Will reach $9.3 billion by 2022 driven by IoT and 3-D secure
Spend on online fraud detection and prevention (FDP) solutions is set to rise to $9.3 billion by 2022, an increase of 22% over this year’s anticipated spend, according to Juniper Research, as the Internet of Things (IoT) increases threats.
The research found that perceptions of high software costs alongside relatively low awareness of effective solutions in the e-commerce space were slowing service uptake. Nevertheless, it predicted that several factors would prove instrumental in driving the market forward.
Juniper’s new research found that the growing threat of insecure IoT devices would be key in driving FDP spend. It cited the evolution of IoT botnets from Distributed Denial-of-Service weapons aimed at fraud automation tools as influencing this trend, owing to a requirement for better customer verification tools.
Meanwhile, Juniper predicted the launch of 3-D Secure (3DS) 2.0 would have a similar impact. It claimed 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.
Finally, it cited the upcoming revised payment services directive (PSD2) 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,” noted research author Steffen Sorrell. “This will drive banks and service providers to greater emphasis on protecting those APIs.”
Juniper predicted that emerging markets, such as Latin America, Indian Subcontinent and Africa and 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. The research noted that stronger regulation to protect consumers as well as better consumer education in safer online practices were key issues to address.