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The global fraud detection and prevention market size was USD 23.05 billion in 2020. The impact of COVID-19 has been remarkable and startling, with fraud detection and prevention components witnessing a diverse demand across the globe during the pandemic. Based on our research, the global market exhibited a substantial growth of 16.5% in 2020 compared to the average year-on-year growth during 2017-2019. The market value is projected to grow from USD 26.97 billion in 2021 to USD 141.75 billion in 2028, with a CAGR of 26.7% during the 2021-2028 period.
The growth anticipated is due to the increasing investment by key players to develop secure fraud solutions across industries such as BFSI, manufacturing, healthcare, and others. Government and end-use enterprises across countries such as the US, India, China, Brazil, UK, Germany, Brazil, among others, are investing in adopting advanced fraud prevention solutions. The market growth is also driven by users shifting their focus towards e-commerce platforms. Key companies in the market are focused on completing various business strategies to expand their product offerings.
Increasing Demand for Cloud-based Solutions across Healthcare to Aid Growth
The novel coronavirus pandemic is impacting the global economy. Observing several initial pointers from the year 2020, a minor decline is observed in the overall demand for fraud detection and prevention across various applications. Also, several commercial campaigns, projected investment, government strategies, and others are on hold owing to a lack of functioning. The stance for the market size in the second half of the year 2020 and beyond remains uncertain. In the healthcare sector, individuals are processing their insurance claims for medical expenses for COVID. This rise in online insurance claims has offered fraudsters opportunities to develop fraud cases to extract insurance claims from hospitals and the government. This will drive the adoption of solutions across healthcare and government sectors.
Key players in the market have adopted various innovative strategies to respond to the growing number of fraudulent activities. Key market players in the market are focused on developing advanced fraud monitoring and preventing solutions.
Such active initiatives are expected to drive the fraud detection and prevention market growth in the forthcoming period.
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Emerging Technologies such as Cloud Has Increased the Adoption Rate of Fraud Detection Solutions
Cloud adoption has been in many areas of technology, and it has now been adopted into services. Cloud for fraud detection and prevention is considered one of the key trends. It provides access through the internet and has the robust processing power and storage space, allowing quick tracing of online cyber-attacks. Further, small and medium enterprises in financial institutions are adopting cloud-based fraud detection and prevention services.
Other key trends driving the demand for fraud prevention solutions are increasing the internet of things (IoT), cloud computing, big data, and blockchain technology.
Increasing Online Application and Mobile Banking Services to Propel Growth
The growth in the adoption of online applications and mobile banking services has led to an abrupt number of fake websites and mobile applications. In other sectors, such as retail & ecommerce, manufacturing, and healthcare, there is an increase in fake websites and online applications. These websites and applications resemble exact retail shops and home delivery services and trap customers to complete fake online transactions. Customers in the banking sector are more focused towards mobile applications for various purposes such as online payment, statement review, registering complaints, and feedback, among others.
The growing number of internet users, increasing adoption of digital payment methods, and rising number of start-ups are expected to further bode well for the growth of the global fraud detection and prevention market during the forecast period.
Lack of Professionals & Awareness Across Developing Nations to Impede Growth
Lack of professionals and skilled workforce to update the FDP solutions across the emerging countries is expected to hinder the growth of the market. Corporations keep their important records and documentation of their customer’s data on the servers. Thus to protect and secure the records is essential for businesses from money launderers. Though, sometimes advanced cyber-attacks and novel anonymous threats are expected to challenge the traditional FDP solutions.
Another market limitation for the growth is the lack of acceptance and responsiveness across the developing nations across the Middle East and Africa, APAC, Latin America, such as Mexico, Argentina, Chile, Peru, Colombia, and the Caribbean countries.
Rising Demand for Fraud Analytics Solutions, to Aid the Market Growth
Based on the component, the market is separated into solutions and services.
The services are likely to grow at a substantial growth rate during the prediction period. The growth is mainly attributable to the increasing demand for professional services such as consulting, training & education, and support & maintenance by large enterprises.
The solutions are sub-distributed into fraud analytics, governance, risk, and compliance, and authentication. Among the solutions, the authentication segment is expected to capture a large market share during the period. Providing extra security layers and blockades makes it exceptionally challenging for an invader to attack confidential data. For instance, in August 2019, Microsoft Corporation stated that around 99.9% of attacks can be prohibited by deploying multi-factor authentication. Further, the fraud segment is distributed as big data analytics, customer analytics, predictive analytics, social media analytics, and behavioral analytics.
Increasing Numbers of Fraudulent Claims Activities, Led to Adoption of Insurance Claims Solution
Based on the application area, the market for fraud detection and prevention is classified into insurance claims, money laundering, electronic payment, and others.
The electronic payment segment is likely to register the major market share during the prediction period. The growth in the segment is attributed to the increasing adoption of mobile banking, online payment, mobile wallets transactions, SMS, and others.
The insurance claims segment is expected to grow significantly owing to the increasing numbers of fraudulent claims such as disaster insurance fraud, contractor insurance fraud, cloud accident insurance fraud, break-in insurance, among others.
