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Fraud Detection and Prevention (FDP) Market Size By Fraud 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), COVID-19 Impact Analysis, Regional Outlook, Growth Potential, Competitive Market Share & Forecast, 2021 – 2027

  • Report ID: GMI1775
  • Published Date: Dec 2021
  • Report Format: PDF

Industry Trends

Fraud Detection & Prevention Market size exceeded USD 20 billion in 2020 and is poised to register gains at nearly 25% from 2021 to 2027. Increasing need for minimizing fraud losses and maintaining revenues from genuine transactions is fueling the industry growth.
 

The rise in revenue loss due to numerous frauds is a prominent factor in the proliferation of the market. The businesses and organizations experience huge monetary & non-monetary loss by frauds. Rising initiatives to combat such fraudulent activities have propelled the demand for FDP solutions.
 

Fraud Detection & Prevention Market

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The FDP industry has received a strong impetus amid the ongoing COVID-19 pandemic. The market acceleration in FDP space has been substantial as criminals are continuing to exploit the opportunities created by the pandemic with mounting cases of the exploitation of economic stimulus measures. As per the April 2020 Global Fraud Survey Report published by the Association of Certified Fraud Examiners (ACFE), financial statement fraud caused a loss of over USD 8.7 million in 2020. With over 40% rise in chances of internal fraud amid the ongoing pandemic, the deployment of FDP solutions has become one of the paramount strategies for all enterprises.
 

Weakness in enterprise internal control systems in the U.S.

U.S. Fraud Detection & Prevention Market Size By Solution

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In the U.S. fraud detection & prevention market, the fraud analytics segment is likely to generate around USD 2 billion revenue in 2023. Fraud analytics provides a significant edge over traditional methods in fraud detection. The identification of patterns & 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 fraud. The weaknesses in internal control systems leading to occupational frauds and employee-vendor collusions have buoyed the demand of fraud analytics.
 

Circumventing of fraud detection methods by experienced employees in Germany

Germany Fraud Detection & Prevention Market Share By Fraud Type

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The internal fraud segment in Germany is poised to account for about 40% of the fraud detection & prevention market share by 2027. Internal frauds are on the rise in Germany owing to the spike in collusion among employees, helping them circumvent fraud detection systems that operate on independent checks and separation of duties. Experienced employees that have deep insights on internal monitoring and fraud prevention methods often collude to easily bypass such safeguards, which have accentuated the growth of internal fraud-oriented FDP solutions.
 

For instance, in September 2021, Finance Intelligence Unit (FIU), Germany's money laundering investigation agency, was accused of covering up internal fraud committed by banks. The fraud amounts to above USD 1.2 million of payments that are suspected to be tied to the drug & arms trade and terror financing.
 

Increase in illicit cross border money laundering in China

China Fraud Detection & Prevention Market Size By Application

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In China, the money laundering segment is expected to grow at over 25% CAGR during 2021 to 2027. Chinese authorities identify illegal fundraising; cross-border telecommunications fraud; weapons of mass destruction, proliferation finance, and other illicit finance activities linked to North Korea; and corruption in the banking, securities, and transportation industries as ongoing money laundering challenges. It was reported that between 2016 and 2020, money laundering cases across China increased by nearly 50%.
 

In July 2021, China’s Central Bank and major financial institutions announced to amend its Anti-Money Laundering Law. The amended law will improve the effectiveness of its legal framework to combat money laundering.
 

Increasing need of robust fraud detection techniques augmenting the Brazil banking industry

The banking sector in Brazil fraud detection & prevention market captured a substantial revenue share of nearly 30% in 2020. The increased anonymity of customers on account of branchless banking has made it easier to carry out frauds in banks. Unsecured lending by Brazilian banks has also propelled banking-related frauds since fraudulent customers do not have any stakes involved. The easy availability of hacking tools in online black markets and requiring low technical expertise to operate, has led to rising FDP deployment across the banking sector.
 

For instance, in November 2020, the Central Bank of Paraguay imposed a fine of USD 9 million on Brazil’s Banco Itau for breaking anti-money laundering regulation of the country. The bank failed to report suspicious transactions to the concerned authorities.
 

