AI-powered financial fraud detection spending will exceed $10bn by 2027 as firms try to cope with increasingly complex attacks, according to a report from Juniper Research.
This spend is set to rise from $6.5bn in 2022, meaning the segment will grow by 57%.
The report attributes this rise to merchants and issuers using AI to better combat sophisticated fraudulent attacks.
AI-powered fraud detection and prevention platforms leverage the technology to monitor transactions and identify fraudulent patterns, reducing fraud risks by blocking transactions in real-time.
Juniper Research’s report predicts that cost savings from AI deployment will be critical to taking system use beyond regulatory compliance. It will provide return on investment, with improving models and greater data access creating a virtuous circle of improvement.
It forecasts a 285% growth, with cost savings reaching $10.4bn globally in 2027, from $2.7bn in 2022.
Research author Nick Maynard said, “By leveraging AI, businesses can shift their fraud management resource to where it matters, investigating key issues, rather than dealing with endless false positives, boosting efficiency.”
These findings come from, ‘AI in Financial Fraud Detection: Key Trends, Competitor Leaderboard & Market Forecasts 2022-2027.’
The report recommends vendors to focus on access to transaction and trends data, as gaining the best level of network intelligence will allow businesses to benefit from fraud information from beyond just their own transactions.
Another recent report from Juniper Research highlighted the rise of fraud. It found that the Total revenue generated by travel and expense (T&E) management is expected to reach $16bn by 2027, rising from $8.7bn in 2022.
However, it also found that the risk of expense fraud will increase as hybrid working grows. It stated that remote working provides the ideal environment for employees to submit fraudulent reports.
Its research recommended vendors to seek anti-fraud services.
Source : FinTech Global