Fraud Detection And Prevention Market Strategies: Best Practices For Businesses

The global fraud detection and prevention market size was valued at USD 25.67 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 17.6% from 2023 to 2030. Some of the major factors driving the growth of the market include increased sophistication of cyberattacks, increased online fraud, and a growing preference for advanced analytics for the identification of threat patterns, among others. Online fraud risks have been increasing in line with the rising popularity of B2C, B2B, and C2C e-commerce transactions, which often involve a mutual exchange of critical information, identity information, and personal data of individuals and enterprises.

Furthermore, the boom in mobile gaming and the growing use of social media also adds to the risks of subsequent fraud. While frauds are getting more sophisticated, the losses from these attacks are also increasing. An analysis of over 44 billion events across 800 million active users globally by Help Net Security revealed a rapid increase in the complexity of emerging attacks. This has triggered the need for a strong emphasis on contextual detection strategies capable of proactively thwarting intrusions before any potential losses.

Gather more insights about the market drivers, restrains and growth of the Fraud Detection And Prevention Market

Detailed Segmentation

Component Insights

The solution segment is estimated to occupy the largest share of the market, over 63% in the year 2022, and is expected to continue its dominance over the forecast period. The growing incidences of Account Take Overs (ATO) and phishing emails have compelled enterprises to adopt advanced tools and solutions to detect anomaly patterns of fraud at a preliminary stage. These solutions process large data sets in real-time and reduce the detection time. In addition, these solutions also help enterprises in meeting compliance requirements.

Solution Insights

The authentication solutions segment dominated the market in 2022 and accounted for more than 40% of the overall revenue share in 2022. Over the years, enterprises have relied on authentication solutions to secure customer credentials and customer-sensitive information. However, the increasing sophistication of fraud attempts in customer-facing applications has compelled organizations to opt for advanced authentication solutions with single-factor & multi-factor, and voice biometrics capabilities. Furthermore, securing critical information shared within the enterprises using cloud technologies in every industry vertical to avoid data breaches is important. Thus, the need to secure credentials and offer safe access to specific users within the organizations is expected to augment the segment growth over the forecast period.

Service Insights

The professional services segment held the largest revenue share of nearly 70% in 2022 and is expected to retain the leading position throughout the forecast period. The professional services comprise consulting, support, and training & development services. Vendors offering these services assign a dedicated team of experts to help organizations deploy technologies and train professionals. Training and support programs is one of the necessary element offered as a part of the professional services, as it helps professionals to mitigate security gaps and implement fraud detection procedures.

Application Insights

The payment fraud application accounted for the maximum revenue share of above 52% in 2022 and is expected to grow at a steady CAGR over the forecast period. The growing demand for cashless payment modes and e-wallets among consumers has created avenues for fraudsters. Vulnerabilities or loopholes in these applications can provide easy access to banking and financial reserves. Thus, detecting such frauds in real-time and the need to patch all the vulnerabilities within the applications is contributing to the segment growth.

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Organization Size Insights

The large enterprise segment accounted for the largest revenue share of more than 70% in 2022. Fraudulent activities ranging from phishing and money laundering to distributed denial-of-service are prevalent among large enterprises, and such attacks could negatively impact business profit. Thus, large enterprises must adopt preventive solutions and services. Investments focused on deploying preventive measures are critical business strategies to ensure organizational data security. However, the SME segment is estimated to record the fastest CAGR over the forecast period.

Vertical Insights

The BFSI segment had the highest revenue share of more than 28% in 2022. Rapid digitization and electronification of operations have made the incumbents of the banking and financial services industry a popular target among cybercriminals. Furthermore, the growing popularity of products, such as stockbroking, insurance, and mutual funds, among consumers to digitally access these solutions across several touchpoints compels enterprises to adopt preventive tools to track fraud and their activities. In addition, growth in identity theft and card fraud cases across the globe is promoting the adoption of authentication solutions in this segment.

Regional Insights

North America occupied more than 40% of the fraud detection and prevention industry in 2022. The growth of this region can be attributed to the presence of some of the top players in the market, who are based in North America. Some significant companies based in North America include IBM, Microsoft, and Oracle. Moreover, the region is home to the world's largest economy, the U.S., which demands high usage of fraud detection and prevention for various activities such as IT, manufacturing, and healthcare. Thus, the abovementioned factors are expected to drive the market's growth over the forecast period. Asia Pacific region is projected to witness the highest growth rate of more than 16% from 2023-2030.

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