The global fraud detection and prevention market size was valued at USD 20.98 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 15.4% from 2021 to 2028. The growing concerns regarding digital frauds, despite technological advancements facilitating ease of payment options or data access, calls for the deployment of fraud detection solutions. Sophistication in digital frauds, financial crimes, and cyberattacks are challenging the growth of several businesses worldwide. With the increasing popularity of e-banking, digital payment apps, and cross-border transactions, the number of fraudulent cases involving identity thefts, data breaches, and payment frauds is also increasing. All these aforementioned factors are creating avenues for market growth.
The ever-evolving technology landscape has amplified cybercrimes and cyber frauds over time. Hackers continue to evolve and have become skilled in finding vulnerabilities and loopholes in systems. The resulting action increases the risk of a corporate data breach, and its consequent impact increases economic losses for a business. Therefore, the need to curb losses from data breaches has compelled enterprises to opt for proactive fraud prevention solutions, a trend expected to continue over the next few years.
Incumbents from industries, such as BFSI, healthcare, and e-commerce, are proactive in recognizing the need to update outdated tools and existing strategies to combat digital fraud. However, certain businesses still use and follow conventional fraud investigation methods, which are complex and time-consuming. Sophistication in Advanced Persistent Threats (APTs) and fraudsters continuously modify their intruding techniques and remain undetected using traditional concepts. Thus, with the adoption of analytical and authentication tools, real-time detection in fraudulent behaviors becomes easy and is subsequently expected to favor the adoption of fraud detection and prevention (FDP) solutions.
As such, proactive measures have become one of the top priorities among industries. Customer-centric fraud prevention techniques have become a part of business security strategy. Adoption of such techniques and measures bridges the gap between improved payment experience and security. For instance, financial institutes adopt voice recognition technologies across their contact centers to reduce identity fraud attempts. In addition, the application of fraud authentication technologies, such as device fingerprinting and geolocation, adds another layer in identity theft security and enhances customer verification.
The rising adoption of web applications and digital payment applications has resulted in an increased number of online frauds and scams. Cyber threat agents target such vulnerable applications to gain personal data. These fraudulent activities surged in 2020, during the COVID-19 pandemic. According to the F5, Inc., a U.S.-based security solution provider’s 2020 phishing report, a 15% growth in phishing incidents was observed. Furthermore, the report also highlighted a significant rise in phishing attacks accounting for 220% yearly average during the peak of the pandemic in comparison to the previous year.