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The global fraud detection and prevention market was valued at $20,614.4 million in 2018, and is further expected to generate $47,903.1 million revenue by 2024, exhibiting a CAGR of 15.1% during the forecast period. Growing usage of artificial intelligence (AI) and machine learning (ML) for mitigating fraudulent activities, rising need to protect online banking and insurance sector, coupled with increasing frequency of phone scamming against the elderly, are the major factors driving the growth of the market across the globe.
Among all regions, the Asia-Pacific (APAC) fraud detection and prevention market is expected to witness the fastest growth during the forecast period. This is due to rapid economic growth in major countries, increasing presence of large enterprises, and surging IT industry in the region. Several countries, such as South Korea, India, Singapore, and China, are preferred destinations for IT outsourcing, leading to increasing presence of large enterprises in these countries. This leads to increasing potential threats of fraudsters to target sensitive information.
Factors Governing Fraud Detection and Prevention Market
Leveraging hybrid analytical approach is one of the key trends witnessing in the fraud detection and prevention market. Hybrid analytical approach includes integration of several aspects of fraud detection into single technological solution. Integrated applications rapidly connect each aspect of a fraud event and analyze each strand individually as a potentially larger threat. Hybrid analytical approach is being offered by several market players with growing demand, such as SAS Institute Inc. and TransUnion LLC. Such solution offers a holistic enterprise view of fraudulent behavior and supports prepayment detection and prevention.
Increasing concern regarding mobile frauds is one of the key factors driving the adoption of fraud detection and prevention solutions across the globe. Online transactions via mobile devices are surpassing transactions via desktop devices, leading to increasing fraudulent activities. In early 2019, it has been recorded that about 49% of all risky transactions were held via mobile devices, as compared to around 30% in 2018. Cybercriminals are increasingly using mobile emulators that run on desktops, and enable fraudsters to mimic different Android and iOS devices. These are driving the growth of the fraud detection and prevention market.
Usage of AI and ML for mitigating fraudulent activities is further contributing to the growth of the fraud detection and prevention market. ML is increasingly being leveraged to detect patterns in fraud attacks and combat chances of financial losses. AI-powered technologies are integrated with big data and ML to enhance operational workflow and enable organizations to mitigate known and unknown frauds.
Fraud Detection and Prevention Market Segmentation Analysis
Based on offering, the software category held larger share in the fraud detection and prevention market in 2018, owing to the increasing demand for advanced solutions to eliminate risks and fraudulent activities. The trend is expected to continue during the forecast period, where this category is further projected to hold larger market share by 2024.
Based on type, the internal category held larger share in the fraud detection and prevention market in 2018, and is further expected to witness faster growth during the forecast period. This can be attributed to the increasing frequency of internal frauds within organizations, especially in larger-sized firms, where the business complexities are huge and scope for fraudsters to target is high.
On the basis of threat type, the digital ad frauds category is projected to advance at the fastest CAGR during the forecast period. APAC and LATAM would majorly drive the market in this category during this period.
Geographical Analysis of Fraud Detection and Prevention Market
Globally, the North American fraud detection and prevention market held the largest share in 2018. This is attributed to the adoption of cloud-based technology by large and small businesses for various operations, resulting increasing fraudulent activities. Additionally, intense research and development (R&D) for internet of things (IoT) integration in the fraud detection and prevention systems is projected to steer the market growth during the forecast period.
On the contrary, the APAC fraud detection and prevention market is predicted to witness the fastest growth throughout the forecast period. Businesses in APAC have begun accepting biometrics and other advanced analytics methods to mitigate fraudulent activities in their organizations. Facial recognition, voice recognition, and advanced AI solutions are being implemented to secure consumer data throughout the region, with China leading the market.
Competitive Landscape of Fraud Detection and Prevention Market
The fraud detection and prevention market has a fragmented structure, with the presence of a number of multinational and regional market players. The majority of the market share, however, is held by five companies, namely, IBM Corporation, RELX Group, Experian PLC, Fiserv Inc., and Nice Systems Ltd. Additionally, the market is witnessing a perpetual change in technological landscape with the rise in innovations and introduction to new fraud types. This is further leading to the accelerating rate of new entrants in the market.
Recent Strategic Developments of Fraud Detection and Prevention Market Players
In recent years, major players in the global fraud detection and prevention market have taken several strategic measures, such as mergers & acquisitions, product launches, and partnerships, to gain a competitive edge in the industry. For instance, in October 2019, NICE Systems Ltd. announced the addition of AutoDiscovery capabilities to its analytics offerings. These capabilities would provide organizations with cross-channel insights regarding customer pain-points, by using AI-based ML. NICE Nexidia's AutoDiscovery capabilities include automatic topic identification, anomaly detection, and query coverage analysis.
Further, in January 2019, Fair Isaac Corporation (FICO) announced partnership with Conductor, a Brazilian company specializing in electronic payments, to prevent Brazilian payment cards from fraudulent risks. Under this partnership, FICO’s Falcon Platform would safeguard credit cards processed by Conductor.
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|Countries Covered||U.S., Canada, U.K., Germany, France, Spain, Russia, Sweden, Italy, Netherlands, China, India, Japan, South Korea, Singapore, Indonesia, Mexico, Brazil, Argentina, Chile, Colombia, U.A.E., Saudi Arabia, South Africa, Egypt, Turkey|
Key Questions Addressed/Answered in the Report