Fraud detection and prevention market to hit $100 billion by 2027
The fraud detection and prevention (FDP) market is expected to surpass $100 billion by 2027, as reported in a research study by Global Market Insights. The growing adoption of mobile phones and digital banking applications is proliferating the market growth.
The growing instances of cyberthreats and money laundering across sectors are driving the need for FDP solutions. The rapid digitalization across sectors, such as fintech, healthcare, etc., has increased the frequency of cyberattacks.
From the past few years, the fintech sector has been facing instances of cyberattacks, increasing the demand for FDP solutions. The fintech solution providers are integrating their digital payment platform with FDP solutions to provide more secure and reliable services.
The identity and authentication segment is poised to capture substantial market share by 2027. Increasing online fraud activities. such as identity thefts and account takeovers, especially in the e-commerce sector is likely to fuel the industry revenue. This has increased the importance of identity & authentication to mitigate fraud risks. Identification and authentication are the security approaches to control the access of any digital service or platform based on the authenticated identity of a user.
The internal fraud type is anticipated to grow at over 25% CAGR between 2021 to 2027 due to the rising collusion among employees. Internal fraud is any fraudulent activity committed against an enterprise by its own directors, executives, or employees for financial gains. Internal frauds are attributed to the lack of personal morality and ethics, poor or no internal controls within the enterprise, and financial pressure on employees (such as high debts and low salary). It includes three major categories – corruption, asset misappropriation, and financial statement frauds.
The credit & debit fraud segment is expected to hold 30% of the FDP market share in 2027. Credit & debit card frauds involve fraud, theft, or any illegal transaction performed by a payment card (debit/credit), using the card as a fraudulent source of money for the transaction. Banks are increasingly adopting robust anti-fraud measures, such as electronic chip-based cards (EMV cards), anti-skimming ATM machines, and Two Factor Authentication (2FA), for protecting transactions against fraud activities.
The healthcare sector is forecast to register 20% gains through 2027 owing to the rising number of fraudulent claims such as life insurance. The healthcare fraud involves fraudulent activities with the intention of defrauding medical insurers, government healthcare programs & equivalent private programs, and medical patients. For instance, in October 2020, UVM Health Network was affected by a cyberattack due to which it had shut down its 5,000-healthcare systems. The systems were disconnected for 40 days.
Asia Pacific is projected to grow exponentially in the fraud detection and prevention market with a substantial growth rate throughout the forecast timeline. The growth is attributed to the increasing digitalization across sectors and supportive government initiatives for propelling digital transactions in the region. Moreover, the growing instances of account take over, identity theft, phishing, etc., are creating ample growth opportunities.