Global Anti-Money Laundering Solutions Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

Global Anti-Money Laundering Solutions Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

The Anti-Money Laundering Solutions Market was valued at USD 2.42 billion in the previous year, and it is expected to witness a CAGR of 15.06% during the forecast period to become USD 5.22 billion by the next five years. The emerging trend of digital banking solutions and strategic priority on the security of online payments support the growth and adoption of AML software by various BFSIs, creating an opportunity for market growth.

Key Highlights

• AML and Know Your Customer agreements are becoming more crucial across the financial sectors due to the rise of illegal tax avoidance, fear-based oppressor funding, electronic wrongdoing, and criminal financial infringement. Large and small financial institutions are seeing increased security breaches and costs associated with compliance, driving the market adoption of AML solutions globally.
• The increasing cases of money laundering worldwide are among the primary factors driving the adoption of anti-money laundering solutions across enterprises. For instance, according to the United Nations Office on Drugs and Crime (UNODC) forecast, the amount of money that has been laundered globally amounts to approximately 2-5% of the global GDP.
• Money Laundering issues have deeply concerned governments around the world, and to ensure seamless compliance with laws and regulations and reduce the amount of time spent working with high-risk clients, financial institutions quickly adopt intelligent, data-driven, and custom AML software. For instance, in May 2023, India's anti-money laundering (AML) regulations apply to businesses, banks, cryptocurrency exchanges, foreign portfolio investors, trusts, and non-governmental organizations announced to include company representatives, banking intermediaries, accounting professionals like Chartered Accountants and Company Secretaries in its AML law.
• However, integrating various software systems from developers, which are frequently incompatible with one another, presents difficulties for financial institutions. The ability of users and professionals to clearly understand and train employees on the application of such technologies and the difficulty of acclimating practices to technology systems or solutions that have not been tested are restricting the adoption of AML solutions across the financial sectors.
• COVID-19 positively impacted market growth due to the rise of digital banking services, which need AML software and services for verifying customer and Transaction details. In addition, the remote working conditions further stimulate the money launderers, thereby increasing the need to drive efficiency and effectiveness across the organizations by adopting anti-money laundering solutions. Financial institutions strategically allocate their resources and take initiatives to leverage technological advancements and automate their processes, securely and remotely, to minimize the risks of money laundering and other financial crimes in the post-pandemic time, fueling market growth.

Anti-Money Laundering Solutions Market Trends

Transaction Monitoring Solution is Expected to Grow Significantly

• Transaction monitoring software alerts the financial organization when a customer transaction violates the standard criteria set for that transaction, accounts, or customer during customer transactions. Once the software generates an alarm, the transaction monitoring process conducted by AML is automatically stopped and would suggest the Firm's Compliance or Risk Department continues to execute and review the cycle.
• AML transaction monitoring has been included in compliance programs for financial institutions to spot and report any anomalous behavior that might indicate money laundering, terrorist funding, or other financial crimes that call for constant surveillance of financial transactions. AML software for transaction monitoring is highly sought after since it scans and analyses various financial transaction data, including bank transfers, credit card payments, and other financial activities.
• Additionally, a well-formulated transaction monitoring system is crucial for an effective anti-money laundering (AML) ecosystem. It is more profound in the post-pandemic world, where most transactions are now being performed over digital platforms.
• Vendors in the market are integrating AI and ML into their tech-led (rather than human-led) transaction monitoring AML solutions, which will enable them to develop a strong decision support system by utilizing ML-powered predictive analytics and using self-learning methods to continuously evolve with the help of new data points and customer analysis, supporting the demand for highly reliable AML solutions for financial transaction monitoring.
• For instance, in June 2023, a comprehensive AI-based transaction monitoring solution was developed through a partnership between Scorechain, a crypto AML compliance solutions provider, and Hawk AI, an anti-money laundering surveillance technology provider to banks, payment firms, and other FinTech companies. The partnership has been strategically developed to provide a streamlined transaction monitoring solution to the global financial sector by combining their respective technological capabilities and expertise.

Asia-Pacific Expected to Exhibit Maximum Growth

• The APAC region is expected to register the maximum growth in Anti-Money Laundering Solutions Market during the forecast period due to the several innovations done by the regional players coupled with initiatives taken by the regional government to heighten the security of the financial landscape of the countries in the region.
• Companies in the region are increasingly integrating technologies, such as AI, ML, and automation, in their AML solutions to boost market growth. Also, several regional banks and financial institutions are collaborating with global AML solution providers to deploy their solutions, which will help them maintain compliance.
• The region is experiencing economic growth and inclusive financial services, leading to APAC's digitalization of payment infrastructure. The growth of financial activities in the region has accelerated the growth in financial crime, including money laundering.
• According to the United Nations Office on Drugs and Crime, the region is becoming vulnerable to money laundering activities, with nations like Indonesia, Singapore, Thailand, and the Philippines being particularly at risk, which creates an opportunity for the vendors in the region due to their expertise in providing AML solutions to protect the financial crimes.
• Additionally, in May 2023, MAS, the central bank of Singapore, collaborated with AvePoint, a cloud platform provider, to optimize and secure SaaS operations in the digital workplace for a digital platform to reduce money laundering and terrorist financing in the nation, which would increase the demand for AML software in the region to develop their solutions using AvePoint's Platform.

Anti-Money Laundering Solutions Industry Overview

The competitive landscape of the Global Anti-Money Laundering (AML) Solution Market is fragmented owing to the presence of several solution providers globally, such as SAS Institute, NICE Ltd., Experian, BAE Systems, FICO, Refinitiv, and many more. Also, several small and medium-sized companies are emerging in the market and raising funds, which is expected to help them create innovative solutions. Also, the existing market players are forming partnerships and collaborations to increase their market presence.

• November 2022 - Hoist Finance, a Swedish credit management company that operates in a few European countries, has selected the SAS AML technology supported by the consultancy advisory of Consortix, a crucial SAS AML partner. Due to the combination of leading AML software and successful AML implementation experience, Hoist Finance, SAS, and Consortix's collaboration can fight against financial crime in the market, which would help the Hoist Finance market growth.

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• The market estimate (ME) sheet in Excel format
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