PHISHING SIMULATOR MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2023 - 2030)

The Global Phishing Simulator Market size was valued at US$ 93.3 million in 2023 and is expected to reach US$ 149.8 million by 2030, grow at a compound annual growth rate (CAGR) of 7% from 2023 to 2030. Phishing simulator is used to simulate phishing attacks in order to train employees to recognize malicious emails. It helps organizations test and strengthen their cyber defenses by running simulated phishing attacks. The key drivers of the market include the increasing phishing attacks, growing cybersecurity awareness, need to protect sensitive data, and compliance requirements.

The Phishing Simulator Market is segmented by deployment mode, end user, organization size, features, and region. By deployment mode, the market is segmented into cloud-based and on-premise. The cloud-based segment is expected to grow at a higher CAGR during the forecast period owing to the low cost and flexibility offered by cloud-based solutions.

Phishing Simulator Market Regional Insights

• North America is expected to be the largest market for Phishing Simulator Market during the forecast period, accounting for over 38% of the market share in 2022. The growth of the market in North America is attributed to the early adoption of cybersecurity solutions, presence of key players, and stringent regulations regarding phishing attacks.
• The Europe market is expected to be the second-largest market for Phishing Simulator Market, accounting for over 28% of the market share in 2022. The growth of the market in Europe is attributed to the increasing penetration of phishing simulator solutions across SMBs and large enterprises.
• The Asia Pacific market is expected to be the fastest-growing market for Phishing Simulator Market, with a CAGR of 8.5% during the forecast period. The growth of the market in Asia Pacific is attributed to the increasing awareness regarding phishing attacks and need for security solutions.

Figure 1. Global Phishing Simulator Market Share (%), by Region, 2023

Phishing Simulator Market Drivers:

Increasing Sophistication of Phishing Attacks: The phishing attacks landscape has evolved rapidly over the past few years. The phishing campaigns have become more targeted, persistent, and harder to detect. Hackers are using advanced techniques such as spear phishing, whaling, and business email compromise scams that are highly customized and evade traditional security defenses. Moreover, the COVID-19 pandemic has led to a further surge in phishing campaigns exploiting the remote working and dispersed workforce. These sophisticated phishing attacks are causing huge financial and reputational losses for enterprises. This is compelling organizations to adopt phishing simulation solutions that empower employees to identify and respond to the latest phishing techniques.

Stringent Regulatory and Compliance Requirements: With the increasing frequency and impact of cyberattacks, governance regulations around cybersecurity awareness training have become more stringent. Regulations such as HIPAA, PCI DSS, GLBA, SOX, GDPR mandate periodic security awareness training, including phishing simulations for employees. Financial institutions like banks need to comply with anti-money laundering (AML) and KYC norms that require robust mechanisms to prevent frauds, including phishing. Adherence to compliance standards is a major factor driving the adoption of phishing simulators across enterprises.

Increasing Digitalization and Remote Working Trends: Rapid digital transformation has dramatically increased the attack surface for organizations. Trends like BYOD, cloud migrations, and remote working have widened exposure to phishing risks. Remote workers are more susceptible to phishing attacks due to lack of security systems compared to office networks. According to a survey, 35% employees admitted to clicking on phishing emails while working from home. As the remote working trend continues post-pandemic, organizations are deploying phishing simulators to train a wider employee base on phishing identification.

Growing Cybersecurity Awareness: The growing number and impact of cyber incidents has led to an increase in cybersecurity awareness among businesses and individuals. According to various industry reports, around 80% organizations view cybersecurity training for employees as a high priority. There is greater understanding that technology alone cannot tackle phishing and humanfirewalls play a critical role. By providing phishing simulations and response training, organizations aim to develop a cyber smart culture and resilient workforce against evolving threats. The rising awareness is propelling the phishing simulator market.

Phishing Simulator Market Opportunities:

Integration With New Education Techniques: The phishing simulator vendors have an opportunity to enhance their offerings by integrating new-age learning methods like gamification, simulations, and microlearning. Instead of just generic simulations, incorporating interactive and customized story-based phishing simulations can make training more engaging and contextual for employees. Gamifying the phishing tests by providing real-time feedback, leaderboard competitions, badges and rewards can boost employee participation. Such education techniques can help improve phishing detection rates.

Integration with MFA and Other Security Tools: Phishing simulation providers can expand their capabilities by integrating with other security solutions like MFA, identity management, EDR, and SIEM offered by technology partners. This can help organizations take automated actions to isolate compromised users and devices detected via phishing tests. Integrations can also enable seamless data sharing, which can aid in identifying broader attack patterns. Joint solutions combining MFA, phishing prevention and phishing simulation can offer comprehensive protection against phishing.

Cloud-based Delivery Models: The phishing simulation market presents ample opportunities for cloud-based delivery models. SaaS-based solutions allow easy scalability to support a wider employee base. Cloud solutions enable organizations to instantly roll out phishing campaigns and training on the go. It also reduces hardware investments and allows easy access from anywhere. Companies with hybrid work models can especially benefit from cloud-based phishing simulators. Vendors can attract SMBs by offering cloud-based phishing simulators with customized options.

