Global banking fraud to hit USD $48bn by 2029, says study

A recent study by Juniper Research has revealed that the value of fraudulent banking and money transfer transactions is expected to reach USD $48 billion globally by 2029. The report, titled "Global Fraud Detection & Prevention in Banking Market 2024-2029," forecasts a significant 153% increase from the current figure of USD $19 billion in 2024.

According to the research, the increasing sophistication of fraudsters, particularly through the use of artificial intelligence (AI), is causing substantial pressure on banks. However, the study also notes that banks are leveraging AI technology to combat this growing threat effectively. The challenge lies in fraudsters' exploitation of AI, which necessitates a more robust and adaptive response from financial institutions.

Juniper Research's Competitor Leaderboard ranks the top 15 vendors in the fraud detection and prevention space by criteria such as the breadth of their solutions, geographical reach, and future business prospects. The leading five companies for 2024 identified are LexisNexis Risk Solutions, Mastercard, Visa, ACI Worldwide, and Thales. These companies excelled due to their level of innovation and the breadth of their offerings.

Juniper Research emphasised the need for vendors to evolve their strategies to stay ahead of fraudsters. "Instant payments mean greater speed; lessening the time window banks have to intervene, and limiting the effectiveness of traditional fraud detection tools," said report author Cara Malone. "Fraud detection & prevention vendors need to implement AI to enable a shift to real-time risk scoring and prevention.”

The new research and data suite from Juniper Research provides a comprehensive assessment of fraud detection and prevention in banking. It includes five-year forecasts and critical analysis for over 60 countries, and offers insights into future market opportunities. The suite comprises more than 24,000 market statistics and includes a Competitor Leaderboard, making it a significant resource for stakeholders in the financial sector.

The report underlines the increasing urgency for real-time solutions to tackle scams effectively, such as Authorised Push Payments (APP) fraud, where fraudsters deceive individuals into authorising payments to accounts under their control. The move towards instant payments requires fraud detection and prevention solutions to minimize the intervention time, thus posing a substantial challenge to conventional methods.

AI-driven real-time risk scoring and preventive measures are seen as pivotal to mitigating the impact of transactional fraud in the coming years. The research underscores the necessity for continuous innovation and the development of faster solutions to counter the evolving tactics used by fraudsters.

As the financial landscape becomes more complex with the advent of new technologies and payment systems, the efforts to detect and prevent fraud must also advance. The findings from Juniper Research highlight the significant steps that leading vendors are taking while stressing the need for ongoing development and adaptation in the face of rising fraudulent activities.