The size of the global anti-money laundering market is supposed to expand from USD 3.4 billion in 2023 to USD 8.11 billion by 2029, and it will also register a compound annual growth rate (CAGR) of 15.6% over the projection period.
Anti-money laundering (AML) refers to a solution that allows banks and other financial institutions to monitor customer behavior in the event of suspicious criminal financial activity through automated processes. Different types of AML solutions have been considered in the anti-money laundering market, such as transaction monitoring, currency transaction reporting, customer identity management, and compliance management. The increase in the volume of global transactions has resulted in the deployment of AML solutions in banks and other financial institutions.
Various banks, governments, and other regulatory institutions are educating the public about careful monitoring of transactions and due diligence of customers to prevent cases of financial crime, which is supposed to fuel the demand for these anti-money laundering solutions.
The emergence of small and medium-sized banks and financial institutions increases the demand for a comprehensive anti-money laundering solution, which will help them transparently monitor their transactions and avoid unnecessary surveillance costs and other functions. Therefore, solution providers are introducing them to meet the demand of this user segment.
Market Growth and Trends:
On-premises deployment mode is a traditional approach in which solutions are deployed and operated from customers' internal servers. Local solutions give organizations full control over platforms, applications, systems, and data, which can be processed and managed by your IT staff. Local deployment mode adoption is greater in organizations where user credentials are critical to business operations because they can control systems.
The end-users of banking and financial services include retail banking, digital banking, commercial banking, investments through hedge funds, pension funds, wealth management, virtual currency and exchange systems, cross-border payment and money service companies. Banks are the world's first and largest end-user of AML solutions. They are the main clients of key players worldwide. According to the European Commission, around one percent of the EU's annual gross domestic product, or around 160 billion euros, is spent on money laundering activities such as corruption, arms trafficking, and smuggling. Human beings, drug trafficking, tax evasion, fraud, financing of terrorism, and other illegal activities. These facts and figures illustrate the importance of AML solutions and services in the banking and financial sectors.
Global Anti-Money Laundering (AML) Market Drivers:
The main driver of the anti-money laundering (AML) market is the convergence of increased regulations, enforcement, and next-generation technologies that address money laundering. Money management and fraud throughout the company. Additionally, it has become essential for financial firms to understand the importance of compliance and invest in anti-money laundering technology to reduce risk factors in business operations. Mandatory anti-money laundering software solutions for companies to prevent illegal fundraising activities are supposed to boost the industry in the coming years.
Global Anti-Money Laundering (AML) Market Restraints:
On the other hand, the global anti-money laundering market is limiting its growth due to the high cost of implementation, problems related to data security, and the complexity of data interpretation.
Coronavirus has revolutionized the growth of digital technologies. Due to the blockade imposed by governments around the world, every individual is now moving to digital platforms to meet daily needs. Digital payments are the primary use case, and the usage of digital wallets or electronic wallets has increased. Due to this change, the chances of illegal money transactions have also increased. The FATF has warned banks against illegal currency transactions. For this reason, the demand for AML solutions has increased, which has a big impact on the market's growth. The increasing amount of data on networks due to the heavy use of digital platforms increases the burden on the infrastructure security of banks and financial institutions. Despite many precautions, hackers target banks, causing huge losses. Hence, the demand for advanced AML solutions is increasing, supporting the growth of the market. Due to the increase in data on the networks, cybercrimes such as financial crimes are on the increase. Banks and financial institutions are now adopting data analysis tools to advance their security measures. This is expected to significantly impact the growth of the anti-money laundering market in the coming years.
