According to our latest market study on “Fraud Detection and Prevention Market Forecast to 2028 – COVID-19 Impact and Global Analysis – by Component, Deployment, and End-user,” the market was valued at US$ 26,511.84 million in 2021 and is projected to reach US$ 75,139.66 million by 2028; it is expected to register a CAGR of 16.0% from 2021 to 2028.
Digital Transformation Across Major Sectors Boost Demand for Fraud Detection and Prevention Technologies:
The world is undergoing a digital transformation. Internet users are no longer limited to online search and social networking but have expanded their activities to include online banking and shopping. People have ceased leaving their homes due to COVID-19 lockout limitations, and a major portion of the population has begun to use internet transactions. According to the Boston Consulting Group (BCG), 70% of urban customers in countries such as India are digitally influenced to buy any financial goods, which implies they utilize banking apps or websites to purchase financial items. As a result, there has been an increase in the number of bogus websites.
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The key players operating in the market Fiserv, Inc., IBM Corporation, ACI Worldwide, Inc., BAE Systems Plc, SAP SE, Fair Isaac Corporation, NCR Limited, Oracle Corporation, RELX plc, SAS Institute Inc., among others. Several other market players have been analyzed to understand the market. The listing of key players is derived by considering multiple factors such as overall revenue, current fraud detection and prevention product portfolio, geographical reach, new product launches, market initiatives, and investment in technology upgradation, partnerships, and other market related activities.
Apart from banking, bogus websites that resemble businesses and home delivery services are on the rise, luring customers into making online purchases. Furthermore, IoT is becoming an important aspect of consumer lifestyle and industrial operations as the use of IoT grows and new IoT included items enter the market. One of the reasons is that connected gadgets provide convenience to hackers in order to gain access to networks. Consumer data is collected, sent, and stored by linked devices, posing a privacy concern. The rise in fraud because of hackers impersonating debit and credit card activations, online bookings, free COVID-19 tests, and job offers has prompted the development of fraud detection and prevention technologies, thereby boosting its demand.
Key Findings of Study:
Geographically, the fraud detection and prevention market are segmented into five key regions—North America, Europe, Asia Pacific (APAC), Middle East & Africa (MEA), and South America (SAM). North America held the largest revenue share in 2020, followed by Europe and APAC.
Based on component, the fraud detection and prevention market are bifurcated into solution and services. The solution segment contributed a larger revenue share in 2020.
Based on deployment, the fraud detection and prevention market are bifurcated into on-premise and cloud-based. The cloud-based segment contributed a larger revenue share in 2020.
Based on end-user, the fraud detection and prevention market are categorized into BFSI, healthcare, manufacturing, retail, telecommunication, and others. In 2020, the BFSI segment led the fraud detection and prevention market globally.
Despite technical improvements that make it easier to make payments or access data, the growing worry about digital fraud necessitates the adoption of fraud detection technologies. The sophistication of digital frauds, financial crimes, and cyberattacks is posing a threat to the growth of many enterprises throughout the world. As e-banking, digital payment apps, and cross-border transactions become more widespread, the number of fraudulent instances involving identity theft, data breaches, and payment frauds is on the rise. All of the aforementioned elements are paving the way for market expansion.
BFSI, healthcare, and e-commerce executives are proactive in recognizing the need to update obsolete tools and existing tactics to prevent digital fraud. Certain businesses, on the other hand, continue to utilize and follow traditional fraud investigation methods, which are complex and time-consuming. Sophistication in Advanced Persistent Threats (APTs), and fraudsters constantly adapt their intrusive strategies in order to avoid detection using standard notions. Real-time identification of fraudulent actions becomes easier with the deployment of analytical and authentication technologies, which is likely to encourage the adoption of fraud detection and prevention (FDP) solutions.
The expansion of the Fraud Detection and Prevention (FDP) market is predicted to be fueled by the increasing volume of online transactions as a result of digitization. As fraudsters continue to develop and outperform the current security mechanism, the number of financial institutions experiencing losses from financial crimes is rapidly increasing. Payment fraud analytics, financial fraud analytics, and insurance fraud detection analytics all use fraud detection and prevention analytics, which are based on data mining and machine learning. Techniques like logistic regression and time-series analysis, which are supervised Machine Learning techniques, learn from past data and propose trends that should be examined further. Cluster analysis and peer group analysis are examples of unsupervised Machine Learning approaches that look at data that hasn’t been tampered with and identify new irregularities and patterns of interest.
The increased use of online applications and mobile banking services has resulted in an increase in the number of bogus websites and mobile apps. Fake websites and online apps are on the rise in other industries, including retail and eCommerce, manufacturing, and healthcare. These websites and apps imitate real retail stores and home delivery services, luring clients into making fraudulent online transactions. Customers in the banking industry are increasingly using mobile applications for a variety of purposes, including online payment, statement review, complaint registration, and feedback, among others. According to the Boston Consulting Group (BCG), almost 70% of urbanites throughout the world are digitally persuaded to buy financial products and services through online banking apps or mobile banking websites. In the current economic climate, many firms are integrating solutions across their business units to progress their business road maps. During the forecast period, the growing number of internet users, increasing acceptance of digital payment methods, and an increasing number of start-ups are likely to boost the global fraud detection and prevention market.