Fraud Detection And Prevention Market Size

Fraud Detection And Prevention Market Analysis

The Fraud Detection And Prevention Market size is estimated at USD 47.89 billion in 2024, and is expected to reach USD 126.69 billion by 2029, growing at a CAGR of 21.48% during the forecast period (2024-2029).

Fraud detection is typically a central component of a firm's loss prevention strategy, and in some cases, it is part of an organization's broader AML (anti-money laundering) compliance efforts. When fraud detection and related functions are incorporated into a broader AML context, the combination of the two is sometimes called "Fraud and Anti-Money Laundering" or "FRAML."

• Fraud detection helps companies protect their customers' transactions and accounts by spotting fraudulent activity before or as it occurs. According to the FBI, elder fraud victims lost an average of over USD 35,101 per victim in the United States in 2022, resulting in an overall loss of over USD 3 billion. Global fraud losses in 2021 exceeded USD 55 billion with technology enabling illegal funds to cross borders.

• Moreover, synthetic identity fraud cost US financial institutions an estimated USD 20 billion in losses in 2023. As the world becomes more digital, fraudsters are continuously evolving their tactics, and businesses need to improve their fraud prevention measures to protect assets and clients from fraud.

• As the world comes to terms with fraud's increasing diversity and sophistication of typologies, more regulation and enforcement will impact compliance requirements across the board. While a firm may not be directly subject to direct requirements today, fraud is a prerequisite for money laundering and can be linked to a broader criminal network. Firms incorporating fraud into their overall risk management strategy can improve consumer protection, compliance, loss management, and financial crime prevention.

• The efficiency of fraud mechanisms backs each vertical based on customer expectations. Fraud across various industries may include card payment fraud, healthcare reimbursement fraud, data anomalies, suspicious activities, money laundering, and various transaction risks.

• Various systems or fraud prevention tools make it difficult to cover all lines of defense and maintain a holistic view of risk exposure. Furthermore, they can result in a poor customer experience. If a consumer is using multiple vendors for different types of fraud detection across various channels, it is challenging to implement a consistent, integrated approach and the right risk balance. This is expected to restrain the market's growth.

• However, investments are being made to improve the fraud infrastructure and the preventative control framework. Firms are integrating machine learning and automated alert generation with behavioral analytics to better prevent bad actors from accessing their networks. In particular, machine learning and behavioral analytics will help identify fraudulent patterns that enable agile preventative controls to be developed and adapted to the latest fraud trends. Increasing fraud training and awareness will strengthen a company's prevention strategy and help fight fraud. Thus, with the growth in future investment in fraud detection solutions, the market is expected to grow in the forecasted period.