Global Fraud Detection and Prevention Market Size to grow USD 65.64 billion in 2028
The Global Fraud Detection and Prevention Market Size was valued at USD 22.8 billion in 2021. The market is projected to grow USD 65.64 billion in 2028, at a CAGR of 16.31%.
Fraud Detection is a process that detects fraudulent transactions and prevention from fraudsters through wrong means. Fraudulent activities include cyberattacks, false invoices, money laundering, identity theft, and many others. The fraud detection technology involves various data-based techniques. The major features of fraud detection and prevention solutions are easy scalabilities, cost-effectiveness, increased accuracy, faster & efficient detection. Fraud detection and prevention solutions are serving several industries such as BFSI, manufacturing, healthcare, hospitality, transportation, government & public sector, legal, education, automotive, and others.
The increasing digitalization of transactions and the popularity of e-banking, cross-border transactions, digital payment apps are leading to the rise of the fraud detection and prevention market. Artificial Intelligence and Machine Learning play a vital role in the fraud detection and prevention market owing to the rise in simplifying businesses operation and improved internal security. By coupling with artificial intelligence, a fraud detection solution can be more effective by providing real-time data to reduce the latency of the fraud.
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During the COVID-19 pandemic, people are now using many digital platforms for several reasons such as online transactions via mobile/digital money wallets and their banks’ digital apps. This has eased the regular life of the people however, has opened an easy-to-go door for fraud criminals and money launderers, as now they can access critical information from the digital platforms by hacking them. Thus, fraud detection and prevention are gaining importance among various large-scale business sectors. In February 2021, ClearSale LLC launched an e-commerce podcast to detect and mitigate fraud activities. The solution is developed to discuss challenges and emerging trends related to fraud across e-commerce and social media platforms during the ongoing COVID pandemic.
Increasing Utilization of Artificial Intelligence (AI) and Machine Learning (ML) in The Banking Sector which is Boosting Market Growth
AI and ML are powerful forces for improving the accuracy and efficiency of fraud detection. A combination of machine learning techniques such as support vector machines and gradient boosting and neural networks can deliver the most accurate fraud detection rates. Machine learning can guide systems to automatically run database queries, search and retrieve data, and collect information from third-party data providers without any human intervention.
Adoption of Digitalization Increased the Adoption Rate of Fraud Detection and Prevention System
Increasing digitalization leads to the rising number of online transactions in the banking and insurance sector. Nowadays, rising fake websites lead to trapping customers by offering the same services as the original ones. Surging fake advertisements and ATM frauds are the common frauds that are propelling the Fraud Detection and Prevention Market. Government initiatives are also being implemented to combat false transactions across the market. For instance, in 2020, National Cyber Crime Reporting Portal was implemented by the central government to validate complaints against online fraud.
The adoption of Artificial Intelligence (AI) and big data analytics is creating a boom for the fraud detection and prevention market. Organizations follow cloud security compliance standards for encryption, and access control of data protection using cloud infrastructure. High usage of fraud detection solutions by businesses to reduce of both monetary and non-monetary frauds. Additionally, the businesses are vulnerable to frauds and scams which is creating increased usage of massive data by organizations and high-industry customized requirements are boosting the market share of the fraud detection and prevention market.
For instance, on 13 October 2020, BAE Systems has announced a strategic partnership with Guidewire Software to launch NetReveal add-on integrated tool for the Property and casualty (P&C) insurers.
North America is the largest market for fraud detection and prevention due to increasing money laundering and terrorist financing crime activities in this region. Thus, governments, banks, and financial institutes are highly focused on implementing advanced technological approaches for managing fraud protection. In addition, the presence of major market players such as NICE Ltd., FICO, LexisNexis Risk Solutions Group., TransUnion LLC., IBM, Florida, SAS Institute, Inc., and others are expected to boost market demand in the region.
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The Asia-Pacific is the second-largest market for fraud detection and prevention due to key Manufacturing players in countries such as India, China, Japan, South Korea, and others are increasing their investment to adopt fraud detection and prevention solutions. The increasing R&D activity and the growing number of small and medium enterprises (SMEs) are projected to drive market growth, during the forecast period.
Europe is the third-largest market for fraud detection and prevention owing to Government, healthcare, and manufacturing, players in countries such as Germany, France, Spain, Luxembourg, Netherlands, Italy, and others are highly investing in adopting fraud prevention solutions.
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