Fraud Prevention Systems Market Intelligence

Fraud Prevention Systems Market Description

The market for retail fraud systems encompasses fraud at the application and transactional levels. The POS technologies such as EMV have helped to decrease losses caused due to transactional fraud, however, application fraud is still a rampant issue in the banking space. A number of players offer analytics-based financial fraud detection software, yet, only a few cater to the retail banking space. This is due to the limiting regulations enforced by the regional/national authorities, thus market maturity is closely tied to the banking landscape. The emerging economies still lag behind developed countries in terms of fraud technology adoption, however, they have the opportunity of leapfrogging into advanced fraud detection software across various enterprises.

The market for fraud prevention systems will be driven by factors such as a need for analytics in building prediction tools, device intelligence, geo-fraud, and syndicated fraud checklists. Despite the presence of many players in the fraud detection software space, the supplier base for retail banking is still low due to greater regulation and requirement of access to consortium data. The report also provides Porter’s five forces analysis across different factors, followed by a detailed overview of supplier profiles.

Beroe gathers intelligence through primary sources that include industry experts, researchers, and consultants, as well as current suppliers, producers and distributors. Secondary sources can include business journals, newsletters, magazines, market research data, company sources, and industry associations. Following data collation, analysis, and strategic review, the Final Research Report is published on Beroe LiVE.

Report Coverage

Market Trends
Technology & Innovation Trends
Global Supplier List and Capabilities
Mergers and Acquisitions

Fraud Prevention Systems Market Trend, Analysis & Forecast

Category Intelligence on Fraud Prevention Systems covers the following

Information relating to market, supply, cost, and pricing analysis
Hard to find data on cost and TCO models, supplier details, and performance benchmarks
Macroeconomic and regional trends impacting cost, supply, and other market dynamics
Category-specific negotiation and sourcing advice

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Executive Summary

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Market Analysis

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Supply Analysis

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Cost & Pricing Analysis

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Best Practices

Retail Banking Fraud - Market Overview

Retail banking fraud encompasses Application level fraud and transactional level fraud
Application fraud comprises fraud committed at the application stage across account opening, and secured and unsecured credit product applications whereas transactional fraud refers to that occurring during transactions such as account takeover and payments
While technologies in POS like EMV (chip, tokenization and encryption) have decreased transactional fraud losses, application fraud is still a major issue in the banking space

fraud-prevention-systems-market-size

Global Financial Fraud Trends

New-account fraud rose 70 percent in 2017,with account takrover fraud in the US growing three times over 2016,to reach a total loss of $55.1 billion
Identity theft is a major component of new-account fraud where good credentials are used as facilitators for committing application fraud E.g., Social security number breach accounted for 500,000 fraud victims in 2014 and is expected to rise to 710,000 by 2018
Identify Fraud number/victims reached 16.7 million in the US in 2017,an increase of 8 percentage over the previous year.ID fraud constitutes to 6.64 percent of consumers
Total value netted by fraudsters was estimated at $16.8 billion in the US
With regard to online fraud, CNP fraud accounted for 81 percent against POS fraud

Retail Banking Fraud Prevention Systems - Global Market Maturity

While there are many players offering analytics based financial fraud detection software, there are only few players catering to the retail banking space. This is a direct consequence of regional/national regulations. Hence, the maturity is closely tied with the banking landscape
While emerging economies still lag developed countries in terms of fraud technology adoption, they have the opportunity of leapfrogging into adopting advanced fraud detection software across the enterprise. (Its peers in the developed world face challenges integrating its legacy systems)

Supply Trends and Insights

Global/Regional Supplier

Reactive to predictive analytics: Advanced analytics techniques based on machine learning such as neural networks and self organizing maps are being used to identify fraud patterns and vulnerable customer applications. This in turn provide fraud scores for customer applications indicating proximity to a benchmark fraud characteristic
Big data: With the explosion in volume, variety and velocity of data, fraud prevention systems are gearing towards capabilities that enable digestion and monitoring of customer information across his/her entire lifecycle. E.g., looking at buying patterns to discern any unlikely/deviant purchase behavior in comparison with historic purchase behavior. These services are mostly provided as a bespoke managed service post license purchase
Device intelligence to digital footprint: Apart from device intelligence services encompassing channels such as mobile, e-mail, IP, etc., there is also a need to look at synthetic identities where there are sudden spikes in credit requests from a seemingly authenticated source

Vertical/Local Supplier

Vertical focused solutions:While there are few suppliers focussed on the retail banking vertical due to the need for dynamic regulatory systems, there are information sharing agreements through databases at the national level that contain cross-member (financial institutions and insurance) application data that help in screening for fraud at the application stage E.g., CIFAS, Hunter, SIRA in the UK, IFI in the Netherlands,FPN in Germany
These fraud databases are also sometimes combined with data from other industries such as telecom data E.g., Fraud prevention pool in Germany

Engagement Trends

Most adopted engagement model globally: Single vendor with a bespoke service
Licensing metrics: The most widely used metric is volume of applications/number of submissions into the system. Some suppliers also use ‘pay per click’ where in the initial submission and any updates or re-checks are counted separately
Additional services such as integration to external consortium data through adaptors or APIs are charged as a separate fee. E.g., FICO Falcon Fraud Manager integrating with Hunter database

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