The global fraud detection and prevention market size is anticipated to reach USD 56.56 billion by the year 2025, expanding at a CAGR of 18.9% during this period, as per a report by Grand View Research, Inc. The large-scale technological advancements coupled with increasing penetration of the Internet have created avenues for criminals to commit such attacks for personal gains. There is a growing concern across industries to curb threats and financial losses stemming from cyber scams such as Distributed Denial-Of-Service (DDoS), ransomware, and malware. This has led to organizations increasingly deploying measures of fraud detection and prevention to minimize, or mitigate the risks posed by hackers to their businesses. The growing awareness of attacks is expected to enable individuals and enterprises to understand, address, and diversify their risk strategies. Fraud detection acts as the first line of defense in curbing cyberattacks, while also enabling organizations to strengthen their data privacy, customer due diligence, compliance policies, cyber analytics, and fraud monitoring, along with customer identification, authentication, and risk assessment
The field of digital payments has seen an exponential growth in recent years, with features such as IoT-based payments, wearable payments, contactless payments, e-transactions, and digital wallets having positively influenced online transactions and the use of point-of-sale terminals. Since payment providers act as an intermediary between the browser and banks, all risks associated with transactions are often borne by them. The growing prevalence of digital frauds and sophisticated cyberattacks has necessitated enterprises to adopt strict security measures and robust solutions for preventing malicious acts. The demand for these solutions is primarily driven by banking, telecom, retail & ecommerce, and healthcare firms. These firms witness high transaction volumes on a day-to-day basis, generating and storing a large amount of personal information in this process. As such, these avenues are a haven for cybercriminals, who utilize sophisticated techniques such as botnets, Account Take Over (ATO) via malware, and phishing to commit acts of fraud.
The market for fraud detection and prevention is broadly segmented on the basis of components, services, application, solutions, organization, and vertical. Solutions in the industry include fraud analytics; authentication; and governance, risk, and compliance. The services offered in the fraud detection and prevention market may be professional or managed. Major applications that are utilizing the industry include insurance claims, money laundering, and payment fraud, among others. Fraud detection and prevention services are availed by both small and midsize businesses (SMBs), as well as large enterprises, with these solutions particularly critical for the latter segment. Major verticals that present growth avenues for the industry include BFSI, government and defense, IT and telecom, healthcare, retail and e-commerce, and industrial and manufacturing, among others. Some of the notable companies offering fraud detection and prevention services include IBM, Oracle, SAP, Total System Services, Inc., Fiserv, Experian, and Equifax, among others.
Fraud Detection & Prevention Market Report Highlights
1 According to recent estimates by Experian, around 10 billion identity authentication checks are being made each day around the world; furthermore, around £31 billion is projected to be lost through online payment frauds in 2024, if fraudsters and bad actors continue to exploit systems at the current rate
2 The fraud analytics solutions segment is projected to advance at the fastest CAGR over the forecast period, aided by the use of descriptive, predictive, and social network techniques for determining fraud patterns
3 The managed services segment is anticipated to grow at the highest CAGR of 22.0% of over the forecast period, as an increasing number of companies are transferring the risk liabilities to a third party, in order to focus on their core areas
4 Payment frauds accounted for the largest share in the application segment of over 40% in 2018, with the exponential rise in usage of digital wallets and cashless payment signifying the need for greater security to avoid monetary losses
5 The large enterprise segment was valued at USD 13.02 billion in 2018; these organizations require safety for volumes of critical data and information, which has led them to invest heavily in cyber security solutions
6 The North American market accounted for the largest revenue share of over 32.0% in 2018, owing to presence of prominent players in the region, coupled with the high level of technological advancements that have been witnessed in the region in recent years
7 BFSI vertical accounted for more than 25% of the revenue share in the fraud detection and prevention market in 2018, with increased digitization in this space, coupled with the need to secure critical client information and data, factoring in the demand
8 The COVID-19 pandemic has led to large-scale utilization of cashless and digital payment options, as a means to comply with social distancing norms by governments, which has led to an exponential increase in investments by service providers, in the areas of fraud detection and prevention
9 Experian announced in February 2021 that it had upgraded and enhanced its CrossCore fraud prevention platform, by integrating the latest capabilities in machine learning analytics, device recognition technology, and behavioral biometrics
10In October 2020, Fiserv launched a novel intelligent fraud detection solution called ‘Advance Defense’ for card issuers, for a range of card types, which would help in minimizing fraud losses, while simultaneously maximizing legitimate cardholder spending
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Fraud Detection & Prevention Market Segmentation
Grand View Research has segmented the global fraud detection & prevention market on the basis of component, solutions, services, application, organization, vertical, and region:
Fraud Detection and Prevention Component Outlook (Revenue, USD Million, 2015 – 2025)
Fraud Detection and Prevention Solutions Outlook (Revenue, USD Million, 2015 – 2025)
- Fraud Analytics
- Governance, Risk, and Compliance
Fraud Detection and Prevention Services Outlook (Revenue, USD Million, 2015 – 2025)
- Professional Services
- Managed Services
Fraud Detection and Prevention Application Outlook (Revenue, USD Million, 2015 – 2025)
- Insurance Claims
- Money Laundering
- Payment Fraud
Fraud Detection and Prevention Organization Outlook (Revenue, USD Million, 2015 – 2025)
- Large Enterprise
Fraud Detection and Prevention Vertical Outlook (Revenue, USD Million, 2015 – 2025)
- Government & Defense
- IT & Telecom
- Industrial & Manufacturing
- Retail & E-commerce
Fraud Detection and Prevention Regional Outlook (Revenue, USD Million, 2015 – 2025)
List of Key Players of Fraud Detection & Prevention Market
• Total System Services, Inc.
• Software AG
• SAS Institute Inc.
• SAP SE
• Fiserv, Inc.
• Experian plc
• Equifax, Inc.
• BAE Systems
• ACI Worldwide, Inc.
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