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Understand the influence of COVID-19 on the Fraud Detection and Prevention Market with our analysts monitoring the situation across the globe.

Market Introduction

The fraud detection and prevention solution and services are provided by giant IT companies to various organizations and enterprises to analyze trends, anomalies, and patterns in the transactions. Furthermore, it also enables in analyzing a wide range of data sources for inaccuracies. Fraud detection and prevention solution offers a broad range of attributes that includes storage of data at low latency that minimizes losses by detecting at real-time, increases operational efficiency, and processes a large volume of data at low speeds, among others.

The growing use of digital transactions, increasing frequency of cyber frauds and attacks, and rising revenue losses due to frauds are the factors propelling the market growth. However, the lack of integration capabilities hinders the market growth.

The fraud detection and prevention market was valued at USD 20.1 billion in 2019 and is presumed to reach USD 64.1 billion by 2029, growing at a CAGR of 27.1% during the forecast period.

Fraud-Detection-and-Prevention-Market

Growing Frequency of Cyber Attack

The growing adoption of the Internet of Things (IoT) across all industries is beneficial at many levels, but it also increases the concern related to cyber frauds as everything can be connected to the internet right from the parking meters to washing machines and even cattle. However, the corollary is that everything can be hacked. According to industry experts, approximately 63% of businesses experienced phishing and social engineering attacks in 2018.  This enables enterprises to adopt fraud detection and prevention system to enhance operational efficiency.

Segmental Overview

Innovations in Solution Segment

The solution segment holds the dominant position in the adoption of fraud detection and prevention system and is presumed to grow during the forecast period. The growth is attributed to growing innovative techniques of fraud analytics, which enables the organizations to analyze databases and systems and identify the vulnerabilities. Furthermore, fraud analytics also offers numerous traits over traditional methods that include monitoring and analyzing data from various sources and suspicious and unusual behavior across all channels. Additionally, fraud analytics also allows enterprises to detect frauds and enhances compliance.

Moreover, the growing adoption of innovative technology such as Artificial Intelligence (AI) and Machine Learning is also one of the factors leading to the adoption of fraud detection and prevention system. For instance, in 2019, Global Bank Corporation has adopted Cognizant’s AI Machine learning fraud detection solution to speed up check verification and lower costs. This enabled Global Bank Corporation to lower operating costs, resulting in a 50% reduction in fraudless transactions and approximately USD 20 million annual savings on fraud losses.

Rising Popularity of Process Automation Among Large Enterprises

The large enterprise holds a substantial share in the fraud detection and prevention system market and is presumed to grow during the forecast period. The growth is attributed to the growing speed and volume of digital financial transactions among various industrial verticals. Furthermore, the growing adoption of process automation among industry vertical is also one of the factors bolstering the adoption of fraud detection and prevention market. Additionally, on account of various government initiatives that lead to increasing trades and exchange of heavy data across the borders further propels the market growth. For instance, in 2018, NatWest Group has adopted DXC Technology Fraud Prevention and Detection system to digitized check clearing processes. This enables NatWest Group to reduce the operating costs, enabling faster and accurate check clearing systems, which results in saving approximately the USD 50 million a year.

Slew of Features Offered by Cloud Segment

The cloud segment holds the dominant position in the adoption of fraud detection and prevention market and is expected to grow during the forecast period. The growth is attributed to a wide offering of the cloud computing solution that includes the reduction in overall costs, real-time updates, the flexibility of work practices, and improvement in compliance, and among others. Furthermore, growing SMEs on account of various government initiatives and the growing adoption of digital financial transactions are also one of the factors propelling the market. For instance, in 2017, Banco Santander, a commercial bank and financial services in Spain, has adopted the IBM cloud fraud detection and prevention system to protect the customer’s data against cyberattacks as well as to enhance the customer’s engagement. This enables Banco Santander to quickly identify and prevent fraudulent logins and transactions.

Need to Protect High-Sensitive Data of BFSI Sector

The BFSI sector holds significant share and is presumed to grow during the forecast period. The growth is attributed to the presence of high-sensitive data of employees, customers, offices, and business operations. Furthermore, the growing adoption of digitization in the financial sector, as well as technological advancement in the BFSI sector, leads to the increasing frauds in the transactions. This enables the financial services sector to adopt fraud detection and prevention systems to mitigate the losses. Additionally, the adoption of stringent Known-Your-Customer (KYC) regulations and improved auditing systems has reduced the fraud activities to a large extent; however, online banking has increased the fraud rate. This also enables the BFSI sector to adopt fraud detection and prevention systems. For instance, in 2018, the Canadian Federal Bank has adopted ACI Worldwide fraud detection and prevention solution to prevent money laundering and bank fraud. This results in an approximately 50% reduction in fraudulent transactions and a 98% detection rate of fraud.

