A new study from Juniper Research (www.juniperresearch.com) finds that spending on online FDP (fraud detection and prevention) solutions is set to rise to $9.3 billion by 2022, an increase of 22% over this year’s anticipated spend.
The research group finds that perceptions of high software costs alongside relatively low awareness of effective solutions in the eCommerce space were slowing service uptake. Nevertheless, Juniper predicts that several factors would prove instrumental in driving the market forward.
The growing threat of insecure IoT (Internet of Things) devices will be key in driving FDP spend, notes Juniper. The evolution of IoT botnets from DDoS (Distributed Denial-of-Service) weapons aimed at fraud automation tools will influence this trend, owing to a requirement for better customer verification tools.
Meanwhile, Juniper predicts the launch of 3DS 2.0 (3-D Secure 2.0) would have a similar impact. It says 3DS 2.0 would both reduce fraud and result in fewer basket abandonments, if merchants invested in authentication solutions as part of an FDP strategy.
Juniper cites the upcoming PSD2 (revised payment services directive) and the move to open banking APIs in Europe, North America and Asia as a further driver. “APIs expose a set of business logic rules, which by their nature are susceptible to abuse,” notes research author Steffen Sorrell. “This will drive banks and service providers to greater emphasis on protecting those APIs [application programming interfaces].”
Juniper predicts that emerging markets, such as Latin America, Indian Subcontinent and Africa & Middle East would become key targets for banking and payments fraud. Collectively, these regions will account for only 4% of global FDP spend in 2022.