MarketsandMarkets™ has published new research forecasting significant expansion in the fraud detection and prevention space within banking, financial services and insurance.
The global Fraud Detection and Prevention (FDP) in BFSI market is expected to climb from $7.78bn in 2026 to $15.06bn by 2031, a compound annual growth rate of 14.1% across the forecast window. The research firm’s data also shows the market stood at $6.92bn in 2025, with figures tracked across the period from 2020 to 2031.
Several trends are shaping this growth trajectory. Solutions are set to remain the dominant offering, accounting for 80.2% of the market in 2026, while authentication tools are forecast to be the fastest-growing solution category at a 14.7% CAGR.
Smaller organisations are also emerging as a key growth driver, with SMEs projected to post the highest CAGR of the forecast period at 15.7%. Among fraud categories, identity fraud is expected to expand the fastest, and North America is tipped to hold the largest regional share in 2026.
The report attributes rising demand to the growth of digital banking and real-time payments, alongside wider use of digital identity checks and behavioural authentication to keep transactions secure.
It points to banks and insurers increasingly weaving behavioural biometrics and identity intelligence into their fraud platforms so that users are verified continuously rather than only at login, citing Mastercard’s AI-driven Scam Protect suite as an example of this identity-led approach.
Fraud analytics emerges as the largest solution segment in the study, reflecting growing pressure on banks, payment providers, lenders and insurers to assess high volumes of transactions in real time.
The report notes that firms are turning to artificial intelligence, machine learning and behavioural analytics to spot unusual transaction patterns, cut down on false alerts and catch complex fraud before losses occur, with the ongoing shift to instant payments adding further momentum.
On identity fraud specifically, the report links its rapid growth to the spread of digital banking, remote account opening and AI-driven impersonation methods such as deepfakes and synthetic identities. It states that criminals are exploiting stolen credentials and account takeover tactics to get past conventional authentication, pushing institutions to adopt stronger, continuous identity verification built on biometrics and AI-based risk scoring.
Supporting this point, the research cites TransUnion data showing suspected digital account takeover fraud rose by 37% between 2024 and 2025.
Insurance is flagged as the fastest-growing use case in the market, driven by a rise in fraudulent claims, identity theft and AI-assisted manipulation of documents and images. The shift toward digital policy sales and claims handling has widened the opportunities for fraud, according to the report, prompting insurers to deploy AI-based detection tools, behavioural analytics and automated claims checks to spot suspicious activity, speed up investigations and cut costs. The study references National Insurance Crime Bureau figures projecting a 49% rise in identity theft-linked insurance fraud during 2025.
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