Fact.MR has released its AI-based anti-money laundering (AML) solutions market report, which has revealed the past performance of the industry as well as the future growth of technology enabled anti-money laundering solutions.
Money launderers continues to outsmart existing prevention financial and technological infrastructure, albeit the finance industry worldwide invests over US$ 75 Bn on AML solutions. Over a billion dollars were invested by U.S. and Canadian agencies alone in 2019 to upscale their anti-money laundering tools.
Advanced cognitive technologies integrating AI and machine learning enables the system to automatically detect true money laundering instances. Implemented new systems immix the power of big data analytics and ML in identifying breach designs, and alert systems for similar events, thus preventing money laundering activities.
These AI-based AML tools also generate signals to notice unfamiliar or suspicious transactions from a wide array of data, which is often unstructured or at times structured. This results in sizable minimization in false positives and false negatives, while banks can deploy miniscule number of compliance analysts to inspect the reduced cases before filing SARs.
Fact.MR has estimated that spending by banks and other financial institutions on AI-enabled AML technology will increase rapidly over the coming years.
Key Insights Covered in AI-based AML Solutions Industry Survey:
- Market Estimates and Forecasts (2016-2031)
- Key Drivers and Restraints Shaping Market Growth
- Segment-wise, Country-wise, and Region-wise Analysis
- Competition Mapping and Benchmarking
- Market Share Analysis
- COVID-19 Impact on Demand for AI-based AML Solutions and How to Navigate
- Recommendation on Key Winning Strategies
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Revenue Analysis of AI-based AML Solutions from 2016 to 2020 Compared to Demand Outlook for 2021 to 2031
As per the AI-based anti-money laundering solutions industry research by Fact.MR – a market research and competitive intelligence provider, historically, from 2016 to 2020, market value of the industry increased drastically, wherein, countries such as the United States, France, Germany, United Kingdom, and France, India, and China held a significant share in the global market.
To strengthen financial systems against money laundering, terrorist financing, and other financial crimes, anti-money laundering (AML) compliance has been helping financial systems since 1970 following the enactment of the Bank Secretary Act (BSA). AML technology compliance has changed dramatically with the addition of artificial intelligence and regulatory layers in the financial jurisdiction.
Despite stringent regulatory reforms, incidence of money laundering and breaches is increasing, where substantial penalties have been reported. The U.S. Department of the Treasury roughly estimates that annually, around US$ 1.6 trillion of global money is involved in money laundering, representing 2.7% of global GDP.
Extensive revolution in technology has brought transformation in AML compliance services, which, in turn, has aided financial systems to address the challenges of money laundering. While increasing incidence of money laundering, terrorist financing, and other illicit financial transactions represent good opportunities for AI-based AML solution providers, growing layers of regulations and simultaneous technological restraints remain future milestones to be achieved by AML compliance providers.
Constant surge in anti-money laundering activities and the number of transactions has aggravated demand for AI-based AML software and solutions, which has increased the efficiency of companies and banks in the last few years. Artificial intelligence is decreasing the cost of AML compliance by doing all human work by itself.
American banks are spending nearly US$ 23.5 Bn annually, followed by European banks are around US$ 20 Bn, to identify AML transactions and their patterns. This spending by banks has been increased remarkably due to high fines being imposed on them by regulatory authorities; such as, American banks were fined US$ 23.6 Bn and European banks have paid fines of nearly US$ 1.2 Bn.
The aforementioned factors are increasing demand for AI in anti-money laundering solutions, which is expected to boost the global market during the forecasted era of ten years.
How Complex is AI-based AML Software?
Machine learning is a new technology as compared to other technologies that are not taught what to look for and how to detect tricky financial transactions that are related to financial crime.
AI-based AML software is prepared using supervised and unsupervised machine learning algorithms that are capable to learn by themselves by analyzing the given data without any error and provide almost accurate results. The AI-based anti-money laundering system is a straightforward and easy procedure to follow to implement in a financial organization.
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What are the Use Cases of AI-based AML Solutions?
AI is a very vast technology that has tremendous proficiencies. AI is used in many areas of compliance such as risks, operations, etc. AI is one of the most crucial steps in the financial industry, which is being implemented in numerous processes such as transaction monitoring, transaction screening, risk scoring, financial crime pattern detection, etc.
Financial organizations are progressing by implementing artificial intelligence in AML solutions, which is improving the accuracy of detection by decreasing false positive indications. In turn, these improvements are protecting firms from huge fines and continuing to their high reputation in the market.