Intelligence Sharing and Benchmarking: Phishing simulator vendors can provide additional value to clients by enabling threat intelligence sharing and benchmarking capabilities. By collectively analyzing simulation data from different organizations, broader phishing patterns, new attacker tactics and best practices can be identified. Customers can benefit by comparing their phishing resilience benchmarks with companies in their industry or location. Collaborative intelligence will enhance the phishing simulation offerings.

Phishing Simulator Market Trends:

Use of Automation and AI: The phishing simulation vendors are increasingly incorporating automation and AI capabilities in their solutions. Automated customization of phishing email templates and content helps create more realistic and contextual simulations aligned to emerging threats. AI is enabling faster campaign creation, attack pattern analysis, and response recommendations based on employees' behavior data. Chatbots are being used to engage employees for security training. AI capabilities provide scalability and reduce resource requirements for phishing simulations.

Increasing Adoption of Security Orchestration: Security orchestration platforms are emerging which allow phishing simulations to be integrated along with other security technologies like endpoint detection, identity management, and threat intelligence feeds. This enables coordinated prevention, detection and automated response across attack vectors. Organizations benefit from end-to-end visibility of phishing risks via a single orchestrated console. Response playbooks allow one-click actions like isolating compromised users during phishing simulations. This rising trend improves ROI from phishing simulation tools.

Emergence of Managed Security Services: Organizations are increasingly relying on managed security services providers (MSSPs) for their phishing simulation and training needs. MSSPs have the in-house expertise to handle simulation campaign creation, launches, analysis and training. This alleviates the need for additional in-house phishing experts. MSSPs can optimize simulations using threat intelligence from multiple clients. They can also provide ancillary services like security awareness education, dark web monitoring, cyber threat hunting etc. thus offering an integrated phishing defense.

Integrated End-user Security Education: Leading phishing simulation vendors provide integrated security awareness education covering company policies, password hygiene, social engineering red flags etc. along with the core simulations. E-learning modules with videos, quizzes, posters help employees absorb and retain best practices related to phishing. Nano-learning via periodic content snippets keeps security top of mind. Custom training is provided based on phishing response trends. This integrated education strengthens human firewalls against phishing.

Phishing Simulator Market Restraints:

• Lack of Expertise in Managing Simulations: While many organizations are seeking phishing simulation solutions, some are deterred by the lack of in-house skills to manage the campaigns and training. It requires expertise to create realistic scenarios mirroring latest attacker tactics, analyze response patterns, and provide contextual training. Lack of proper design and follow-up of phishing simulations dilutes their effectiveness. Organizations are hesitant to adopt phishing simulators due to resource constraints in managing simulations.
• Perceived Disruption to Employee Productivity: Frequent phishing simulation campaigns, if not designed properly, can interrupt employees and affect productivity. Too many tests or lack of coordination across departments to avoid simulation overlaps can annoy employees. Lack of awareness on the rationale behind simulations may make some employees perceive it as unnecessary harassment. Organizations are therefore cautious in adopting phishing tools to avoid workforce disruption, which can be a market restraint.
• Budgetary Constraints for Cybersecurity: While organizations are aware of phishing risks, they face budget constraints in allocating resources to new solutions. This is especially true of SMBs that have limited security budgets amidst competing priorities. Many organizations consider technology solutions like email security gateways as sufficient defense against phishing. The perceived high costs of phishing simulators and low awareness among management about their ROI leads to low adoption budgets. This hampers the phishing simulation market growth.

Recent Developments

New product launches

• In March 2022, KnowBe4 launched new Phishing Reply Tracking feature that enables organizations to track if their users reply to simulated phishing tests. This provides insights into risky behavior.
• In January 2021, Cofense launched next-generation Phishing Simulation platform to provide organizations with customized phishing templates aligned to latest cyber threats.
• In September 2020, Infosec Institute announced the launch of phishing simulator solution named PhishSIM to help organizations strengthen their human firewall against phishing.

Acquisition and partnerships

• In October 2022, KnowBe4 partnered with Cyble to provide organizations with dark web monitoring capabilities along with phishing simulations.
• In May 2022, Infosec acquired phishing simulation provider Aon Cyber Labs to expand its security awareness capabilities.
• In March 2021, Cofense acquired Cyberfish to enhance its phishing defense solution by integrating Cyberfish's phishing templates and responder tools.

Figure 2. Global Phishing Simulator Market Share (%), By Features, 2023

Top companies in Phishing Simulator Market

• Ironscales
• Cofense (PhishMe)
• Infosec Institute
• KnowBe4
• PhishLabs
• Wombat Security Technologies
• Barracuda Networks
• Mimecast
• Proofpoint
• CyberFish
• DataEndure
• FireEye
• Smooth Phish
• Votiro
• XM Cyber
• Lucidworks
• Digital Defense
• Getlabs
• Avanan
• Greathorn

Definition:

Phishing simulator market refers to the tools, platforms, and services used for simulating phishing attacks within an organization to train employees on how to detect and respond to actual phishing campaigns. It provides a safe environment for information security teams to send simulated phishing emails mimicking real-world phishing attacks and raise security awareness among employees.

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