Global Employee Fraud Detection Market Report and Forecast 2024-2032

Global Employee Fraud Detection Market Report and Forecast 2024-2032

The global employee fraud detection market size is expected to grow at a CAGR of 21.50% between 2024 and 2032.

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News and Developments in the Market 

In May 2023, Bottomline Technologies, a major financial technology provider and a company which provides expertise in state-of-the-art fraud detection, made an announcement that the company was acquired by Thoma Bravo, an organisation which invests in software technology. The aim of this acquisition is to spearhead to cooperation between Bottomline and its stakeholders and to accelerate its operational capabilities. 

In May 2023, Onfido, a renowned company which offers digital identification and authentication, took a decision to expand its real identity platform, which will increase the fraud detection accuracy by 54%. A real identity platform includes different products which offer innovation measures to counter fraud in an organisation. This might escalate the application of the platform in small, medium and large enterprises, thereby, leading to an augmentation of the employee fraud detection market.

In May 2023, Infosys Public Services, a subsidiary of Infosys Ltd ADR, unveiled Infosys LaborForce, an automated platform as a service (PaaS) which offers advanced fraud prevention and detection. LaborForce allows the employees of an organisation to make use of functions such as click-to-chat. This tool updates claim information on the back-end systems. 

In April 2023, IBM Corporation announced the launch of z16, a next-gen AI powered system which enables financial services firms to detect any type of transactional fraud. The on-chip AI interference capabilities of z16 allows the clients to monitor real-time transactions for targeted workloads such as credit cards, and medical transactions, among others. Moreover, the z-systems of IBM account for a share of more than 50% in the global transactions which is adding to the employee fraud detection market growth.  

In April 2023, Arkose Labs, a major developer of fraud detection tools, launched Arkose Detect, which is a transparent fraud detection tool. This tool enables advanced digitalised businesses to analyse and counter fraud attacks by providing deep insights about the online journey of a person in an organisation. 

Heightened Adoption of Fraud Detection Software and Services and Growing Concerns about Reputation Losses are Key Market Trends 

Employee fraud is a type of fraud which is committed against an organisation by its own employees. Employee fraud detection is defined as the set of activities and initiatives taken by an organisation to prevent frauds such as false pretences, payment frauds, procurement frauds, and personnel management frauds, among others. 

• The heightened adoption of employee fraud detection software and services across various industries such as IT and telecommunication, and travel and transport, among others is likely to be a crucial trend in the market. 

• The growing concerns pertaining to fraud and reputation losses is further escalating the demand for cloud-based fraud detection software in small, medium, and large enterprises. The heightened cases of card skimming, SMS phishing, and cyberstalking, among others across the BFSI industry are crucial employee fraud detection market trends.

• The increasing penetration of IoT and digital devices such as laptops, smartphones, and computers, among others is a major trend in the market increasing the chances of fraud being committed by employees. 

Increasing Automation and Technological Advancements are Key Opportunities for the Market 

Increasing Automation Across the Industrial Sector 

The increasing investments in automation across various industries, owing to the rising cases of financial frauds committed by the internal workforce are anticipated to increase encourage the growth opportunities for employee fraud detection software for quick and efficient detection. 

Heavy Investment in AI and Hybrid Cloud Technology

The increasing investments in artificial intelligence (AI) and hybrid cloud technology by major market players and software developing companies aimed towards bolstering analysis, enhancing reliability, and improving the detection speed are anticipated to offer lucrative opportunities to the global employee fraud detection market in the forecast period. 

Technological Advancements in Cloud-Based Fraud Detection Software

The technological advancements in cloud-based fraud detection software which includes the incorporation of advanced features are likely to improve the efficiency of detection. This will encourage product innovations and diffuse the awareness about these software types among both government and private sectors.

Lack of Skilled Workforce and Digitalisation in Under-Developed Areas to Pose Challenges for the Market 

Lack of Skilled Workforce 

Detection and analysis of frauds committed by employees requires high-end tools, sufficient training, skilled workforce, and excellent knowledge about the software. Hence, the escalating workload on the employees, budget constraints, lack of skilled staff, and increasing need to cope with the technological advancements of fraud detection equipment and software to pose as challenges in the global employee fraud detection market. 

Lack of Digitalisation and Technological Penetration in the Under-Developed Areas

The lack of digital infrastructure and automation across the under-developed countries, owing to the slow economic growth and lack of awareness are anticipated to be major challenges for the market. 

Market Analysis 

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Based on solution, the market can be segmented into behavioural analytics, real-time transaction screening, and real-time reporting, among others. Based on the deployment, the employee fraud detection market can be bifurcated into on-premise and cloud. On the basis of application, the market can be segmented into vendor fraud, data theft, payroll fraud, accounting fraud, asset misappropriation, and bribery and corruption. 

According to end use, the market can be segmented into IT and telecommunication, retail and consumer packed food, BFSI, health and life sciences, media and entertainment, construction and real estate, travel and transportation, and energy and utilities, among others. The regional markets for the employee fraud detection can be divided into North America, Europe, the Asia Pacific, Latin America, the Middle East and Africa. 

The comprehensive EMR report provides an in-depth assessment of the market based on the Porter's five forces model along with giving a SWOT analysis. The report gives a detailed analysis of the following key players in the global database management system (DBMS) market, covering their competitive landscape and latest developments like mergers, acquisitions, investments and expansion plans. 