High prevalence of digital payment channels and surging e-commerce industry in Europe

Europe Fraud Detection & Prevention Market Share By Country

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Europe fraud detection & prevention market is projected to witness growth rate of about 25% through 2027. The regional industry is boosted by the rise in online shopping coupled with the proliferation of digital payment methods and fewer possibilities for customer verification by cross-border trade.
 

As per the June 2021 press release by FICO, Europe observed a surge in financial crimes and frauds in 2020, led by Norway with a 172% year-on-year increase in fraud attacks. Fraudsters are constantly scanning for access to poorly-protected accounts and opportunities to manipulate transactions, increasing the demand for FDP systems.
 

Launch of analytics-driven FDP solutions becoming a mainstream go-to-market strategy

Some of the major fraud detection and prevention market players are ACI Worldwide Inc., Arbutus Software Inc., Avast Software s.r.o, AVG Technologies, DXC Technology Company, ESET,spol. s.r.o, Experian PLC, Fiserv, Inc., First Data Corporation, Fidelity National Information Services, Inc, FRISS, GreatHorn, Inc., Guardian Analytics, IBM Corporation, LexisNexis Risk Solutions, SAP SE, SAS Institute Inc., SpyCloud, Inc., Trulioo, Verifi, Inc., and Webroot Inc.
 

The global FDP industry remains moderately consolidated with fintech giants, such as LexisNexis, SAP, IBM, and FIS, holding a major revenue chunk. Prominent players are pressurized to deliver innovation impelled by changing technological landscape, consumer preference, and stringent government regulations globally.
 

The market has also witnessed several strategic alliances between key participants to launch new products with added functionalities, maintaining the revenue share & profitability. In July 2021, Trulioo joined a new partnership with PayDo, Pollen, Sokin, and XanderPay for increasing customer base and product offerings in the European region. This partnership is helping Trulioo to offer more advanced and secure payment gateway solutions.
 

This market research report on fraud detection and prevention (FDP) includes in-depth coverage of the industry with estimates & forecast in terms of revenue in USD from 2017 to 2027 for the following segments:

Market, By Component

  • Solution
    • Fraud Analytics
    • Identity and Authentication
    • GRC
    • Monitoring and Reporting
    • Others
  • Service
    • Professional Service
    • Managed Service

Market, By Fraud Type

  • External Fraud
  • Internal Fraud

Market, By Application

  • Money Laundering
  • Credit and debit fraud
  • Mobile Frauds
  • Identity Threat
  • Electronic Fraud
  • Others

Market, By End-use

  • Banking
  • Insurance
  • Government
  • Healthcare
  • E-commerce
  • Education
  • Others

The above information has been provided for the following regions and countries:

  • North America
    • U.S.
    • Canada
  • Europe
    • UK
    • Germany
    • France
    • Italy
    • Spain
    • Netherlands
    • Sweden
    • Denmark
  • Asia Pacific
    • China
    • Japan
    • India
    • South Korea
    • Australia
    • Singapore
  • Latin America
    • Brazil
    • Mexico
    • Argentina
    • Colombia
  • Middle East & Africa
    • Saudi Arabia
    • UAE
    • Israel
    • South Africa

 

Authors: Preeti Wadhwani, Smriti Loomba

Frequently Asked Questions (FAQ) :

The global market for fraud detection & prevention surpassed USD 20 billion in 2020 and is estimated to record gains at over 25% up to 2027, says this GMI report.

Internal frauds, which are expected to hold more than 40% of the FDP market share in Germany by 2027, and external frauds are the common types of frauds.

The banking end-user segment in Brazil contributed to nearly 30% of the revenue share in 2020 and will witness expansion with the growing popularity of branchless banking.

The fraud detection & prevention industry in China from the money laundering application segment is poised to observe gains at over 25% CAGR through 2027.

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Premium Report Details

  • Base Year: 2020
  • Companies covered: 21
  • Tables & Figures: 507
  • Countries covered: 24
  • Pages: 330

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