Fraud Detection and Prevention (FDP) Market Size By Type (External, Internal), By Component (Solution {Fraud Analytics, Identity and Authentication, GRC, Monitoring and Reporting}, Service {Professional Service, Managed Service}), By Application (Money Laundering, Credit and Debit Fraud, Mobile Fraud, Identity Threat, Electronic Fraud), By End-Use (Banking, Insurance, Government, Healthcare, E-commerce, Education), Industry Analysis Report, Regional Outlook (U.S., Canada, UK, Germany, France, Italy, Spain, Denmark, Netherlands, Sweden, China, Japan, India, Singapore, Australia, South Korea, Brazil, Mexico, Argentina, Colombia, UAE, Saudi Arabia, South Africa), Growth Potential, Competitive Market Share & Forecast, 2019 - 2025

Industry Trends

Fraud Detection and Prevention Market size estimated at USD 20 billion in 2018 and is predicted to grow at a CAGR of over 23% from 2019 to 2025.
 

Get more details on this report - Request Free Sample PDF
 

The increasing need to minimize fraud losses and maintain revenues from genuine transactions is propelling the growth of the fraud detection and prevention market. The advent of advanced technologies, such as big data, data analytics, predictive modeling, deep learning, cloud computing, machine language, and AI, is proliferating the market growth. The growing number of online & mobile banking services coupled with the increasing number of real-time transactions is supporting the market growth. The financial & government institutions are increasingly embracing FDP solutions to mitigate both external & internal frauds, contributing to the regional & global economy. The burgeoning e-commerce sector coupled with the growing use of digital payment methods is helping fraudsters to target certain loopholes and commit frauds. 
 

The enterprises present in the U.S. and Canada are facing cybercrimes such as email hacking, account stealing, credit card identity theft, ransomware, DDoS attacks, and phishing, resulting in monetary losses for enterprises. For instance, in February 2018, according to the White House Council of Economic Advisers, the U.S. economy lost between USD 57 million to USD 109 million in 2016 due to malicious cyber activities. As a result, enterprises in the region are growingly adopting FDP solutions to mitigate monetary losses, resulting in market growth. Gains due to a decrease in card-present frauds are anticipated to be completely overshadowed by the rise in loss related to card-not-present (CNP) frauds due to the implementation of EMV chip technology in the country. For instance, in 2018, CNP fraud losses in the U.S. are forecast to be double from more than USD 3 million in 2015 to USD 6.2 million in 2018.
 

Request 15% Free Customization on this Report
 

 Fraud Detection and Prevention (FDP) Market, By Type

The external fraud held more than 60% FDP market share in 2018 and is estimated to maintain its dominance over the forecast timeline due to the growing credit/debit card frauds, identity theft, cheque frauds, frauds from external vendors & contractors (exaggerated/fake bills, rigging of bids), data breaches & theft of intellectual property, tax frauds, bankruptcy frauds, fake insurance claims, unsecured loans, and traditional frauds such as bribing, theft, and shoplifting. The absence of fraud assessment departments across enterprises is supporting the increase in external frauds. For instance, according to the Association of Certified Fraud Examiners (ACFE) report 2018, 84% of small businesses and 51% of large businesses do not have any formal fraud assessments, making them highly vulnerable to external frauds.
 

 Fraud Detection and Prevention Market, By Component

Fraud analytics is estimated to register more than 24% of CAGR over the forecast timeline due to the growing demand among end-use to detect fraud at the earliest. Fraud analytics provides a significant edge over traditional methods for fraud detection. The identification of patterns and trends can combat new fraud techniques, which traditional methods usually miss. Predictive models in fraud analytics can predict rare events, which are low in occurrence but significant in impact such as stock market frauds. Time-sensitive fraud cases such as credit card frauds can be very quickly detected & losses can be minimized in comparison to traditional methods where automated processing is not possible.
 

By Application

Identity theft held over 10% of the fraud detection and prevention (FDP) market share in 2018. Fraud detection and prevention are difficult in case of identity theft cases due to the lack of awareness on the part of a victim and also due to the delayed nature of its impact. Most identity thefts are only realized by victims months later, by the time most of the damage has been already done. Customer awareness is the most important step that can be taken to avoid such cases. It includes stealing or obtaining someone’s personal information without their permission to commit fraudulent activities. This involves using stolen or forged identity documents to gain access to bank accounts, credit card/debit card PIN, and payment app login information.
 

