The global AML Market size is projected to grow from USD 3.1 billion in 2023 to USD 6.8 billion by 2028 at a Compound Annual Growth Rate (CAGR) of 17.0% during the forecast period. The expansion of the AML market is being propelled by increased monetary penalties, regulatory sanctions, and reputational loss due to non-compliance with AML regulations.
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Based on deployment mode, the cloud segment is expected to grow at a higher CAGR during the forecasted period.
The cloud deployment category is anticipated to experience a higher Compound Annual Growth Rate (CAGR) due to the swift adoption of cloud solutions by Small and Medium Enterprises (SMEs), owing to their cost-effectiveness. Cloud deployment involves hosting applications and software on external servers and granting access via the Internet. The approach is gaining momentum within the AML market, especially among SMEs, as it allows them to concentrate on core competencies instead of investing limited capital in security infrastructure. By opting for cloud-based AML solutions, organizations can avoid expenses related to hardware, software, storage, and technical personnel. Such solutions, including Software-as-a-Service (SaaS) based AML offerings, provide security solutions and services for business applications. Additionally, cloud-based AML systems are user-friendly when it comes to maintenance and upgrades. Collectively, these factors are propelling the expansion of cloud deployment within the AML market.
By organization size, the large enterprise segment is expected to hold a larger market size during the forecast period.
Large enterprises encompass those with over 1,000 employees, and they stand as frontrunners in embracing AML solutions. It is driven by their utilization of numerous business applications vulnerable to fraudulent attacks. Due to their substantial size and diverse IT infrastructures, these enterprises face the intricate challenge of efficiently safeguarding their application security. In contrast to Small and Medium Enterprises (SMEs), larger counterparts possess ample technical prowess, greater financial capabilities, and heightened exposure to fraud incidents, contributing to heightened awareness levels. Cyber attackers target enterprise networks and systems to pursue financial gains or unauthorized access to data. These dynamics prompt large enterprises to adopt AML solutions at an early juncture, recognizing the importance of fortified security measures.
Digital payment and online banking services have grown phenomenally over the past decade. These platforms have fundamentally changed how financial transactions are carried out, driven by technical improvements and shifting customer preferences. The financial environment has changed because of the accessibility and convenience provided by digital payment methods and online banking. Such factors form a powerful force behind the growth and advancement of the AML market.
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What is AML?
Anti-money laundering can be referred to monitoring and preventing any illegal activities that support money laundering and terrorist financing by financial institutes such as banks, insurance, or gaming & gambling enterprises. These institutes avoid fraudulent and illegal activities around the financial systems by following policies and regulations during KYC/CDD, transaction screening, monitoring, and compliance.
Unique Features in the AML Market:
The fight against financial crimes has benefited greatly from a number of distinctive characteristics that the anti-money laundering (AML) market has to offer. To analyse large datasets, find suspicious trends, and identify potential money laundering operations, advanced analytics and artificial intelligence (AI) integration are foremost among them. A real-time mechanism called transaction monitoring keeps track of financial transactions and quickly flags any unusual or suspicious activity for additional investigation.
Financial institutions may confirm customer identities and evaluate associated risks thanks to AML solutions’ strong Customer Due Diligence (CDD). Modern tools like biometric authentication and digital identity verification might be used in this. Sanctions Screening elements in AML systems also make sure that customer identities and transactions adhere to global sanctions lists and watchlists.
Utilising efficient case management technologies, compliance teams can more easily investigate suspected activity while maintaining audit trails for regulatory reporting. Another significant feature is automated reporting, which makes it easier to prepare and submit required reports to regulatory agencies. Quick adaptability is made possible by real-time updates on changing compliance requirements provided by integration with regulatory data sources.
Prioritising higher-risk clients and transactions enables organisations to more effectively devote compliance resources. The detection of suspicious activity connected to certain geographic places or regions is made easier with the help of geospatial analysis. Through the use of behavioural analytics, it is possible to spot deviations from typical consumer behaviour and reveal odd financial activity that could be signs of attempted money laundering.
Major Highlights of the AML Market:
In order to analyse large datasets for suspicious patterns and behaviours, advanced analytics and artificial intelligence (AI) have become essential. Another crucial aspect is transaction monitoring, which guarantees real-time tracking of financial transactions and makes it possible to quickly identify and look into odd or suspicious activity.