Impact of COVID-19

The impact of COVID-19 has translated into a devastating effect across all industry verticals globally. However, the growth of fraud detection and prevention system is expected to witness growth amid the pandemic on account of the increasing risk of hackers to hamstring hospitals that are already stressed and scrambling to treat surging numbers of patients sick with the virus. This enables health care services to adopt fraud detection and prevention systems to mitigate the risk of hackers. Furthermore, the growing adoption of digitization in healthcare is also one of the factors leading to the adoption of fraud detection and prevention system. For instance, in 2019, approximately 764 health providers were hit by ransomware globally, thereby providing an impetus to the adoption of fraud detection and prevention system.

Regional Overview

Early Adoption of Technologies in North America

North America holds the highest CAGR and is presumed to grow during the forecast period. The growth is attributed to the presence of numerous giant tech companies offering fraud detection and prevention system that includes IBM, FICO, DXC Technology, and ACI Worldwide, among others. Furthermore, early adoption of technologies such as Artificial Intelligence (AI) and Machine Learning and IoT for fraud detection and prevention is also one of the factors bolstering market growth. Additionally, the growing demand for e-commerce transactions and the adoption of smartphones further leads to the development of fraud detection and prevention system in the region. For instance, in 2019, FISERV has announced that Arian Bank has deployed its Fraud detection and prevention system to manage the fraud risk and anti-money laundering processes.

Rising Digitization Initiatives in Asia-Pacific Countries

Asia-Pacific is the fastest-growing region in terms of the adoption of fraud detection and prevention system and is expected to grow during the forecast period. The growth is attributed to the increasing adoption of digitization in emerging economies such as China and India. Furthermore, the growing adoption of cloud-based solutions among SMEs is also one of the factors bolstering market growth. In addition, a surge in the penetration rate of adoption of Smartphone’s and internet across various business segments further leads to the development of fraud detection and prevention market.

Key Players

The key players in the global fraud detection and prevention market have adopted organic as well as inorganic growth strategies that include partnerships and collaborations, product launch, and mergers and acquisitions, to expand its geographical reach. For instance, in 2018, BAE System partnered with Mphasis to protect organizations from fraudulent activities. In addition to BAE Systems, the other key players involves are; BM (the U.S.), FICO (the U.S.), SAS Institute (the U.S.), DXC Technology (the U.S.), SAP (Germany), ACI Worldwide (the U.S.), Fiserv (the U.S.), NICE Systems (Israel), Experian (the U.S.), LexisNexis Risk solutions (the U.S.), iovation (the U.S.), Friss (Netherlands), Dell technologies (the U.S.), First Data (the U.S.), Wirecard (Germany), Software AG (Germany), Easy Solutions (the U.S.), Distil Networks (the U.S.), Guardian Analytics (the U.S.), Securonix (the U.S.), MaxMind (the U.S.), Kount (the U.S.), and Simility (the U.S.).

Fraud Detection and Prevention Market Segmentation

By Component

Solution

  • Fraud Analytics
  • Authentication
  • GRC Solutions

Services

  • Professional Services
  • Managed Services

By Organization Size

  • SMEs
  • Large Enterprise

By Deployment Mode

  • Cloud
  • On-Premise

By Industry Vertical

  • BFSI
  • Retail
  • Telecommunication
  • Government/Public Sector
  • Healthcare
  • Real Estate
  • Energy and Power
  • Manufacturing
  • Others

By Region

North America

  • The U.S.
  • Canada
  • Mexico

Europe

  • The U.K.
  • Italy
  • France
  • Spain
  • Germany
  • The Rest of Europe

The Middle East and Africa (MEA)

  • Saudi Arabia
  • Egypt
  • South Africa
  • The Rest of MEA

Asia-Pacific

  • India
  • China
  • Japan
  • Australia
  • South Korea
  • The Rest of Asia-Pacific

South America

  • Columbia
  • Brazil
  • Chile
  • Peru
  • Argentina
  • The Rest of South America

Frequently Asked Questions (FAQs)

The fraud detection and prevention market was valued at USD 20.1 billion in 2019 and is presumed to reach USD 64.1 billion by 2029, growing at a CAGR of 27.1% during the forecast period.
The growing use of digital transactions, increasing frequency of cyber frauds and attacks, and rising revenue losses due to frauds are the key factors expected to drive Fraud Detection and Prevention Market during the forecast period.
North America is expected to hold the highest market share in Fraud Detection and Prevention Market.
BAE Systems, BM, FICO, SAS Institute, DXC Technology, SAP, ACI Worldwide, Fiserv, NICE Systems, Experian, LexisNexis Risk solutions are the top players in Fraud Detection and Prevention Market.
In 2029 Global Fraud Detection and Prevention Market was valued at USD 64.1 billion.
Cloud Segment is expected to be the leading segment in Fraud Detection and Prevention Market during the forecast period.
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