The global fraud detection and prevention market was valued at USD 25.67 billion in 2022 and is anticipated to grow at a compound annual growth rate (CAGR) of 17.6% from 2023 to 2030. Several factors are fueling this growth, including the increasing sophistication of cyberattacks, the rise in online fraud, and a growing reliance on advanced analytics to identify threat patterns. The surge in online fraud risks correlates with the popularity of B2C, B2B, and C2C e-commerce transactions, which frequently involve the exchange of critical information, identity details, and personal data from both individuals and businesses.

Additionally, the boom in mobile gaming and the expanding use of social media are contributing to higher fraud risks. As fraud techniques become more sophisticated, the financial losses associated with these attacks are also growing. An analysis by Help Net Security, which reviewed over 44 billion events and 800 million active users globally, highlighted a rapid rise in the complexity of new fraud tactics. This has spurred a greater focus on contextual detection strategies to preemptively thwart intrusions and mitigate potential losses.

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

The financial services sector is particularly vulnerable to online fraud, including account takeovers, which are often carried out using complex methods that combine manual and bot-driven tactics. In addition, social media fraud is increasingly prevalent, manifesting through fake registrations and fake installs, which are challenging to detect due to high volumes. The gaps in fraud detection and prevention can lead to significant financial and reputational damages, such as eroded customer trust, increased operational expenses, and losses in revenue and assets for both individuals and organizations. The rising complexity and prevalence of fraud underscore the demand for advanced fraud detection and prevention solutions that offer a comprehensive understanding of user behavior patterns. Such solutions provide a 360-degree view of data, enabling businesses to counter fraud effectively amid growing internet usage and data proliferation.

Fraudsters often vary their tactics, combining new and traditional methods to evade detection. They also avoid repeating intrusion processes, making it difficult to detect patterns. Consequently, advanced fraud detection solutions need to monitor data in real time while analyzing historical data to recognize attack patterns. For example, DataVisor’s Unsupervised Machine Learning (UML) Engine can identify clusters of malicious users sharing similar attributes. Traditional fraud detection, which relies on rule-based and supervised machine learning, continually updates models but often falls short in detecting sophisticated fraud tactics. As a result, the adoption of updated fraud detection and prevention solutions leveraging the latest technologies is essential to mitigate financial and reputational risks.

The effectiveness of fraud detection and prevention largely depends on the ability to identify threat patterns and develop suitable protective solutions to guard against repeated attacks. While business intelligence (BI) tools have been traditionally used to summarize large data volumes each quarter, conventional analytics lack the depth to predict possible outcomes at a granular level. Thus, advanced analytics tools—such as predictive analytics, data mining, big data analytics, and machine learning—are increasingly preferred for analyzing vast data volumes and identifying patterns that reveal trends across industries globally and regionally. These tools employ mathematical models and machine learning techniques, like deep learning, to recognize patterns, draw correlations, and categorize data sets. By arranging historical data into identifiable patterns, enterprises can anticipate and counteract foreseeable threats using fraud detection and prevention solutions.

Vertical Insights

The Banking, Financial Services, and Insurance (BFSI) segment accounted for over 28% of the market revenue share in 2022. The sector’s rapid digitization and electronic processing of operations have made it an attractive target for cybercriminals. Additionally, the rising popularity of digital products, such as stockbroking, insurance, and mutual funds, across various touchpoints requires companies to adopt preventive measures to monitor and manage fraud activities. Furthermore, the increase in cases of identity theft and card fraud globally is driving the adoption of authentication solutions within this segment.

The retail and e-commerce segment is projected to register the fastest CAGR of over 19% throughout the forecast period. Players in the retail and e-commerce industry utilize digital platforms and electronic devices to enhance the customer experience. However, using such solutions also heightens the risk of payment fraud and other digital fraud types. Consequently, to safeguard customer information and reinforce security infrastructure, demand for authentication and fraud prevention solutions is expected to grow in this segment over the coming years.

Order a free sample PDF of the Fraud Detection and Prevention Market Intelligence Study, published by Grand View Research.