GLOBAL ANTI-MONEY LAUNDERING (AML) MARKET REPORT COVERAGE:
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REPORT METRIC |
DETAILS |
|
Market Size Available |
2023 to 2029 |
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Base Year |
2023 |
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Forecast Period |
2024 to 2029 |
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CAGR |
15.6% |
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Segments Covered |
By Component, Product, Deployment Type, and Region |
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Various Analyses Covered |
Global, Regional & Country Level Analysis, Segment-Level Analysis, DROC, PESTLE Analysis, Porter’s Five Forces Analysis, Competitive Landscape, Analyst Overview on Investment Opportunities |
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Regions Covered |
North America, Europe, APAC, Latin America, Middle East & Africa |
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Market Leaders Profiled |
Fiserv Inc., SAS Institute Inc., NICE Actimize Inc., Norkom Technologies Ltd, IBM, TCS, Oracle Corp, Infosys, 3i Infotech Ltd, Accuity Birst Inc., ACI Worldwide Inc., Acquilan Technologies Inc., Ficrosoft, Cellent Finance Solutions AG, EastNets Ltd, and Ficrosoft Infor Global Solutions, FIS, and Others. |
The global anti-money laundering market is segmented and sub-segmented based on the component, product, deployment type, and region.
Software
Services
Transaction monitoring
Currency Transaction Reporting
Customer Identity Management
Compliance Management
Cloud
On-Premises
The on-premises segment will have a larger market size during the outlook period.
Global Anti-Money Laundering (AML) Market – By Region:
North America
Europe
Asia-Pacific
LAMEA.
The anti-money laundering software solutions market is currently dominated by North America due to technological advancement in this area. However, the Asia-Pacific anti-money laundering market is predicted to have the highest growth rate over the foreseen period.
Key market players:
Some of the major players in the global anti-money laundering market are Fiserv Inc., SAS Institute Inc., NICE Actimize Inc., Norkom Technologies Ltd, IBM, TCS, Oracle Corp, Infosys, 3i Infotech Ltd, Accuity Birst Inc., ACI Worldwide Inc, Acquilan Technologies Inc, Ficrosoft, Cellent Finance Solutions AG, EastNets Ltd, and Ficrosoft Infor Global Solutions, FIS.
Recent Developments:
In July 2020, NICE Actimize enhanced SURVEIL-X, a holistic business surveillance solution that enabled financial services organizations (FSOs) to rapidly build, test, and deploy customized analytical risk detection models to fill regulatory gaps in terms of risks. and operational
In March 2020, NICE Actimize added novel applications to its X-Sight market. These applications provide digital information to detect fraud and suspicious activity. The new additions also include capabilities that collect and connect open-source digital tracks and solutions that detect checks, credit cards, and mobile fraud.
In April 2019, NICE Actimize launched CDD-X to modernize KYC/CDD programs with advanced analytics and the power of artificial intelligence. The strong combination of AI technology with NICE Actimize's expertise in KYC/CDD reduces client review time by up to 70% and increases the accuracy of handling high-risk clients.
Frequently Asked Questions
Technological advancements such as artificial intelligence, machine learning, blockchain, and big data analytics are revolutionizing the AML landscape. These technologies enable more efficient detection of suspicious activities, automation of compliance processes, and enhanced risk assessment capabilities, thus driving market growth.
Frequent updates and amendments to anti-money laundering regulations, such as the Fourth and Fifth EU Anti-Money Laundering Directives, the USA PATRIOT Act, and the Financial Action Task Force (FATF) recommendations, significantly influence the market. Compliance with these regulations drives demand for AML solutions and services.
The proliferation of cryptocurrencies presents new challenges and opportunities for AML efforts. While cryptocurrencies offer anonymity and can be exploited for illicit activities, blockchain technology also provides a transparent and immutable ledger that can aid in tracing transactions. As a result, AML solutions are adapting to address the unique risks associated with cryptocurrencies.
Key trends include the increasing adoption of machine learning and AI for more accurate detection of suspicious activities, the integration of AML solutions with other financial crime prevention tools, the rise of regtech (regulatory technology) startups offering specialized AML solutions, and the emphasis on customer due diligence and enhanced transaction monitoring.
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