The global Fraud Detection and Prevention Market size is projected to grow from USD 27.7 billion in 2023 to USD 66.6 billion by 2028 at a Compound Annual Growth Rate (CAGR) of 19.1% during the forecast period. The expansion of the FDP market is propelled by the extensive integration of digital technologies and IoT across diverse industries and the surge in revenue losses and chargebacks, which has necessitated heightened measures for mitigating fraud. Furthermore, the growing adoption of fraud analytics and risk-based authentication solutions is fueling the market as organizations seek advanced technologies to counter fraudulent behaviors effectively. Consequently, there is an escalating demand for comprehensive fraud prevention solutions as businesses endeavor to safeguard their operations, minimize financial losses, and uphold their reputation in an increasingly digitized environment.
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Based on the deployment type, the on-cloud deployment mode is to grow at the highest CAGR during the forecasted period.
The FDP market is sub-segmented into on-premises and cloud deployment modes. The cloud deployment mode is estimated to grow with a higher CAGR due to its scalability, cost-efficiency, real-time analytics capabilities, and enhanced accessibility. The demand for SaaS-based FDP solutions is growing rapidly as the central delivery model meets IT security needs. The increasing number of applications being deployed on the cloud has shifted from traditional on-premises FDP solutions to cloud-based FDP solutions across large enterprises and Small and Medium-sized Enterprises (SMEs). Cloud-based solutions are continuously shaping their market growth in BFSI vertical as large or small banks have the critical infrastructure and resources to be deployed on the cloud. Other than BFSI, retail and eCommerce, healthcare, and travel verticals also adopt cloud-based FDP solutions to combat fraud efficiently. The rising demand for managed services is expected to significantly impact the cloud deployment mode.
By organization size, large enterprises hold a larger market size during the forecast period.
The FDP market is segmented by organization size into large enterprises and SMEs. The market size of SMEs and large enterprise segments has a significant impact on the overall FDP market. As per research studies, the amount of losses incurred by large enterprises due to the increasing fraud cases is massive, and fraudsters have been associated with large enterprises for a long time. In such cases, large enterprises need to adopt severe anti-fraud measures. Large enterprises are critical resources and offer customers several options for money transactions worldwide. Owing to this, large banks, casinos, insurance companies, retailers, eCommerce big giants, and the healthcare sector are more vulnerable than SMEs, so large enterprises contribute to a higher market share than SMEs.
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Fraud Detection and Prevention Market Definition
As per MarketsandMarkets, FDP entails identifying and mitigating fraudulent activities within a system. It involves the utilization of resources to detect and address potential risks effectively. Conversely, fraud prevention involves proactively using advanced tools and predictive analytics techniques to identify vulnerabilities and avert fraudulent incidents before they occur. This definition underscores the importance of employing strategic measures to combat fraud and protect businesses from financial and reputational harm.
Unique Features in the Fraud Detection and Prevention Market
The application of advanced analytics and machine learning methods stands out as a distinctive feature. These technologies make it possible to identify subtle and changing fraud tendencies by real-time analysing massive amounts of data. Over time, machine learning algorithms can adjust and increase accuracy.
Real-Time Fraud Detection, a specialty of the industry, allows for the detection of fraudulent actions as they take place. This proactive strategy lessens financial losses and the effect that fraud has on enterprises.
Multi-Layered Security measures are included into systems for fraud detection and prevention. This strategy integrates a number of security tools, including biometrics, behavioural analysis, and anomaly detection, to offer strong defence against a variety of fraud types.
In today's interconnected digital world, Cross-Channel Fraud Detection is critical, and many systems excel in this area. To identify and stop efforts at fraud, they track and analyse transactions made through a variety of channels, including online, mobile, and in-person.
Customer Identity Verification is another noteworthy function. Robust identity verification procedures, such as biometrics, are frequently a part of fraud prevention strategies to make sure that people are who they say they are while interacting online.
Major Highlights of the Fraud Detection and Prevention Market
Rapid technological advancements in the sector, such as the application of advanced analytics, artificial intelligence, and machine learning, are what define it. With the use of these technologies, fraud detection methods may be continuously improved to counter increasingly complex fraud schemes.
Fraud analytics dashboards, which provide real-time information on fraud patterns and activities, are advantageous to organisations. By enabling companies to make data-driven decisions, these dashboards improve their overall fraud prevention tactics.
Continuous Monitoring and Adaptation are features of fraud detection and prevention solutions, which ensure that fraud detection is always effective. To accommodate changing fraud trends and methods, this also entails upgrading algorithms and guidelines.
To maintain a favourable user experience, many solutions place a high priority on User-Friendly Interfaces. To avoid consumer annoyance and to provide effective fraud prevention, a balance between security and usability is crucial.
