models you know. Your insights are valuable in shaping the ongoing development of these models.

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