Fraud Detection And Prevention Market: Fraud Analytics Solutions Segment Is Anticipated To Register The Fastest CAGR Over The Forecast Period
Fraud Detection And Prevention Industry Overview
The global fraud detection and prevention market size is expected to reach USD 62.70 billion by 2028, registering a CAGR of 15.4% over the forecast period, according to a new report by Grand View Research, Inc. Rise in incidences of mobile payment frauds, phishing, and card frauds, and their subsequent impact on businesses and resultant financial losses are anticipated to drive market growth over the forecast period. Digital transformation is the new buzzword, as businesses transform the way they interact with their customers. However, increased digitization has also exposed businesses to online frauds and scams.
Thus, to mitigate these frauds, while securing customer as well as business data, the demand for fraud detection and prevention (FDP) solutions is anticipated to witness an upsurge over the forecast period. Digital platforms and online banking applications, wherein consumers directly interact with businesses, are complex. These applications require several risk-based security solutions to detect fraud at individual layers. Without implementing solutions and vulnerability testing, hacktivists and fraudsters can easily exploit gaps across these channels.
Incumbents from the banking, telecom, and retail & e-commerce industries are popular targets of such fraud threats. Thus, a need for continuous monitoring and detection of vulnerabilities across layers is required to strengthen fraud defense among organizations. Despite rising digital fraud cases, organizations continue to offer services digitally to consumers as it is a cost-effective approach. Deploying or reliance on a single solution or tool as a defensive tactic increases the risks of fraud attempts. Educating enterprises and consumers related to fraudsters' modus operandi is a significant step towards defending against fraud.
Several government agencies, such as the Federal Financial Institutions Examination Council of the U.S. and the Serious Fraud Investigation Office of India, provided guidelines, programs, and standards to promote fraud defense among organizations and consumers. In addition, deploying advanced technology adaptable to existing cybercriminal operational strategy is crucial. Thus, the need to curb fraudster activities, secure personal information, and strengthen the security framework is expected to drive the adoption of fraud detection and prevention solutions among enterprises.
Fraud Detection And Prevention Market Segmentation
Grand View Research has segmented the global fraud detection and prevention market on the basis of component, solutions, services, application, organization, vertical, and region:
Based on the Component Insights, the market is segmented into Solutions, and Services.
- The solutions segment held the largest revenue share of more than 64.0% in 2020. The growing incidences of Account Take Overs (ATO) and phishing emails have compelled enterprises to adopt advanced tools and solutions to detect anomaly patterns of fraud at a preliminary stage.
- The services segment is estimated to register the fastest CAGR over the forecast period. Organizations in developing economies are increasingly implementing robust fraud prevention strategies. To implement a robust framework, organizations require integration, consulting, training, and support services from fraud prevention service providers.
Based on the Solutions Insights, the market is segmented into Fraud Analytics, Authentication, Governance, Risk, and Compliance.
- The authentication solutions segment dominated the market in 2020 and accounted for more than 43% of the overall revenue share in the same year. Over the years, enterprises have relied on authentication solutions to secure customer credentials and customer-sensitive information.
- The fraud analytics solutions segment is anticipated to register the fastest CAGR over the forecast period. Digital technologies are on the rise, and data assimilation from these technologies transforms the business environment, creating new business growth opportunities.
Based on the Services Insights, the market is segmented into Professional Services, and Managed Services.
- The professional services segment held the largest revenue share of over 70% in 2020 and is expected to retain the leading position throughout the forecast period. The professional services comprise consulting, support, and training & development services.
- The managed services segment is anticipated to grow at the fastest CAGR over the forecast period. Organizations that are keen on taking preventive measures to curb fraud in real-time adopt managed services. Managed service providers monitor business transactions and mine unusual user behavior in real-time across big data generated across all touchpoints.
Based on the Application Insights, the market is segmented into Identity Theft, Money Laundering, Payment Fraud, and Others.
- The payment fraud application accounted for the maximum revenue share of over 53% in 2020 and is expected to continue to grow at a steady CAGR over the forecast period. The growing demand for cashless payment modes and e-wallet among consumers has created avenues for fraudsters.
- The identity theft segment is anticipated to register the fastest CAGR over the forecast period. Identity theft practices are increasing significantly as criminals begin to adapt to the foiling authentication process.
Based on the Organization Insights, the market is segmented into SMEs, and Large Enterprises.
- The large enterprise segment accounted for the largest revenue share of more than 74% in 2020. Fraudulent activities ranging from phishing and money laundering to distributed denial-of-service are prevalent among large enterprises, and such attacks could negatively impact business profit.
- The segment growth is attributable to the increasing fraud cases in these organizations. The growing dependencies on digital solutions and the lack of efficient security frameworks among SMEs results in cyber-attacks.
Based on the Vertical Insights, the market is segmented into BFSI, Government & Defense, Healthcare, IT & Telecom, Industrial & Manufacturing, Retail & E-commerce, and Others.
- The BFSI segment accounted for the highest revenue share of more than 30% in 2020. Rapid digitization and electronification of operations have made the incumbents of the banking and financial services industry a popular target among cybercriminals.
- The retail & e-commerce vertical segment is anticipated to register the fastest CAGR over the forecast period. Incumbents in the retail & e-commerce industry rely on electronic devices and digital platforms to improve customer experience.
Fraud Detection & Prevention Regional Outlook
- North America
- Europe
- Asia Pacific
- Latin America
- Middle East & Africa (MEA)
Key Companies Profile & Market Share Insights
The market is highly fragmented and characterized by several companies actively offering a wide range of products. Factors, such as advancement in fraud detection solutions and establishing strategic deals like partnerships and collaborations, intensify the market competition. Key players are involved in product innovation and collaboration strategies to expand their business growth. For instance, in June 2019, Oracle announced the launch of Oracle Financial Services AML Express Edition for small- and mid-sized banks. The solution enables organizations to stay compliant with the guidelines and become reactive to threats by effectively making a business decision, detecting suspicious activities, and monitoring customer behavior to counter frauds in real-time.
Also, several investments, fundraising events, and acquisition trends are anticipated to drive market competition. Security vendors seek investors’ support to develop new products as a part of their business expansion strategy. For instance, in March 2021, FiVerity, Inc. secured USD 2 million from Mendoza Ventures LLC and a class of super angel investors from the financial service and cybersecurity industries. Some of the prominent companies in the global fraud detection and prevention (FDP) market include:
- Total System Services, Inc.
- Software AG
- SAS Institute, Inc.
- SAP SE
- Oracle
- IBM
- Fiserv, Inc.
- Experian plc
- Equifax, Inc.
- BAE Systems
- ACI Worldwide, Inc.
Order a free sample PDF of the Fraud Detection & Prevention Market Intelligence Study, published by Grand View Research.
About Grand View Research
Grand View Research, U.S.-based market research and consulting company, provides syndicated as well as customized research reports and consulting services. Registered in California and headquartered in San Francisco, the company comprises over 425 analysts and consultants, adding more than 1200 market research reports to its vast database each year. These reports offer in-depth analysis on 46 industries across 25 major countries worldwide. With the help of an interactive market intelligence platform, Grand View Research Helps Fortune 500 companies and renowned academic institutes understand the global and regional business environment and gauge the opportunities that lie ahead.
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