AML systems also include strong Customer Due Diligence (CDD) procedures that incorporate cutting-edge methods like biometric authentication and digital identity verification to confirm customer identities and evaluate related risks. Sanctions screening is a crucial part of preventing interactions with sanctioned entities by assuring compliance with global sanctions lists and watchlists.
Utilising effective case management technologies, compliance teams may easily track cases, establish audit trails, and satisfy regulatory reporting obligations. Automated reporting makes it easier to prepare and submit required reports to regulatory agencies, which improves compliance.
Financial institutions can quickly adjust thanks to real-time updates on changing compliance laws provided by integration with Regulatory Data sources. Organisations can allocate compliance resources effectively by utilising a risk-based strategy and concentrating on higher-risk clients and transactions. By detecting suspicious actions connected to specific geographic places and finding deviations from typical consumer behaviour, geospatial analysis and behavioural analytics improve risk assessment.
Cross-channel monitoring offers a thorough view of consumer behaviour across all channels, including mobile apps and internet banking. Automatic rule changes to preserve conformity with changing standards are ensured by machine-readable regulations. Regardless of size or scale, scalability is essential for meeting the different needs of financial institutions.
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Competitive overview:
The AML market is led by some of the globally established players, such as LexisNexis (US), Oracle (US), FIS (US), Fiserv (US), Jumio (US), NICE Actimize (US), SAS Institute (US), GB Group (UK), FICO (US), ACI Worldwide (US), Experian (Ireland). Partnerships, agreements, collaborations, product developments, and acquisitions, are some of the various growth strategies by these players to increase their market presence.
NICE Actimize is one of the key providers of financial crime, risk, and compliance solutions for regional and global financial institutions and government regulators. More than 100 of the largest global financial institutions and regulatory authorities utilise NICE Actimize solutions to improve their understanding of real-time consumer and staff behaviour, transactions, and activities. With the aid of NICE Actimize AML solutions, organisations have decreased and stopped financial crime activities, minimised money laundering risk, boosted investigator efficiency, and improved regulatory compliance and supervision. The business protects financial institutions from financial crime and regulatory & reputational concerns by enabling them to detect and prevent fraud, manage regulatory compliance, and swiftly and correctly identify money laundering threats.
LexisNexis Risk Solutions is one of the leading providers of fraud detection, identity verification, AML software, and authentication solutions. The company is a member of the RELX Group, a global supplier of information and analytics to corporate and commercial clients in a variety of industries. It offers clients decision-making tools and solutions that integrate cutting-edge technology with public and sector-specific knowledge. LexisNexis Risk Solutions provides AML Insight, WorldCompliance data and an online search tool, compliance management, data management, and investigative solutions. By certifying consumers with greater security to minimise fraud and improve the customer experience, the company’s AML software solutions assist organisations in accelerating the onboarding process for new customers as well as KYC standards. With substantial international reach, LexisNexis provides services across the Americas, Asia Pacific, Europe, and the Middle East. It serves a variety of industries, including government, healthcare, and financial services.
FICO is one of the leading providers of financial services. FICO joined the AML industry in 2015 with its acquisition of TONBELLER, a cutting-edge provider of financial crime solutions headquarters in Germany. Applications, scores, and decision management software are the three business sectors through which the FICO operates. FICO provides an AML solution that aids banks and insurance firms in preventing money laundering and terrorist funding schemes, safeguarding their businesses from hazards of third-party bribery and corruption, and meeting their international tax reporting requirements. The company operates globally in more than 100 countries. It caters to various industries: retail, public sector, pharmaceuticals, telecommunications, travel & hospitality, education, manufacturing, technology, media & entertainment, and utilities. However, it majorly focuses on the banking, finance, insurance, and healthcare industries.
According to MnM’s approach to evaluating the market, most businesses use organic and inorganic growth tactics to hold onto their market share. In 2020–2022, transactions rose by 50–60%. Alliances, acquisitions, collaborations, and partnerships together are covered in these agreements. Organizations are anticipated to embrace organic growth strategies starting in 2022 to provide end consumers with AML solutions and services, which would assist businesses in boosting market revenue.
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