Fraud Detection and Prevention Market Size, Share & COVID-19 Impact Analysis, By Solution (Fraud Analytics, Authentication and Governance, Risk and Compliance), By Application (Insurance Claims, Money Laundering, Electronic Payment, and Others), By Deployment (On-Premise and Cloud), By Enterprise Type (Large Enterprises and Small & Medium Enterprises), By Industry (BFSI, IT and Telecom, Retail and Consumer Packaged Goods, Government, Construction and Real Estate, Energy and Utilities, Healthcare and Life Sciences and Others), and Regional Forecast, 2023-2030

The global fraud detection and prevention market size was valued at USD 36.89 billion in 2022 and is projected to grow from USD 43.97 billion in 2023 to USD 182.66 billion by 2030, exhibiting a CAGR of 22.6% during the forecast period.

The increasing spending by key companies on introducing fraud solutions across different industries, such as BFSI, healthcare, manufacturing, and others, is projected to fuel market growth. End-use enterprises and governments across countries, including the U.S., India, Brazil, China, Germany, the U.K., and Brazil invest in employing enhanced fraud prevention solutions. Furthermore, the change in end-users’ emphasis toward e-commerce platforms surges market growth. The companies in this market focus on several business strategies to increase their product offerings.

• For instance, in October 2020, BAE Systems joined forces with Guidewire Software to develop and release fraud prevention solutions by incorporating NetReveal, built on Guidewire’s ClaimCenter platform.

COVID-19 IMPACT

Increasing Demand for Cloud-based Solutions across the Healthcare Industry to Aid Growth

The coronavirus pandemic had a drastic impact on the global economy. The overall demand for Fraud Detection and Prevention (FDP) solutions declined slightly across various applications in the initial period of 2020. Also, several commercial campaigns, projected investments, government strategies, and others are on hold owing to lack of functioning.

The stance for the market size in the second half of the year 2020 and beyond increased the adoption of fraud detection and prevention solutions owing to increased cybercrimes, payments frauds, insurance frauds, and others. Additionally, the increased number of online insurance claims has provided opportunities for fraudsters to engage in fraudulent activities across insurance claims from hospitals and the government. This is expected to drive the adoption of solutions across the government and healthcare sectors.                                              

Major companies in the market have implemented several innovative tactics to respond to the increasing number of suspicious activities. The key players in the market are focusing on developing enhanced fraud monitoring and prevention solutions. For instance,

• In February 2021, ClearSale LLC released an e-commerce podcast to identify and mitigate fraud actions. The solution is designed to discuss emerging trends and challenges associated with fraud across social media and e-commerce platforms amid the COVID-19 pandemic.

Such active initiatives are expected to drive the fraud detection and prevention market growth in the forthcoming period.

LATEST TRENDS

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Growing Adoption of Cloud Increased the Adoption Rate of Fraud Detection Solutions

Cloud technology acts as a key trend for fraud detection and prevention. It offers robust processing power, storage space, and access through the internet. As well as cloud technology, which allows rapid tracing of online cyber-crimes. Further, small and mid-sized enterprises operating in banking and financial institutions are actively deploying cloud-based fraud detection and prevention services across their organizations.

• For instance, in November 2019, ACI Worldwide, Inc. collaborated with Salesforce.com, Inc. The aim of the partnership is to integrate the Salesforce commerce cloud with the corporation’s real-time fraud prevention system. The integration offers capabilities such as predictive analytics, machine learning, customer profiling techniques, and others.

Other key trends surging the demand for fraud prevention solutions are the Internet of Things (IoT), cloud computing, Big Data, and block chain technology.

DRIVING FACTORS

Increasing Online Application and Mobile Banking Services to Propel Market Growth 

The growing adoption of online applications and mobile banking services has led to an abrupt increase in the number of fake websites and mobile applications. In other sectors, such as retail and e-commerce, 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 into completing fake online transactions. Customers in the banking sector are more focused on mobile applications for various purposes such as online payment, statement review, registering complaints, and providing feedback, among others.

• As per Boston Consulting Group (BCG), approximately 70% of resident users globally are digitally influenced to buy financial products and services using mobile banking websites or e-banking applications. Several companies are installing solutions across their business units to enhance their business road maps in the present economic condition.

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 market during the forecast period.

RESTRAINING FACTORS

Lack of Professionals & Awareness across Developing Nations to Impede Growth

The lack of professionals and a skilled workforce to update the FDP solutions across the emerging countries is expected to hinder the growth of the market. Corporations keep important records and documentation of their customers’ data on the servers. Thus, protecting and securing the records is essential for businesses to prevent money laundering. Though, sometimes advanced cyber-attacks and novel anonymous threats are expected to challenge the traditional FDP solutions.

Another market limitation for growth is the lack of acceptance and responsiveness across the developing nations across the Middle East and Africa, APAC, and South America, such as Mexico, Argentina, Chile, Peru, Colombia, and the Caribbean countries.

SEGMENTATION

By Solution Analysis

Rising Demand for Authentication Solutions to Aid Market Growth

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 specified that multi-factor authentication could prohibit about 99.9% of attacks. Furthermore, the fraud analytics segment is distributed as social media analytics, predictive analytics, customer analytics, Big Data analytics, and behavioral analytics.

By Deployment Analysis

Cloud Security Solutions to Drive the Market toward a Higher Growth Trajectory

By deployment, the market is classified into on-premise and cloud.

