|Study Period:||2018 - 2026|
|Fastest Growing Market:||Asia Pacific|
|Largest Market:||North America|
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The Global Fraud Detection and Prevention Market was valued at USD 18.24 billion in 2020, and it is expected to reach USD 48.71 billion by 2026, registering a CAGR of 18.19%, during the period of 2021-2026. The COVID-19 pandemic has led to people showing increasing curiosity regarding viruses, which has resulted in high-volume searches. Hackers are trying to misuse this interest by making malicious programs hidden in files related to coronavirus.
Moreover, companies across various industries are experiencing increased operational and financial pressure due to the pandemic. This creates a heightened level of economic risks such as reduction in revenue and profits, loss of market demand, etc. These financial risks may lead to increased motivation toward committing fraud, through manipulation of financial result, misrepresentation of facts, misappropriation of assets among other fraud scheme.
- The fundamental shift from the physical cards, checks, and currency toward digital payments continues to transform the way consumers and businesses transfer value. Identity, security, and trust are fundamental requirements for payments, commerce, and finance, especially in a digitized economy.
- According to Wipro State of Cybersecurity Report 2019, the consumer and retail sectors are being targeted at a greater frequency, compared to other sectors. The report further adds that at least 73% of the organizations are anticipated to lose revenue in case of an attack, due to the non-availability of services at critical times.
- Concurrently, a significant rise in the retail IT infrastructure includes POS checkout terminals, self-checkout units, information/web kiosks, PCs, and back-office servers. Thus, the increasing dependency on IT, ranging from wholesalers and distributors to manufacturers and suppliers, demands greater security for consumer data.
- Even with the increased awareness about cyberattacks and breaches, employees are falling prey to social attacks. As per Verizon’s Data Breach Index Report 2019, financial pretexting and phishing represented 98% of the social incidents. Among 93% of all the breaches investigated, emails continued to be the main entry point (96% of such cases).
Scope of the Report
Fraud detection solutions enable organizations to detect fraud and help the organizations in the required processes that prevent these fraudulent activities from affecting their IT systems (especially linked to financial transactions and electronic payment solutions). The scope of the study includes various type of FDP solutions provided by vendors, which include specific types of modules, such as analytics, GRC, authentication, reporting, etc.
|Governance, Risk, and Compliance (GRC) Solutions|
|Scale of End User|
|Type of Fraud|
|IT and Telecom|
|Energy and Power|
|Other End-user Industries|
|Middle East and Africa|
Key Market Trends
BFSI Expected to Exhibit a Significant Rate of Adoption
- Fraudulent activities in the industry have evolved over the decades. While it was previously limited to cheque frauds and wire frauds, with the growth of the cyber sphere and the accompanying expansion of the cybercriminal realm, it has taken on more virtualized forms.
- The increasing technological penetration, coupled with digital channels such as internet banking and mobile banking, are becoming prominent choices of customers for banking services, making it a crucial need for banks to leverage fraud prevention solutions.
- The fraud prevention and detection represents one of the biggest areas of concern for financial institutions and is likely to become one of the prominent drivers for IT spending. Moreover, online transactions fraud, insurance claim frauds, and card related frauds have been increasing the usage of these solutions in the insurance and banking and financial services sector.
- The potential risk of fraud has been one of the biggest in online payments, which is anticipated to grow in tandem with the availability of digital customer relationships, as more companies are now offering online payments.
- Out of all the industries, BFSI has been most prone to insiders/employees, in terms of the types of fraudulent activities. There have been multiple instances where employees have been accused of fraud (for instance, PNB fraud in India). In order to prevent these, the industry needs robust fraud detection and prevention solutions.
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North America to Dominate the Market
- Digital transactions in North America, coupled with the use of online banking, are increasing at a remarkable rate, thus, increasing the chances of fraud. The fraud detection and prevention solutions can help prevent any online breach of sensitive data and transactions. Increasing cases of fraud are expected to propel the market’s growth in the region over the forecast period.
- Cybercriminals are increasingly targeting business and medical institutions to gain personal data of the victims. The personal data is then often used for socially engineering their attacks, which are more likely to trick the victim as compared to traditional cyberattacks. In fact, as of 2019, 75% of the total data breaches recorded in the United States were reported in the business and medical sectors.
- In October 2019, the three healthcare providers operated by DCH Health Systems in the country were attacked by a ransomware strain known as Ryuk. All these healthcare centers have implemented emergency procedures to ensure the safety of their patients, and the company is working on attack diagnosis. Such cyberattacks are expected to increase in the country across domains, which may fuel the demand for prevention solutions in the market.
