Global spend on AI-enabled financial fraud detection to hit US$10bn in 2027: Juniper

The global business spend on AI-enabled financial fraud detection and prevention strategy platforms will exceed US$10 billion globally in 2027; rising from just over $6.5 billion in 2022 according to a new Juniper Research report.

The study, AI in Financial Fraud Detection: Key Trends, Competitor Leaderboard & Market Forecasts 2022-2027 identified the ability of AI to recognise fraudulent payment trends at scale as being critical to provide improved fraud prevention.

Growing at 57 percent over the period, the report predicts that as fraudsters become more sophisticated in their attacks, merchants and issuers will become more adept at utilising highly advanced AI-enabled fraud detection methods to combat crime.

AI-enabled fraud detection and prevention market platforms use AI to monitor transactions and identify fraudulent transaction patterns; reducing fraud risks by blocking transactions in real-time.

The research analysis predicts cost savings from AI deployment will be critical to taking system use beyond regulatory compliance. Providing a genuine return on investment on fraud prevention services, with improving models and greater data access creating a virtuous circle of improvement.

It forecast growth of 285 percent, with cost savings reaching $10.4 billion globally in 2027, from $2.7 billion in 2022. 

Research author Nick Maynard said, “By leveraging AI, businesses can shift their fraud management resource to where it matters, investigating the key issues, rather than dealing with endless false positives, boosting efficiency.”

Additionally, the fraud detection report found that AI is increasingly standard within financial fraud prevention services; making differentiation a challenge.

The research recommends vendors 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; significantly improving fraud prevention.

The research recommends vendors make partnerships with third parties, such as credit bureaus and payment networks, to improve data coverage.