Fraud Detection and Prevention Market Statistics: 2032
The global fraud detection and prevention market was valued at $29.5 billion in 2022, and is projected to reach $252.7 billion by 2032, growing at a CAGR of 24.3% from 2023 to 2032. Fraud detection and prevention is a collection of processes & techniques designed to identify, monitor, & prevent fraud. Detecting fraud is the first step in identifying where the problem lies and then it needs to be prevented automatically or manually using fraud detection software. Fraudulent activities cover a wide range of cases such as money laundering, cyber security threats, tax evasion, fraudulent insurance claims, fraudulent bank checks, identity theft, and terrorist financing, which can be found in the financial institutions, government, healthcare, public sector, and insurance industries. So, to combat this growing list of opportunities for fraud, organizations implement modern fraud detection & prevention technologies and risk management strategies that combine big data sources with real-time monitoring and apply adaptive & predictive analytics techniques such as machine learning & AI.
Moreover, fraud detection and prevention solutions are solutions offered by the IT vendors to small & medium enterprises and large enterprises to defend against unwilling or uncertain incidents & help to detect or prevent future occurrences. The current business scenario has witnessed an upsurge in the adoption of fraud detection & prevention solutions in developed as well as the developing regions. Companies adopt efficient techniques in an effort to provide customers with innovative and modernized security offerings.
Factors such as the introduction of big data analytics, cloud computing services, and upsurge in mobile payment bolster the growth of the fraud detection and prevention market. Although continuous technological advancements prevailing in the global market promote market expansion. However, high cost of fraud detection and prevention solution are likely to restrict the fraud detection and prevention market growth.
The fraud detection and prevention market is segmented into Component, Deployment Mode, Organization Size and Industry Vertical.
The fraud detection and prevention market is segmented into component, organization size, deployment mode, industry vertical, and region. Based on component, the market is segmented into solutions and service. By organization size, it is fragmented into large enterprises and small and medium sized enterprises. Based on deployment mode, the market is segmented into cloud and on-premise. Depending on industry vertical, it is segregated into BFSI, IT & telecom, retail, healthcare, government & defense, manufacturing, transportation & logistics, and others. Region wise, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
On the basis of component, the solution segment dominated the fraud detection and prevention market size in 2022, and is expected to maintain its dominance during the forecast period. The growth in instances of security breaches and cyber-attacks, alongside a big increase in online frauds are among the key factors that drive the market. However, the service segment registered highest growth rate during the forecast period. The surge in prevalence of cybercrimes and the rise in demand for security services worldwide are anticipated to foster the fraud detection & prevention market during the forecast period.
Region wise, the North America dominated the fraud detection and prevention market share in 2022. The major factors that contribute to the growth of fraud detection & prevention solutions in North America include rise in mobile and web usage and growth in dependency on Internet & social media platforms. However, Asia-Pacific is expected to witness the highest growth rate during the forecast period. The major factors that contribute to the adoption of fraud detection and prevention market trends in Asia-Pacific are the surge in usage of mobile data for various applications such as social media and mobile banki
- In March 2022, Wells Fargo, a leading financial services company collaborated with FICO for usage of FICO solutions for fraud protection and customer experience.
- In March 2022, NCR Technology partnered with Teachers Federal Credit Unions, through NCR’s Digital Banking platform. Teachers expanded its offerings, reaching more members across the country with enhanced digital services.
- In March 2022, Oracle launched Oracle Advanced HCM Controls, to help HR professionals and leaders gain enhanced visibility into potential compliance and fraud-related issues within the systems as well as block suspicious activities as it occur.
- In December 2021, FICO and Sistemas Críticos, a global IT company with presence in Latin America has launched BSafe Platform SaaS, which combines the fraud prevention technologies of FICO Falcon Fraud Manager and TenS, a proprietary Sistemas Críticos platform. This will help in fraud detection at early stages.
- In October 2020, Oracle launched new cloud services namely, Oracle Financial Crime and Compliance Management Cloud Service, to help mid-sized banks combat money laundering and outsmart financial crime.