- Additionally, the use of credit cards is highly prevalent in the region, particularly in the United States. In September 2017, one of the largest credit reporting agencies in the region, Equifax, announced a security breach, in which the data of about 143 million users was illegally accessed. Fraud detection and prevention measures are necessary to counter or mitigate risks in such instances.
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The Fraud Detection and Prevention Market is moderately fragmented with few firms enjoying a small share in the market. The companies keep on innovating and entering into strategic partnerships in order to retain their market share.
- January 2021 - SAP launched a new collection of services and software, offered as a single subscription product called “Rise with SAP,” designed to assist customers with cloud migration and digital transformation initiatives. As part of the Rise with SAP announcement, the company said it is acquiring Signavio, a Germany-based developer of business process intelligence and process management tools. The Rise with SAP offering is built around SAP software and services, with S/4HANA Cloud and the SAP Business Technology Platform at the core, with the software available through SAP’s private cloud service as well as hyperscale public cloud platforms such as Azure and Amazon Web Services.
- February 2021 - SAS acquired Boemcka, a UK-based technology company having its research and development center in Serbia dealing with the deployment of low code or no code applications and analytical management of workload. This acquisition strengthens the potential of SAS Viya, a platform of SAS Institute Inc., to expand its analytical division allowing new innovations.
- December 2020 - IBM acquired Montreal-based fintech company, ExpertusTechnologies Inc. The acquisition strengthens IBM's portfolio as an end-to-end digital payments solution provider and further advances IBM's hybrid cloud and AI strategy. By this, IBM continues improving fraud detection and enforcement of payments industry standards.
Table of Contents
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET DYNAMICS
4.1 Market Overview
4.2 Industry Value Chain Analysis
4.3 Industry Attractiveness Porters Five Force Analysis
4.3.1 Threat of New Entrants
4.3.2 Bargaining Power of Buyers/Consumers
4.3.3 Bargaining Power of Suppliers
4.3.4 Threat of Substitute Products
4.3.5 Intensity of Competitive Rivalry
4.4 Market Drivers
4.4.1 Increasing Volume of Non-cash Payment/Transaction Volumes
4.5 Market Restraints
4.5.1 Lack of Integration Capability with All Verticals
4.6 Assessment of COVID-19 Impact on the Industry
5. MARKET SEGMENTATION
5.1.1 Fraud Analytics
5.1.5 Governance, Risk, and Compliance (GRC) Solutions
5.2 Scale of End User
5.3 Type of Fraud
5.4 End-user Industry
5.4.3 IT and Telecom
5.4.5 Energy and Power
5.4.7 Other End-user Industries
5.5.1 North America
5.5.3 Asia Pacific
5.5.4 Latin America
5.5.5 Middle East and Africa
6. COMPETITIVE LANDSCAPE
6.1 Company Profiles*
6.1.1 SAP SE
6.1.2 IBM Corporation
6.1.3 SAS Institute Inc.
6.1.4 ACI Worldwide Inc.
6.1.5 Fiserv Inc.
6.1.6 Experian PLC
6.1.7 DXC Technology Company
6.1.8 BAE Systems PLC
6.1.9 RSA Security LLC (Dell Technologies Inc.)
6.1.10 Oracle Corporation
6.1.11 Nice Ltd.
6.1.12 Equifax Inc.
6.1.13 Lexisnexis Group
6.1.14 Fair Isaac Corporation
6.1.15 Cybersource Corporation
6.1.16 Global Payments Inc.
6.1.17 Feedzai Inc.
7. INVESTMENT ANALYSIS
8. FUTURE OF THE MARKET
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Frequently Asked Questions
What is the study period of this market?
The Fraud Detection and Prevention Market market is studied from 2018 - 2026.
What is the growth rate of Fraud Detection and Prevention Market?
The Fraud Detection and Prevention Market is growing at a CAGR of 18.19% over the next 5 years.
Which region has highest growth rate in Fraud Detection and Prevention Market?
Asia Pacific is growing at the highest CAGR over 2021- 2026.
Which region has largest share in Fraud Detection and Prevention Market?
North America holds highest share in 2020.
Who are the key players in Fraud Detection and Prevention Market?
SAP SE, IBM CORPORATION , Sas Institute Inc. , ACI Worldwide Inc., Fiserv inc. are the major companies operating in Fraud Detection and Prevention Market.