Fraud Detection and Prevention Market Size (2023 - 2030)

The market size of global fraud detection and prevention is foreseen to grow from USD 23.0 billion in 2022 to USD 53.8 billion by 2030. The market is projected to grow with a CAGR of 18.8% throughout the forecast period.

Fraud detection and prevention highlight an automated solution that is used for examining and avoiding false activities. The market depends on statistical data analysis methods and AI to decrease the economic and reputational consequences of scams. 

Many organizations across the world are adopting fraud detection and prevention solutions to process enormous amounts of data and surge operational efficacy.

MARKET DRIVERS

The market is driven by the growing need for reducing fraud losses and maintaining revenues from genuine transactions accumulated in the fraud detection and prevention market globally. Enterprises are widely adopting advanced security solutions due to the wide surge in fraud cases, later supporting the market growth. The growth in digitalization and the supportive government initiatives propel the market growth. 

Internet of Things (IoT) has become a crucial feature in the lifestyle of the consumer and industrial operations. Gaming and wireless frauds are some of the quickly-growing sectors in today's world. The e-commerce sites are gaining more familiarity which is mounting the risk of identity scams. 

MARKET RESTRAINTS

However, the high investments for advancing in-house fraud detection solutions act as a great barrier for market growth. The absence of experienced professionals and having less or no knowledge in people hamper the market growth. 

Segmentation Analysis

Fraud Detection and Prevention Market - By Fraud Type:

• Check fraud
• Identity fraud
• Internet /Online fraud
• Investment fraud
• Payment frauds
• Insurance Fraud
• Other fraud types (Mortgage fraud, insider fraud, and mobile fraud)

By Fraud Type, the payment frauds segment is dominating the fraud detection and prevention market. The use of cashless payment i.e., digital payments is increasing and e-wallets are due to the widespread adoption of electronic banking. Moreover, issues regarding digital fraud have increased leading to the spearheading growth of payment fraud in the fraud detection and prevention market. 

Fraud Detection and Prevention Market - By Component:

• Solutions
  • Fraud Analytics
  • Authentication
  • Government, Risk, and Compliance (GRC)
•   Services
  • Professional Services
  • Managed Services

The solutions component is projected to hold the largest share of 64.6% in terms of revenue. The occurrence of Account Take Overs (ATOs) is surging, and exploiting emails has obligated enterprises to adopt advanced tools and solutions for identifying irregular patterns of fraud at an earlier stage. 

The services segment is recorded to grow with the highest CAGR rate throughout the timeline period. In implementing a strong framework, organizations require integration, training, consulting, and support services from fraud prevention service providers. The need for such professional consulting and other third-party services in detecting fraud in real-time drives the services segment growth during the timeline period globally.

Fraud Detection and Prevention Market - By Deployment:

• Cloud
• On-premises
  The cloud deployment segment is leading the market due to the growing demand for cloud-based solutions from diverse end-user industries. 

Fraud Detection and Prevention Market - By Organization Size:

• SMEs
• Large Enterprises

By organization size, the large enterprise's segment constitutes the highest share with more than 74% in 2022 in terms of revenue. Deceptive activities ranging from money laundering and spoofing to distributing denial-of-service are common in large enterprises. 

Small and medium enterprises have recorded brisk growth. The fraud cases in SMEs have surged leading to segment growth. The need for solutions that assess, ease, and identify, and report frauds in SMEs drives the segment growth over the forthcoming years. 

Fraud Detection and Prevention Market - Based on the Vertical:

• BFSI
• Retail and Commerce
• Government
• Healthcare
• Manufacturing
• Travel and Transportation
• Other verticals (telecommunication, real estate, energy and power, and education)

The BFSI vertical segment is dominating the fraud detection and prevention market with more than 30% of the revenue share in 2022. Quick digitization and electronification of operations have made the BFSI holders segment the most familiar in cybercriminals. 

The retail and e-commerce vertical segment is registered to have the swiftest CAGR growth in the fraud detection and prevention market. The holders in the segment depend on the digital platform and electronic devices to develop customer exposure. 

