Fraud Detection Software Developers in the US
Since the dawn of commerce, fraudsters have redirected, skimmed and faked transactions at the expense of merchants and customers. Especially since the 21st century and the dawn of e-commerce, fraud losses have spiked. While fraud detection software companies cannot eliminate financial fraud, their i...
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| Format: | Market Research |
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| Language: | eng |
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| Summary: | Since the dawn of commerce, fraudsters have redirected, skimmed and faked transactions at the expense of merchants and customers. Especially since the 21st century and the dawn of e-commerce, fraud losses have spiked. While fraud detection software companies cannot eliminate financial fraud, their intelligent systems sit behind payment terminals, considering all relevant data from a transaction before and after deciding to authorize it. Fraud detection software also reconsiders transactions at a broader level, alerting banks and governments to nation-level fraud, terrorist financing and other extreme crimes. Fraud detection software performed exceptionally well over the five years to 2023, with revenue rising at a CAGR of 12.9% to $11.8 billion, including anticipated growth of 6.7% in 2023.
Fraud software is universal in banking applications, with many financial institutions going far beyond government requirements. However, data and information breaches in recent years have encouraged large retailers, healthcare providers and resource extractors to expand cybersecurity initiatives. Cloud-based, per-transaction payment models have also opened up fraud software to small and micro-sized businesses making only a few daily transactions. Recently, fraud software developers have started to shift from predictive to real-time analytics models, mainly as instant financial transfers become popular in the United States, as they already are in other countries. Both real-time and predictive analytics tools will also become more sophisticated with the use of artificial intelligence. Still, developers should watch that their systems keep user's data private while avoiding bias towards the transactions of any particular group.
While fraud software revenue is expected to grow at a moderately slower CAGR of 6.6% to $16.2 billion over the five years to 2028, the slowing income will result from fraud prevention software's increasing barriers to entry. Profit is anticipated to rise somewhat as detection companies double down on extracting insights from their mountains of past transaction data. Meanwhile, growing price competition, as well as the ubiquity of services and relative saturation among large companies and core financial markets, will cut demand to more normal levels. Still, as long as cybercriminals exist, this software sector will receive big money to bring down real and perceived fraud toward zero. |
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