Singapore Fraud Detection and Prevention Market Size, By Type, 2018 & 2025 (USD Million)

Get more details on this report - Request Free Sample PDF
 

FDP Market, By End-Use

The e-commerce segment is expected to exhibit more than 22% CAGR over the forecast timeline due to the growing number of dummy e-commerce websites. With the proliferation of internet services globally and the increased spending power of consumers, the e-commerce market has undergone a huge growth. This has made e-commerce frauds an attractive option for fraudsters. The vast number of global transactions on e-commerce platforms also makes it increasingly complex to detect such frauds, making it easier for fraudsters to carry out scams. The anonymity in carrying out business without physical interaction with customers has also led to an increase in such illegal activities.
 

The banking segment held over 29% of the market share in 2018 and will grow significantly over the forecast timeline due to the growing digitalization across banks. The banks are pushing consumers to increase the use of digital payment methods, which is another prominent factor in the growing use of FDP solutions. Stringent Know-Your-Customer (KYC) regulations and improved auditing systems have reduced conventional fraudulent activities, yet online-based banking frauds are still on the rise. This is attributed to the relative ease of carrying out fraud online and lesser risk of being caught. Cost-effective solutions are being offered by fraud detection and prevention services providers, which are expected to curb online frauds in the banking sector.
 

By Region

North America fraud detection and prevention market held over 35% share in 2018 and is estimated to maintain the industry share over the forecast timeline due to the presence of prominent market players such as FIS, IBM, and Fiserv, contributing to the market revenue in the region. These market players provide FDP solutions to their clients across the globe. For instance, in May 2019, Fiserv, Inc. announced that Mercury Payment Services (Middle East) and Arion Bank (Iceland) will deploy Fiserv technology to effectively manage their fraud risks and streamline Anti-Money Laundering (AML) processes. Changing technological landscape, the proliferation of smart devices, and inconsistent applications of changing regulations & compliance policies are the key factors propelling the market.
 

Europe Fraud Detection and Prevention (FDP) Market Share, By Region, 2018 

Get more details on this report - Request Free Sample PDF
 

Europe FDP market is projected to register over 22% CAGR over the forecast timeline due to stringent government regulations related to data protection, money laundering, and other fraudulent activities. The government is imposing stringent regulations on companies operating in the country to reduce fraudulent transactions. For instance, in January 2018, France is proposing to impose obligations for French registered companies to use certified VAT software on B2C cash and credit transactions. The measure is seeking to tackle frauds estimated to cost France USD 15.65 million (Euro 14 million) per annum. The proliferation of e-commerce companies including increasing mobile retail coupled with the rising digitalization in payment methods is propelling the country’s net fraud loss. The banks and payment providers in the country are pushing consumers to increase the use of digital payment methods.
 

Competitive Market Share

The fraud detection and prevention (FDP) market is highly fragmented due to the presence of several multinational and regional players. The presence of prominent software developing companies, such as IBM, SAP, and SAS Institute, which provide FDP software to several regional and global key payment technology providers such as FIS, Experian, Fiserv, and PayPal. Changing technological landscape and the rise in new fraud types are supporting the entry of innovative & new market players. The strategic alliances among market players will substantially diverse the market share.
 

Major firms operating in the market are ACI Worldwide, Arbutus Software, Avast Software, AVG, DXC Technology, ESET Endpoint Security, Experian, Finserv, First Data, FIS Global, Friss, GreatHorn, Guardian Analytics, IBM, LexisNexis Risk Solutions, SAP, SAS Institute, SpyCloud, Trulioo, Verifi, and Webroot SecureAnywhere.
 

Industry Background

The FDP solutions prevent money laundering and manage data breaches. It improves operational efficiency of end-use organizations. It helps enterprises in complying with several regulations including anti-money laundering. The solution monitors, investigates, and detects fraudulent transactions in real-time to reduce the risk of NPAs. The latest technology is deployed across all layers of decision making, product innovations, service delivery, and customer connectivity to attract new customers and deliver the type of experience they expect. The shortage of skilled professionals further increases challenges related to fraud detection & prevention for enterprises. The advanced FDP solutions provide a competitive advantage over conventional FDP solutions, which help the enterprise detect frauds in real-time.