Top Impacting Factors
Emergence of Big Data Analytics:
Big data analytics plays a key role in the fraud detection and prevention industry. It uses advanced analytics technique such as machine learning, predictive analytics, and data mining to analyze data sets, which may be of different types (such as structured/unstructured and streaming/batch) and different size (terabytes to zettabytes). It allows financial institutions to gain a deeper understanding of suspicious activities, derive patterns, and locate unusual transactions that help in preventing fraud. In addition, analyzing big data allows analysts, researchers, and business users to make better and faster decisions using data that were earlier inaccessible or unusable. Furthermore, by developing predictive models based on both historical and real-time data on wages, medical claims, and voice recordings, companies are in a better position to identify suspected fraudulent claims in the early stages
Rise in Number of Connected Devices:
Connected devices are gaining tremendous popularity. These devices are most vulnerable to threats and malware attacks. Growth in the use of these devices for residential and commercial uses has increased considerably over the years. Furthermore, key market players in the market are designing customized solutions for connected devices to increase their revenues. These factors propel fraud detection and prevention market growth.
Furthermore, the COVID-19 pandemic has led to adoption of remote work mechanisms by numerous companies on a large scale, which is beneficial to contain the virus spread however, in turn, increases the risk of cyberattacks, thus resulting in speedy application of fraud detection and prevention solutions by various firms and organizations. Furthermore, the rise in vulnerability of connected devices to cyberattacks and malware attacks increases demand for robust and integrated fraud detection and prevention solutions across commercial, residential, and public sectors.
Growth in Demand for Cloud-based Security Solutions
Cloud Computing Model is widely adopted due to its powerful and flexible infrastructure option. Several organizations are moving to the cloud to simplify the storage of data, as cloud provides remote server access on the internet, which enables access to unlimited computing power. Furthermore, the implementation of cloud-based model enables organizations to manage all the applications, as there is no invisibility with exceptionally challenging analytics running in the background. In addition, the implementation of cloud can enable organizations to combine supplementary infrastructure technologies such as software defined perimeters to create robust and highly secure platforms. It allows organizations to meet cloud security compliance requirements for encryption, separation of duties and access controls for protected data.
Key Benefits for Stakeholders
- This study includes the fraud detection and prevention market analysis, trends, and future estimations to determine the imminent investment pockets.
- The report presents information related to key drivers, restraints, and fraud detection and prevention market opportunity.
- The global fraud detection and prevention market size is quantitatively analyzed from 2022 to 2032 to highlight the financial competency of the industry.
- Porter’s five forces analysis illustrates the potency of buyers & suppliers in fraud detection and prevention industry.
Fraud Detection and Prevention Market Report Highlights
Market Size By 2032
USD 252.7 billion
CAGR of 24.3%
2022 - 2032
By Deployment Mode
By Organization Size
By Industry Vertical
Key Market Players
Precisely Holdings, LLC, International Business Machines Corporation, LexisNexis, ACI Worldwide, Oracle Corporation., SAP SE, Fair Isaac Corporation (FICO), NCR Corporation, SAS Institute Inc., BAE Systems PLC.
In accordance with the insights by CXOs of leading companies, the global Fraud Detection and Prevention market is projected to witness prominent growth, especially in Asia-Pacific and North America. This growth is attributed to increased investments by organizations, governments against cyber-attacks, and adoption of cloud-based fraud detection & prevention solutions. In addition, the adoption of IoT (Internet of Things) based devices globally provides ample growth opportunities for fraud detection and prevention solutions.
Moreover, the current business scenario has witnessed an upsurge in the adoption of fraud detection and prevention solutions in developed as well as developing regions. The companies have adopted efficient techniques in an effort to provide customers with innovative and modernized security options. Fraud incidents are persistently progressing and growing.
However, with each new attack, it becomes mandatory for organizations to implement effective security solutions. The fraud detection solutions provide a strong defense against such incidents and help to detect or prevent future occurrences. Asia-Pacific exhibits the highest adoption of fraud detection solutions. On the other hand, LAMEA is expected to grow at a significant growth rate, due to rise in adoption of fraud detection and prevention solutions, especially in countries such as Brazil, South Africa, and Argentina.
The global fraud detection and prevention market is dominated by key players such IBM Corporation, Oracle Corporation, SAP SE, BAE Systems, and others. In addition, key players have adopted various growth strategies to enhance and develop their product portfolio, strengthen their fraud detection and prevention market share, and to increase their market penetration. For instance, in December 2021, FICO and Sistemas Críticos, a global IT company with presence in Latin America launched BSafe Platform SaaS, which combines the fraud prevention technologies of FICO® Falcon® Fraud Manager and TenS®, a proprietary Sistemas Críticos platform. This is expected to help in fraud detection at early stages. Such an enhancement is expected to provide lucrative growth opportunities for the market in the upcoming years.