The digital payments arena is undergoing rapid change, owing to a combination of factors. Transaction volumes are increasing rapidly as convenience improves, along with the impact of regulatory moves toward a cashless society.
Additionally, the banking world is becoming more open -- where an API-driven marketplace has created ‘banking-as-a-service’ opportunities and allowed new providers to enter the market.
It is not surprising that as online financial services offerings adoption and eCommerce transactions grow across the globe, so do the number of potentially fraudulent activities.
Online Fraud Prevention Market Development
According to the latest worldwide market study by Juniper Research, annual online payment fraud losses from eCommerce, airline ticketing, money transfer and banking services will reach $48 billion by 2023 -- that's up from the $22 billion in losses projected for 2018.
The new research by Juniper analysts uncovered that a critical driver behind these losses will be the continued high level of data breaches resulting in the theft of sensitive personal information.
Juniper claimed that fraudsters are using information gleaned from these data breaches to move away from pure identity theft. Instead, they're using fragments of real data to create new, synthetic identities.
With the global rise in instant payment schemes and a focus on transactional rather than behavioral risk, Juniper forecasts that money transfer would be particularly vulnerable, with fraud losses increasing by over 20 percent per annum to $10 billion by 2023.
"Synthetic identity is currently the low-hanging fruit because, even though it takes time for fraudsters to establish, many of their targets are not set up to detect the behavioral giveaways that indicate this type of fraud," said Steffen Sorrell, principal analyst at Juniper Research. "Fraud management providers have solutions on the market to combat this, but the industry as a whole is playing catch-up."
Meanwhile, Juniper predicted that techniques practiced by the Magecart and Fin7 groups would become more common as fraudsters seek to create products from their knowledge. Here, the groups used a combination of malware and cross-channel approaches for criminal gain.
Outlook for Fraud Prevention Market Growth
The research findings noted, as a result, more complex fraud would likely become more common as the ‘fraud-as-a-service’ economy continues to emerge.
Juniper recommends a holistic approach to fraud prevention. They believe that the procurement of omnichannel fraud prevention services, and a strategy to assess and mitigate risk from a cybersecurity perspective, will be critical for effective fraud prevention in the near to medium-term.
Additionally, the banking world is becoming more open -- where an API-driven marketplace has created ‘banking-as-a-service’ opportunities and allowed new providers to enter the market.
It is not surprising that as online financial services offerings adoption and eCommerce transactions grow across the globe, so do the number of potentially fraudulent activities.
Online Fraud Prevention Market Development
According to the latest worldwide market study by Juniper Research, annual online payment fraud losses from eCommerce, airline ticketing, money transfer and banking services will reach $48 billion by 2023 -- that's up from the $22 billion in losses projected for 2018.
The new research by Juniper analysts uncovered that a critical driver behind these losses will be the continued high level of data breaches resulting in the theft of sensitive personal information.
Juniper claimed that fraudsters are using information gleaned from these data breaches to move away from pure identity theft. Instead, they're using fragments of real data to create new, synthetic identities.
With the global rise in instant payment schemes and a focus on transactional rather than behavioral risk, Juniper forecasts that money transfer would be particularly vulnerable, with fraud losses increasing by over 20 percent per annum to $10 billion by 2023.
"Synthetic identity is currently the low-hanging fruit because, even though it takes time for fraudsters to establish, many of their targets are not set up to detect the behavioral giveaways that indicate this type of fraud," said Steffen Sorrell, principal analyst at Juniper Research. "Fraud management providers have solutions on the market to combat this, but the industry as a whole is playing catch-up."
Meanwhile, Juniper predicted that techniques practiced by the Magecart and Fin7 groups would become more common as fraudsters seek to create products from their knowledge. Here, the groups used a combination of malware and cross-channel approaches for criminal gain.
Outlook for Fraud Prevention Market Growth
The research findings noted, as a result, more complex fraud would likely become more common as the ‘fraud-as-a-service’ economy continues to emerge.
Juniper recommends a holistic approach to fraud prevention. They believe that the procurement of omnichannel fraud prevention services, and a strategy to assess and mitigate risk from a cybersecurity perspective, will be critical for effective fraud prevention in the near to medium-term.