Fraud Management in Banking Market Expected to Reach $48.4 Billion by 2032—Allied Market Research

According to a new report published by Allied Market Research, titled, “Fraud Management in Banking Market, by Component (Solution and Service),  Fraud type (Payment Fraud, Loan Fraud, Identity Theft, Money Laundering, and Others), and Application (Fraud Detection and Prevention Systems, Identity and Access Management (IAM), Customer Authentication, Transaction Monitoring, and Others): Global Opportunity Analysis and Industry Forecast, 2023-2032." The fraud management in banking market was valued at $6.5 billion in 2022, and is estimated to reach $48.4 billion by 2032, growing at a CAGR of 22.6% from 2023 to 2032.

Fraud management in banking and programs that assist in identifying, detecting, and preventing any finance-related malpractices or fraudulent activities that may be occurring in various types of financial institutions. The tools leverage the benefits of advanced technologies and analytical algorithms to scan through large volumes of data in real-time and quickly to detect any transaction that deviates from normal patterns and could be an indicator of fraud.

Furthermore, The growing adoption of online banking applications and mobile banking services and increasing incidences of financial fraud are boosting the growth of the global fraud management in banking market. in addition, the increase in the use of digital transformation technology the positively impacts growth of the fraud management in banking market. However, growing incidents of false positive rates and increasing fraud complexity are hampering the fraud management in banking market growth. On the contrary, rising Innovations in the Fintech Industry are expected to offer remunerative opportunities for the expansion of the fraud management in banking market during the forecast period.

Depending on fraud type, the money laundering segment holds the largest fraud management in banking market share, owing to surging usage of virtual currencies and growing penetration of the internet. However, the identity theft segment is expected to grow at the highest rate during the forecast period, due to the increasing digitization of businesses and strong expansion of communication infrastructure have raised the risk of cyberattacks and exposed companies to several new risks and threats, drives the growth of the fraud management in banking market.

Region-wise, the fraud management in banking market size was dominated by North America in 2022 and is expected to retain its position during the forecast period, owing to presence of the most successful fraud management in banking businesses in the region. These companies include Bank of America, JPMorgan Chase, and Citigroup. These businesses have a great need for innovative banking system software products that may help them optimize their business processes and boost their level of competitiveness. However, Asia-Pacific is expected to witness significant growth during the forecast period, owing to increasing government initiatives in the banking industry and an increasing number of mobile and internet users in developing nations such as India and China are accounted development of private and rural banking.

The fraud management in banking market witnessed stable growth during the COVID-19 pandemic, owing to a rise in demand for anti-money laundering (AML), fraud detection solutions, and various other solutions during the pandemic situation. In addition, the COVID-19 pandemic resulted in changes in model performance, to monitor and validate various types of risks, compared to static validation and testing methods, which, in turn, led to the development of advanced machine learning models. In addition, with rapid digital transformation, various governments introduced stringent regulations to protect end users’ data such as General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). Thus, governments in various countries took strict actions toward the defaulters of COVID-19 regulations, and natural language processing technology is helped financial institutes to scan their internal policies as well as claims documents to check their compliance with different regulatory policies, such initiatives drives the fraud management in banking market growth.

However, COVID-19 pandemic made it even harder for larger insurers to keep pace, and even more difficult for midsize and smaller insurers to adopt AI/ML technologies, owing to long development timelines and high investment requirements, drives the fraud management in banking market growth.

Moreover, investments in deep learning became popular day by day, owing to an increase in attention toward data to help financial institutes find out the future performance of the firm to take corrective measures at an early stage in case of any probable crisis in future, which, in turn, is contributed toward the growth of the fraud management in banking market. Furthermore, algorithms used to get meaningful insights from real-time and historical data helped financial institutes to handle various critical issues related to customer insights during COVID-19 pandemic, which is driving the growth of the fraud management in banking market. 

The integration of advanced technologies such as AI and big data in financial companies helps to improve various aspects of a company such as perception, reasoning, learning, and problem-solving of the human mind for detecting and predicting risks, which, in turn, is drives the growth of the fraud management in banking market analysis. In addition, in the coming years, the number of connected consumer devices such as cars, fitness trackers, home assistants, smartphones, and smartwatches will continue to increase rapidly, which is expected to create huge amount of data needed for upgrading the machine learning algorithms in fraud management in banking industry. Furthermore, according to a research report, around 1 trillion connected devices are anticipated to be deployed by 2025 across the globe, which is expected to help financial institutes to understand the clients more deeply, resulting in new product categories, more personalized pricing, and increasingly real-time service delivery, which are expected to provide lucrative opportunity for the market. Moreover, various public and private entities are expected to come together to create ecosystems to share data for multiple use cases under a common regulatory and cybersecurity framework, which, in turn, is expected to provide lucrative opportunity for the growth of the global fraud management in banking market.

Key Findings of The Study

• By component, the solution segment accounted for the largest fraud management in banking market share in 2022.
• Region-wise, North America generated the highest revenue in 2022.
• Depending on the application, the fraud management in banking market segment generated the highest revenue in 2022.

The key players that operate in the fraud management in banking market trends are IBM Corporation, SAS Institute Inc, SAP SE, NICE Actimize, ACI Worldwide Inc, Experian PLC, BAE Systems, FIS global, LexisNexis Risk Solutions, and BioCatch Ltd. These players have adopted various strategies to increase their fraud management in banking market penetration and strengthen their position in the fraud management in banking industry.