The market provides automated incident response capabilities, enabling businesses to act quickly when fraud is discovered. Automated reactions could consist of preventing transactions, notifying the appropriate parties, or momentarily suspending accounts in order to limit the harm.
Many systems use behavioural biometrics, which uses patterns of user behaviour like typing speed and mouse movements, to authenticate identity. By spotting irregularities suggestive of fraudulent activity, this novel approach offers an extra degree of security.
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Competitive overview:
The FDP market is led by some of the globally established players, such as Fiserv (US), FIS Global (US), LexisNexis Risk Solutions (US), BAE Systems (UK), TransUnion (US), Experian (Ireland), Nice Actimize (US), ACI Worldwide (US), SAS Institute (US), RSA Security (US), SAP (Germany), FICO (US), Software AG (Germany), Microsoft (US), Neustar (US), F5 (US), Ingenico (France), AWS (US), Bottomline Technologies (US), ClearSale (Brazil), and Genpact(US). Partnerships, agreements, collaborations, acquisitions, and product developments are some of the various growth strategies by these players to increase their market presence.
FIS Global (US) is a well-known provider of financial technology solutions and a leader in the US financial services industry. It offers software, services, consulting, and outsourcing solutions for retail and institutional banking, payments, asset, and wealth management, risk and compliance, trade enablement, transaction processing, and record-keeping. The company serves retail banks, wealth managers, and consulting and outsourcing organizations. Its solutions include AML Risk Manager, Compliance Manager, FIS Risk, Information Security and Compliance (RISC), and Fraud Risk Management (FRM) to prevent money laundering and fraud. FIS Global's AML Compliance Manager is a comprehensive solution that automates decision-making and eliminates manual tasks contributing to rising compliance costs. The company's fraud detection solutions increase efficiency, enhance governance processes, and simplify regulatory compliance. With a workforce of over 65,000, FIS Global provides solutions to around 20,000 clients globally, with a strong presence in North America, Europe, the Middle East & Africa, Asia Pacific, and Latin America.
Through collaborations and acquisitions, the firm has grown its portfolio and presence in the FDP market with companies such as Zai (Australia), Signifyd (US), and The Clearing House (US).
TransUnion (US) is a global company that provides information and insights to help businesses and consumers establish trust. This is accomplished by maintaining a reliable and secure representation of each consumer through an accurate and comprehensive data system. TransUnion utilizes a data fusion methodology as a credit reporting agency to link and match credit and public record data in compliance with local regulations worldwide. The company offers ID verification solutions that electronically validate applicant identities using various datasets. As per the company's data, it has prevented over 54 billion fraudulent transactions since 2004, and its customers and analysts have reported 83 million attempts of fraud and abuse. With robust ID verification and screening against watchlists, its FDP solutions help clients meet regulatory requirements while minimizing financial losses from fines and negative publicity.
TransUnion serves industries including automotive, background screening, collections, communications, financial services, gaming, insurance, media and entertainment, public sector, and retail. The company has a global customer base of over 65,000 businesses and organizations in more than 30 countries and territories, including North America, Latin America, Europe and Africa, and Asia Pacific.
Apart from prominent vendors, some other players, such as Kount, Securonix, Accertify, Feedzai, Caseware, PerimeterX, OneSpan, Signifyd, BioCatch, FRISS, MaxMind, DataVisor, Cleafy, Gurucul, Pondera Solutions, Riskified, Alloy, Castle, Sift, NoFraud, Featurespace, Enzoic, Merlon AI, Kubient, SpyCloud, SEON, Nethone, Trustcheckr, Deduce, Incognia, and Resistant AI are also evolving in the FDP market.
Caseware (Canada) provides and develops accounting and audit software solutions. It has several clients, including accounting firms, corporations, and governments. Caseware offers its clients and business partners a solution called Caseware IDEA, which also supports the Canadian Red Cross' in maintaining control oversight through this period. Caseware IDEA is also helping execute audit-related activities unhindered in this pandemic era. Its cloud-based products help audit teams, and their clients collaborate without any disturbances. Over 400,000 users trust the solutions offered by the company in 130 countries worldwide.
According to MnM's approach to evaluating the market, most businesses use inorganic growth strategies to hold onto their market share. In 2021–2022, the number of agreements rose significantly. These agreements cover alliances, acquisitions, collaborations, and partnerships. MnM is expecting that the rate of agreements will further increase in the FDP market in the coming years as startups are evolving in this market space, having technical advancements which, with time, get acquired or partnerships with tech giants to bring the innovations in their existing solutions and increase their market share in the FDP market.
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