Increasing Adoption of Cloud Security Solutions to Boost Market
Based on deployment, the market is classified into cloud and on-premise.
The cloud segment is expected to grow at the highest CAGR during the forecast period. The segment's growth is primarily due to the rising shift of SMEs towards cloud-based fraud prevention solutions from traditional and on-premise methods.
The on-premise segment is likely to rise with stable growth due to dependable solutions and services across government and education sectors.
Growing Adoption of Security Solutions across SMEs to Boost Market
By enterprise size, the market is segmented into large enterprises and small & medium enterprises (SMEs).
The small & medium enterprises (SMEs) section is anticipated to grow with an exceptional CAGR during the projection period. The growth is predominantly due to the rising demand for solutions, coupled with the increasing number of start-ups in India, Germany, Brazil, Israel, Canada, and others.
The large enterprise segment is expected to grow significantly, owing to the emerging trend of digitalization to adopt advanced security software and applications.
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Increasing Adoption of Fraud Analytics and Authentication Solutions across Healthcare and Government Sector to Aid Growth
By vertical, the market is segmented into BFSI, retail & consumer packaged goods, IT & telecom, government, energy & utilities, travel & transportation, construction & real estate, manufacturing, healthcare & life sciences, media & entertainment, and others.
The healthcare & life sciences segment is anticipated to experience the highest growth rate, owing to the rising adoption of fraud analytics and authentication solutions. Rising numbers of fraudulent claims such as life insurance fraud, break-in insurance, and disaster insurance fraud are expected to increase FDP solutions.
The other verticals, such as government, BFSI, manufacturing, media & entertainment, IT & telecom, and energy & utilities, are projected to grow substantially. The rising adoption of advanced fraud analytics tools such as behavioral analytics, predictive analytics, among others, are estimated to boost segmental growth.
North America Fraud Detection and Prevention Market Size, 2020 (USD Billion)
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Geographically, the market for fraud detection and prevention is divided across five major regions, namely North America, Asia Pacific, Europe, Latin America, and the Middle East & Africa.
In North America, prominent players in the mobile payment industry such as Apple Inc., Samsung Group, and others are focused on launching advanced mobile payment services based on fraud prevention solutions. End-use organizations in the US and Canada are adopting FDP solutions to secure critical information from cyber-attacks. According to Accenture’s report ‘Unmask Digital Frauds Today- 2018’, Card-Not-Present (CNP) fraud losses are estimated to be twice that of fraud loss in 2015, owing to the deployment of EMV chips. Governments of the U.S. and Canada are dedicated to implementing several strategies to establish a robust, secure payment platform based on advanced fraud prevention solutions.
Asia Pacific is expected to grow with the highest CAGR during the forecast period (2021-2028). Manufacturing players in countries such as China, Japan, India, South Korea, Southeast Asian countries, and others are increasing their investment to adopt fraud prevention solutions. These countries have a wide number of managed services providers of fraud prevention solutions.
Europe is expected to grow with a significant CAGR during the forecast period (2021-2028). Government, manufacturing, and healthcare players in countries such as France, Germany, Italy, Spain, Luxembourg, Netherlands, and others, are highly investing in adopting fraud prevention solutions.
Latin America (LATAM) and the Middle East & Africa (MEA) fraud prevention solution is projected to exhibit healthy growth. Companies in LATAM and MEA have started focusing on adopting fraud prevention solutions across diverse industries. Brazil is expected to dominate the Latin American market during the forecast period. The growth in the country is mainly owing to the development of various IT projects.
Focus of Key Players towards Innovative FDP Solutions to Strengthen Competition
Key players, including IBM Corporation, BAE System, Kaspersky Lab, Tata Communication Ltd., Accenture PLC, and Experian, are among the top players in the market. These players are considered market leaders and focus on expanding their geographical presence and strengthening their brand name in developing countries. Also, these large corporations are primarily focusing on acquisition and collaborations with domestic players to strengthen their presence in the market.
An Infographic Representation of Fraud Detection and Prevention Market
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The global fraud detection and prevention market research report provides a detailed in depth analysis of the market. It focuses on key aspects such as leading companies, product types, and leading applications of the product. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the factors mentioned above, the report encompasses several factors that have contributed to the growth of the advanced market over the recent years.
Value (USD Billion)
Component; Application Area; Deployment; Enterprise Size; Vertical; and Geography
By Application Area
By Enterprise Size
Fortune Business Insights says that the global market value stood at USD 23.05 billion in 2020.
By 2028, the global market size is expected to reach USD 141.75 billion.
The market is expected to grow at a CAGR of 26.7% during the forecast period (2021-2028).
Based on the component, the solution segment is expected to lead the global market share during the forecast period.
The growth in adoption of online application and mobile banking services, rising number of internet users, increasing adoption of digital payment methods, and rising number of start-ups are a few of the key drivers for market growth.
IBM Corporation, BAE System, Kaspersky Lab, Tata Communication Ltd., Accenture PLC, and Experian are the top companies in the market.
The BFSI segment holds the major market share
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