The cloud segment is anticipated to gain traction in the coming years due to advancements in artificial intelligence, and data analytics. Small & mid-sized enterprises are likely to be the potential customers of cloud-based fraud detection and prevention software. Limited security spending’s & IT infrastructure fuel the demand for cloud-based solutions across SME’s.

The on-premise segment is likely to rise with stable growth due to dependable solutions and services across the government and education sectors.

By Enterprise Type Analysis

Growing Adoption of Security Solutions across SMEs to Boost Market

By enterprise type, the market is segmented into large enterprises and Small & Medium Enterprises (SMEs).

The Small & Medium Enterprises (SMEs) segment is anticipated to grow at an exceptional CAGR during the projection period. The development is mainly due to the increasing demand for security solutions, tailored to the increasing number of start-ups in Germany, Brazil, Canada, and Israel, among others. The large enterprise segment is anticipated to show significant growth in the coming years, owing to the rise in fraudulent activities driven by the escalating digital transformation across industries.

By Application Analysis

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Increasing Adoption of Mobile Banking Led to Adoption of Electronic Payment

Based on application, the market 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 payments, mobile wallet 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, and break-in insurance, among others.

By Industry Analysis

Healthcare & Life Sciences Segment to Gain Traction due to Growing Demand for Fraud Analytics

By industry, the market is segmented into BFSI, IT & telecom, travel & transportation, retail & consumer packaged goods, energy & utilities, construction & real estate, government, manufacturing, healthcare & life sciences, media & entertainment, and others.

The healthcare & life sciences segment is expected to gain traction during the forecast period owing to the growing demand for fraud analytics and authentication solutions and services. The increased numbers of fraudulent claims such as disaster insurance fraud, break-in insurance, and life insurance fraud are projected to expand the market size.

Government, BFSI, manufacturing, media & entertainment, IT & telecom, and energy & utilities segments are projected to grow substantially. The increased implementation of fraud analytics solutions including predictive analytics, behavioral analytics, among others is expected to boost the market.

REGIONAL INSIGHTS

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Geographically, the global market is divided across five major regions, North America, Asia Pacific, Europe, South 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 introducing advanced technology enabled mobile payment services built on fraud prevention solutions.

Organizations in the U.S. and Canada are focusing on adopting FDP solutions to secure critical information from growing cyber-attacks. The governments of the U.S. and Canada are actively implementing various strategies to launch a secure and robust payment platform with the integration of advanced fraud prevention solutions.

Asia Pacific is expected to grow at the highest CAGR during the forecast period (2023-2030). 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 variety of providers of fraud prevention solutions.

Europe is expected to grow at a significant CAGR during the forecast period (2023-2030). 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.

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South America and the Middle East & Africa (MEA) regions are slated to witness healthy growth in the market. Companies in South America and MEA have started focusing on adopting fraud detection and prevention solutions across diverse industries. Brazil is expected to dominate the South American market during the forecast period. The growth in South American countries is driven by the development of various IT projects.

KEY INDUSTRY PLAYERS

Focus of Major Companies toward Inventive Solutions to Strengthen Competition 

Fraud detection and prevention companies, including Experian Information Solutions Inc., BAE System, IBM Corporation, Uplexis, Fair Isaac Corporation, and ACI Worldwide are among the major players in the market. These players are market leaders focusing on escalating their geographical presence and strengthening their brand names in developing countries. Also, these large organizations mainly focus on collaborating and acquiring domestic players to improve their presence in the market.

List of the Key Companies Profiled:

• IBM Corporation (U.S.)


• Uplexis (Brazil)


• Experian Information Solutions, Inc. (Brazil)


• Gemalto - Thales Group (France)


• ACI Worldwide, Inc. (U.S.)


• BAE Systems (U.K.)


• Fair Isaac Corporation (U.S.)


• Fidelity National Information Services, Inc. (U.S.)


• LexisNexis (U.S.)


• NICE Actimize Ltd. (Israel)

KEY INDUSTRY DEVELOPMENTS:

• September 2022 - Experian launched Experian Fraud Score, a fraud protection solution that will aid organizations of all sizes in identifying fraud at the transaction and customer lifecycle stages.


• June 2022 - Advanced Fraud Solutions (AFS) collaborated with Fiserv, a provider of payments and financial services technology, allowing Fiserv and financial institution customers to check risk-based fund availability, fraud detection, and decision procedures, aiding in preventing losses and detecting fraudulent credits before they are accepted.


• May 2022 - Fiserv launched a fraud mitigation service that minimized fraud losses by 10 to 15% for its small and medium bank clients and credit unions. This solution incorporates the improved artificial intelligence capabilities of Fico Fraud Predictor, Global Intelligent Profiles, and Adaptive Analytics, delivering a complementary, cohesive, and holistic approach.


• April 2021 - NICE Actimize released SURVEIL-X, an AI-driven surveillance and suitability solution for the insurance and wealth sectors. This solution was developed on a complete surveillance platform called SURVEIL-X.


• November 2020 - Amazon Web Services and Amdocs collaborated to provide cloud-driven Business Support Systems (BSS) offerings to accelerate the adoption of cloud platforms in the telecommunications industry.

REPORT COVERAGE

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The fraud detection and prevention market research report provides a detailed 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 market in recent years.

Report Scope and Segmentation