• IBM Corporation

• NICE Ltd. 

• ACI Worldwide, Inc.

• Fiserv, Inc.

• Infosys Limited

• Securonix, Inc.

• Others

Cloud Deployment to Occupy a Leading Share in the Employee Fraud Detection Market

Cloud-based fraud detection software are ideal for an enterprise as it provides proper protection from various kinds of frauds such as financial, assets and information, and receipt, among others. This factor is driving the segment’s growth. Cloud-based fraud detection software can efficiently record and collect data related to employee identity and previous records. Hence, the growth of this segment is likely to augment the global employee fraud detection market. 

In addition to this, this cloud software provides proper management in the internal infrastructure of an enterprise by managing servers, expanding storage base, thus, improving the levels of detection. Some notable advantages of cloud-based software for employment fraud detection include high speed of deployment, automatic software updates, bolstered efficiency, significant cost reductions, higher scalability, and back-up and restoration of data, among others. Therefore, this segment is anticipated to witness a high deployment in small, medium and large enterprises.

Banking, Financial Services, and Insurance Sector Holds a Substantial Share of the Market by End Use

The banking, financial services, and insurance sector accounts for a significant share in the global employee fraud detection market, owing to the increasing cases of financial fraud. In addition, the increasing magnitude of banking transactions are expected to further boost the need for fraud detection software. Meanwhile, the AI transformation in banks is leading to sophistication of cloud-based anti-fraud software and equipment which is providing impetus to the employee fraud detection market. 

Moreover, there are government regulations encouraging the anti-fraud modules such as know your customer (KYC), as well as anti-money laundering, and various types of counter-terrorist financing, among others. These are anticipated to boost the incorporation of employee fraud detection tools and services in private and government banks.

North America and Asia Pacific are Significant Regions for the Market

The global employee fraud detection market in the North America region is being driven by favourable government policies across the United States and Canada leading to stringent privacy and anti-fraud laws. In addition to this, the advanced digital infrastructure in the region, coupled with the strong foothold of major cloud-based fraud detection software developers, is likely to provide impetus to the market in the forecast period. 

Moreover, the increasing prevalence of terror financing activities, cyberstalking, and money laundering, among others, owing to the greater number of corporate workforce present in the region is anticipated to bolster the market growth in the coming years.

Meanwhile, the Asia Pacific region is likely to witness a steady growth in the forecast period owing to the heightened utilisation of employee fraud detection services across industries such as media and entertainment, healthcare, and travel and transportation, among others. High economic growth across the developing countries such as India and China are offering lucrative expansion opportunities to the employee fraud detection market. 

Over the forecast period, the anticipated increase in e-commerce transactions owing to the growing trend of online shopping is likely to propel the risk of frauds and cheating. Furthermore, the rising development of software start-ups, growing expansion of the major market players, and favourable policies of the government are some of the crucial driving factors of the market in the Asia Pacific.

In Europe, the increasing funding aimed towards economic crimes across emerging economies such as Spain and Argentina are escalating the development of cloud-based fraud detection services which is anticipated to bolster the employee fraud detection market in the region. According to a report by the European Financial and Economic Crime Centre (EFECC), Europe has witnessed a significant escalation in the cases of money laundering, corruption, counterfeiting, and tax and loan frauds since 2020. The increasing expansion of terrorism through fraudulent financial practices is further leading to a heightened demand for employee fraud detection solutions. 

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Competitive Landscape of Employee Fraud Detection Market

IBM Corporation or International Business Machines Corporation was founded in 1911 and is headquartered in New York, United States. The company comprises of engineers and software developers who provide consultations and offers network services. As of 2021, the number of employees working in IBM Corporation are around 2,82,100. 

NICE Ltd. is one of the leading providers of cloud and on-premise software solutions headquartered in Ra’anana, Israel. As of 2021, the total number of employees in the company stretch up to 6,383. Moreover, NICE Ltd. provides expertise in IT, Artificial intelligence, and various other high-tech domains. 

ACI Worldwide, Inc. is a leading developer, marketer, and supporter of software products, with headquarters in Florida, United States. It offers expertise on software and tech services. The company also provides innovative transaction solutions related to credit cards, smart cards, and home banking services, among others.  

Fiserv, Inc. is a global company specialising in financial services technology and payments, with dedicated offerings for point of sale, global commerce, banking, billing, payments, and merchant acquiring. Its focus is on implementing new technologies to transform and elevate the ways that companies engage with their respective customers, for long-term success. Founded in 1984, it was created by the merger of First Data Processing and Sunshine State Systems. 

Infosys Limited is a leader in IT services, consulting, and digital transformations worldwide, offing next generation technologies. An Indian multinational, the company was established in 1981 and currently has 13 subsidiaries globally, catering to clients across 50 countries. It offers digital core capability building, digital operational models, navigation of new technologies, and empowered talent transformations. 

Securonix, Inc. is a specialised company focussing on security analytics on massive scales, based on the cloud. It collects data, identifies potential threats, and enables proactive resolutions. It offers a next-generation platform for security analytics and operations management that is designed to protect big data against complex cyber security threats. 

Key Highlights of the Report