Global Fraud Detection and Prevention Market - Segmented by Solution (Fraud Analytics, Authentication, Governance, risk and compliance (GRC), Reporting and Visualisation), Fraud type (Internal and External), Scale of End User (Small, Medium and Large), End-User (BFSI, Retail, Government) and Region - Growth, Trends and Forecasts (2018 - 2023)
The global fraud detection and prevention market was valued at USD 12.37 billion in 2017, and is expected to reach USD 31.11 billion by 2023, registering a CAGR of 16.62% during the forecast period of 2018-2023. The need for fraud detection and prevention solutions has been increasing, with the rising revenue losses due to the rise in number of frauds across the globe. Such solutions are required mostly in industries that have more monetary transactions, such as BFSI, telecommunications, government, and retail sectors. The adoption rate of fraud and prevention solutions has also been increasing in other industries, such as professional services, manufacturing, healthcare, and transportation.
Rising Number of Online Transaction Expected to be the Major Driver for the Market
With the booming e-commerce industry, the banking and financial sector is experiencing a steep increase in the number of online transactions. The rise of online transactions is also helping SME owners to avoid huge costs of establishing centers in big cities. Personalized banking services for customers, such as ATM kiosks, mobile banking, internet banking, and social media, are the driving forces for digital transactions. Emerging payment gateways, such as PayPal, AliPay, Apple Pay, CCAvenue, Google Wallet, PayZippy, CitrusPay, and EBS, are facilitating safe and secure authorization of payments.
The transaction carried out at a bank branch is 30 times more expensive, when compared to an online transaction. It is a matter of providing convenience to customers of those banks, who have their presence through branch banking. However, it is a necessity for banks with fewer branches to have an online presence. Citibank, with its more than 100 years of existence in India, gets 60% of its transaction requests through internet, whereas ICICI and HDFC experience 35-40% of online transactions. With more people gaining access to internet through their smartphones and other portable devices, lower-tier cities and underdeveloped regions can emerge as strong drivers of online shopping.
Multi-factor Authentication is One of the Important Methods to Prevent Fraud
Enterprises are now inundated with security aspects, while they are working on cloud migrations, influx of consumer devices, and other trends. Authenticating identities and privacy are becoming crucial tasks, which is why there is a growing adoption of multi-factor authentication services, as essential requirements in many organizations. There are more than 10 million Google authenticator downloads from the Play Store.
False Payment Requests Accounts For Over 26% Of Internal Fraudulent Activities
This generally arises when employees who are entitled to be reimbursed, for expenses incurred while performing their duties, claim expenses to which they are not entitled to. The best technique for preventing false payments will be a system of controls, which makes it necessary to submit detailed reimbursement requests, original receipts, supporting documentation, and reasons for the expenditure. Claims should also be made/accepted within a specified time period. Such a system will authenticate correctness of the claims and will limit the chances for a second claim for the same expenses, at a later date.
Around 64% Of Revenue In BFSI Is Lost Through Deliberate And Planned Falsification Of Policies And Claims
While considering the insurance industry in the BFSI sector, it was estimated that a significant amount of all insurance claims are false. The subsequent expenses, adding up to many billion dollars per annum, have a significant effect on insurance premiums, thus creating a competitive market environment. Considering the industry value chain analysis, insurance agencies, insurers, and intermediaries share the responsibility of minimizing frauds. The organizations of today are not just limiting themselves to identifying and analyzing the fraud, but are also applying predictive analytics of fraudulency. Data mining techniques create intelligent scorecards, providing the data necessary to create business rules, thus making early fraud detection and prevention possible.
Key Developments in the Market: