According to a recent study conducted by Grand View Research, Inc., the global fraud detection and prevention market is expected to experience substantial growth, reaching a value of £90.07 billion by 2030. The market is projected to grow at a compound annual growth rate (CAGR) of 17.6% from 2023 to 2030.
The widespread adoption of mobile banking practices has been triggered by the proliferation of smartphones and the continued rollout of high-speed internet networks. Mobile banking offers users the convenience of transacting from anywhere, reducing the need to visit physical bank branches.
The GSMA report reveals that in 2018 alone, nearly 300 million individuals globally connected to mobile internet for the first time, resulting in a total connected population exceeding 3.5 billion.
With the rise in popularity of mobile-based payment applications, including Paytm, Apple Pay, Google Pay, and PayPal, the number of smartphone users has surged. However, these applications have also become prime targets for fraudsters, prompting banks and payment services companies to adopt fraud detection and prevention solutions. These measures aim to counter the intrusion threats posed by fraudsters and protect users from financial losses.
Key industry insights and findings from the report include:
- Service segment: The market’s service segment is anticipated to witness the highest growth rate from 2023 to 2030. Organisations in developing economies are increasingly implementing robust fraud prevention strategies and require integration, consulting, training, and support services from fraud prevention service providers. This demand for professional consulting and third-party services to detect fraud in real time is expected to drive the segment’s growth.
- Fraud analytics segment: The market’s fraud analytics segment is projected to experience the highest growth rate from 2023 to 2030. Predictive and preventive analytical tools play a crucial role in helping enterprises take essential remediation measures. The potential benefits offered by these solutions are expected to drive the segment’s growth.
- Managed services segment: The market’s managed services segment is expected to witness the highest growth rate from 2023 to 2030. Managed service providers play a vital role in monitoring business transactions and identifying unusual user behaviour in real time across vast amounts of data. This capability drives the adoption of managed services for fraud detection and prevention.
- Identity theft segment: The identity theft segment is projected to exhibit the highest growth rate over the forecast period. As criminals adapt to authentication processes, identity theft practices continue to rise, contributing to the growth of this segment.
- Large enterprise segment: Large enterprises are expected to occupy the largest share of the market by 2030, accounting for over 70% of the market share. Large enterprises are particularly susceptible to various fraudulent activities, including phishing, money laundering, and distributed denial-of-service attacks, which can significantly impact their profitability.
The report also highlights the retail and e-commerce vertical as the fastest-growing segment over the forecast period. With a growing need to safeguard customer information, such as credit card and bank account details, the adoption of fraud detection and prevention solutions is becoming increasingly prevalent in the retail and e-commerce sector.
The outbreak of the COVID-19 pandemic in 2020 further accelerated the adoption of mobile banking services as individuals sought to minimise physical contact and travel. MX, a digital transformation platform, revealed that mobile banking engagement increased by 50% in April 2020, as consumers turned to mobile banking to manage their finances during economic uncertainty.
However, the rise in mobile banking adoption also introduced vulnerabilities to fraudulent activities such as account takeovers, carrier data breaches, call centre fraud, subscription fraud, and phishing. As a result, the demand for fraud detection and prevention solutions is expected to grow significantly in the coming years.