Fraud Detection and Prevention Market - By Region:

• North America
• Europe
• Asia Pacific
• RoW (Rest of the World)

Regionally, North America is said to spearhead the fraud detection and prevention market across the timeframe period. The region is mostly affected globally by money laundering terrorist financing crime activities. As per the F5, Inc., a U.S -based security solution provider's 2022 phishing report, a 15% growth in phishing occurrences was experienced. Certain organizations are increasingly investing in safeguarding data breaches and advancing security IT infrastructure leading to constant CAGR growth. The market growth in the U.S and Canada owes to an increase in the number of cases including identity thefts, money laundering, and payment frauds. 

The European fraud detection and prevention market is intended to experience a quick growth rate throughout the forecasted period. The market growth in the region is proliferated with the increase in online shopping integrated with the propagation of digital payment methods and fewer chances for customer verification by cross-border trade. Moreover, the Fraud Detection and Prevention (FDP) market is witnessing considerable potential growth. In Europe, insurance fraud is one severe problem. 

However, Asia-Pacific is scheduled to grow with the highest CAGR pace during the historical period. Market key players operating in countries like South Korea, China, India, Japan, and other Southeast Asian countries are increasingly focusing on their huge investments for adopting fraud prevention solutions. Moreover, the countries are said to have an extensive number of managed service providers of fraud preventive solutions. Moreover, some awareness programs associated with fraud detection and prevention were advanced in most Asian countries. 

Latin America and the Middle East and African regions are anticipated to display a healthy and strong growth in the fraud detection and prevention market. The market players operating in LATAM and MEA have started focusing on adopting fraud detection and prevention solutions over many industries. 

Moreover, in Latin America, Brazil is accounted for the highest share in the fraud detection and prevention market. The market growth in Brazil is due to developments in different IT fields. In Brazil, the banking sector in the fraud detection and prevention market has seized a considerable share of 30% in terms of revenue.

Key Players

1. BAE Systems (UK)

2. Nice Actimize(US)

3. FICO (US), LexisNexis(US)

4. TransUnion(US)

5. Kount (US)

6. Software AG(Germany)

7. RSA Security(US)

8. Fiserv(US), FIS (US)

9. ACI Worldwide(US)

10. Experian(Ireland)

11. SecuroNix (US)

12. Accertify (US)

13. Feedzai (US)

14. CaseWare (Canada)

15. FRISS(Netherland)

16. MaxMind (US)

17. Gurucul (US)

18. DataVisor (US)

19. PayPal (US)

20. Visa (US)

21. SAS Institute (US)

22. SAP SE (Germany)

23. Microsoft Corporation (US)

24. F5, Inc (US)

25. Ingenico (France)

26. AWS (US)

27. PerimeterX (US)

28. OneSpan (US)

29. Signifyd (US)

30. Cleafy (Italy)

31. Pondera Solutions (US)

COVID-19 Impact On global fraud detection and prevention market

The sudden outbreak of the novel coronavirus (COVID-19) has created a spur in the fraud detection and prevention market. With the mushrooming cases of the COVID-19, the criminals are continuously experiencing the opportunities accumulating in the fraud detection and prevention market. The number of users is increasing offering fraudsters a chance to advance fraud cases to obtain insurance claims from governments and hospitals. The COVID-19 pandemic has created a positive influence on the fraud detection and prevention market. To keep track of such fraud activities, the demand for fraud detection and prevention solutions over the online platforms escalates. 

Recent Market Developments

• On July 29, 2022, LexisNexis Risk Solutions broadcasted LexisNexis Fraud Intelligence Synthetic Score. It is a new product in helping businesses soften synthetic identity fraud. The new system identifies hundreds of unique characteristics.
• On April 06, 2022, NICE Actimize launched SURVEIL-X Suitability for Wealth and Insurance. The newly launched system is to decrease the risk detection capabilities that need complicated regulatory requirements.