Fraud Detection and Prevention Market Trends

Increasing penetration  of online payment and banking services

Banks and other financial institutions are opening up to digital channels due to the rapid digitization of banking services and technological advancements. This has increased the instances and complexities of fraudulent activities. In such cases deploying fraud detection and prevention data systems is the topmost priority. There are additional problems related to cybersecurity threats. Illegal arms trade, smuggling, and organized crime generate huge amounts of proceeds. Anti-social elements use bribery, insider trading, and embezzlement to legitimize the origin of black money through money laundering. Criminals compromise access credentials and user authentication solutions to steal sensitive debit or credit card details leading to a huge amount of payment fraud. This will drive the demand for the fraud detection and prevention market in the coming years. Securing mobile banking channels is a must. 

Digital fraud detection

The emergence of AI and machine learning algorithms has drastically changed the scope of fraud prevention. In order to reduce the vulnerabilities of financial institutions related to online data transactions firms are regularly deploying AI-powered security solutions. This will fuel the growth prospects of the fraud detection and prevention market during the forecast period.  For instance, credit card fraud is a common thing. However, due to the increased computing capacity of cloud technologies organizations are relying on linear algorithms to differentiate between suspicious and positive transactions. It analyzes vast repositories of data to detect unusual patterns and pinpoint dodgy expenses. Moreover, banks are using AI tools and security as a service solution to monitor activities and prevent false positive alerts. Financial transactions are generally complex. Blockchain reduces the chances of threat by recording all the details of the transaction in real-time with easy access and approval of all the related parties. Through its secure infrastructure, it provides strong authentication systems that allow only certain parties or people to access the original version of the data. In order to make changes participants need the approval of all related stakeholders. The technology also allows efficient tracking of products. 

Lack of specialized security personnel

Enterprises are increasingly dealing with fraud and cyberattacks. However, there is a lack of an insufficient Cybersecurity workforce. This will hamper the growth prospects of the fraud detection and prevention market in the forthcoming years. Professionals do not have the requisite skills to analyze and identify suspicious transactions. Over-reliance on legacy software and hardware will cost companies huge amounts of money. Often IT teams are unable to update the servers where all the essential information of the company is stored. 

Fraud Detection and Prevention Market Analysis

Based on type, the authentication solutions segment is expected to dominate in the fraud detection and prevention market share as these systems store client credentials and sensitive information. Companies are turning to single-factor and multi-factor authentication solutions to tackle the growing challenge of sophisticated fraud. 

Based on application, the electronic payment segment is likely to maintain its dominance over the forecast period due to the rising use of mobile banking, online payment, mobile wallet transactions, etc. 

Based on region, North America is expected to witness considerable growth due to rising instances of payment fraud, identity thefts, and money laundering cases. 

Fraud Detection and Prevention Market by Type

• External Threat
• Insider Threat

Fraud Detection and Prevention Market by Application

• Enterprise
• Financial Services
• Government
• Others

Major Players in the Fraud Detection and Prevention Market

• IBM (US)
• FICO (US)
• Oracle (US)
• SAS Institute (US)
• BAE Systems (UK)
• DXC Technology (US)
• SAP (Germany)
• ACI Worldwide (US)
• Fiserv (US)
• ThreatMetrix (US)
• NICE Systems (Israel)
• Experian (US)
• LexisNexis (US)