Any illegal act involving the obtaining of something of value through willful misrepresentation is called fraud. Fraud detection and prevention systems (FDP) are those software applications which are used to provide analytical solutions for detection and prevention of fraud in future. Authentication solutions and fraud analytical solutions form the core of FDP systems. FDP systems analyze data from wide range of data sources for possible inaccuracies. It analyzes patterns, anomalies and trends in the transactions. It identifies the outliers and reports the same in case of doubtful situations and transactions. FDP prevents unauthorized access preventing fraud incidents. It also verifies user identity and maintains data integrity. Recently, with advent of solutions such as cloud services, internet enabled solutions, and increased preference for digital data modes, vulnerability of enterprises towards fraud has increased significantly. To prevent such occurrences companies are switching to fraud detection software, thus, fuelling the demand for FDP. Rising revenue losses by enterprises due to frauds has further magnified the need for preventive solutions, resulting in increased adoption of FDP solutions, thereby contributing t the marker growth.
Rise in the enterprise data and its complexity, industry specific requirements, and increase in cost of fraud, are some of the factors acting as drivers for FDP market. Apart from these, technological advancements and regulatory changes will also drive the demand for FDP. However, high cost involvement, low level of awareness, and unavailability of pre-deployment measures are expected to hinder the growth of the FDP market. The limited capability of legacy system has also led to the enterprises switching to FDP. The technological advancements and new FDP solutions will lead to increase in demand. The upcoming new visualization tools and applications along with customer analytics and predictive analytics will further increase the demand for FDP. Growing size of enterprise data and globalization has made it difficult to analyze real time data by legacy systems. This has led the companies to adopt FDP, subsequently pushing up the demand.
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With high concentration of business enterprises, North America is expected to hold major share for FDP market in upcoming years, followed closely by Europe which has also shown similar trends. Asia-pacific is expected to provide highest growth rate due to globalization and new investment regulations fuelling the rise in number of small and medium scale enterprises (SME’s). India and Japan, with fast rise of SMEs and industrial sector growth, are expected to transform into lucrative markets with high growth potential. Latin America will also provide high growth rate because of increased investment opportunities. Fraud detection and prevention market is segmented as authentication and fraud analytics.
The FDP solutions have wide applications across insurance, public sector/government sector, telecommunications and, banking and financial services. There is high demand for FDP in end-use sectors, such as retail, banking and financial services, healthcare, transportation, manufacturing, and professional services, among others; with banking and financial services holding a major market share for FDP. Insurance, telecommunication and retail sector is expected to provide highest revenue contribution in upcoming years with increased adoption of FDP. Rise in online transactions, insurance claim frauds and card related frauds are increasing the use of FDP in retail, insurance and banking and financial services sectors.
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Some of the prominent players in this market include Visa Inc., ACI Worldwide, Inc., SAS Institute Inc., BAE Systems Detica, SAP, Bosch Software Innovations Gmbh, Oracle, Computer Sciences Corporation, Mastercard, EMC Corporation, IBM, FICO (Fair Isaac Corporation), Fiserv, Inc., and FIS Company among others. Some of the key innovators functioning in this market are ValidSoft UK Ltd., Alaric Systems Ltd., Threatmetrix, Cvidya, Lavastorm Analytics and Easy Solutions Inc., among others.