Which Region is Projected to Offer High Growth Opportunities for AI-based AML Solution Providers?
As reported by the U.S. Department of Treasury, extensive penetration of money laundering prevails, representing involvement of US$ 300 Bn generated by criminal enterprises.
USA has enacted multiple laws and regulations for money laundering at the federal and state level. The USA PATRIOT ACT was enacted after the 2001 terrorist attack, which assisted the already enacted Bank Secretary Act (BSA) to strengthen the AML compliance program. Primary causes for money laundering are attributed to easy accessibility of the financial system and trade-based money laundering.
Canada’s regime for anti-money laundering and anti-terrorist financing activities is controlled by the Financial Transactions and Reports Analysis Center of Canada (FINTRAC), which actively monitors activities of financial institutions, intermediaries, and participating member countries. This regional scenario presents higher implementation of AI-based AML compliance by the financial sector and legally associated other institutions, owing to the stringent regulatory framework.
The U.S AI-based anti-money laundering solutions market is projected to acquire more than 1/4 of the overall market share from 2021 to 2031.
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How Will Asia Pacific Contribute to Revenue from AI-based Anti-Money Laundering Solutions?
The Asia Pacific region consists of multiple developing economies that are gradually growing to stable institutional, political, and economic capacities. Such a developing scenario also presents a high level of corruption, where money laundering has the demand and opportunity to flourish.
The region has a dispersed and less penetrated regulatory framework to monitor financial frauds and money laundering activities. According to the Global Fraud Survey 2016, concerning combating corruption, China has seen strong and sustained initiatives on the global stage.
While working for anti-corruption measures, inter-government cooperation, foreign multinationals, and Chinese companies are seeking a more transparent and ethical market over the risk of financial loss in a less transparent market. India has also initiated efforts towards AML following FATF recommendations such as GST, Aadhaar compulsion, and KYC reports that are gradually gathering data for AML compliances.
Increasing financial inclusions, international financial collaborations, growing online financial transactions, and rising number of financial institutions are likely to drive demand for AI-based AML solutions over the next ten years. The Asia Pacific AI-based transaction monitoring market will generate marvellous opportunities, as the market is acquiring the third-largest market share in the global market.
Which Use Case of AI-based AML Solutions Accounts for the Largest Market Share?
Artificial intelligence-enabled antimony laundering software performs numerous tasks such as transaction monitoring, KYC (know your customer), crime pattern detection, risk scoring customers and accounts, and many more, where fraud, risk & compliance is acquiring the largest market share among all use cases.
Fraud, risk & compliance is dominating the global artificial intelligence-based anti-money laundering software and solutions market, and will continue to do so through 2031.
Which End User is the Largest Shareholder in the Global Market for AI-based AML Solutions?
Banks are the primary source of money and deal with millions of transactions every day. They get thousands of false positive indications of financial crime through AML solutions, which increases the cost and time to track every single transaction and confirm them as an anti-money laundering activity. Due to this, they suffer from high expenses as well as high fines.
However, banks are major consumers of AML solutions, but due to the above-mentioned problem, they are adopting artificial intelligence in AML solutions to reduce AML compliance audit cost, false-positive alerts, and the complexity of AML methods.
Banks hold nearly 50% market share, which is projected to increase at a double-digit CAGR over the decade.
The insurance industry is the second-largest platform from the perspective of transactions, where individuals or firms can park their large sums of income and can recover them easily. These large sums of funds attract money launders, underworld operators, and terrorist groups.
In this process, insurance firms require to check an individual’s and firm’s identity carrying out financial transactions. To avoid hefty penalties and increase transparency, these firms have started applying AI in AML processes. Insurance companies hold more than one-sixth market share among all the end users.
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The AI-based anti-money laundering solutions industry is fragmented in nature, where market leaders are dominating due to their global reach and funds. There are numerous new players who are also acquiring a share in the global market and challenging the big players.
Moreover, companies are dedicatedly focusing on geographical expansion, product up-gradation, and much more. Some of the recent developments of key AI-based AML service providers are:
- On 11th February 2021, Nice Actimize launched WL-X, its breakthrough, next-generation Watch List (WL) screening solution leveraging the power of artificial intelligence for superior data management, advanced screening capabilities, and frictionless customer on-boarding.
- On 29th April 2021, NICE Actimize and Refinitiv partnered to offer the NICE Actimize’s SURVEIL-X Holistic Surveillance Suite to the Asia Pacific market.
- On 22nd June 2021, ComplAdvantage added Know Your Business (KYB) data to create the industry’s first unified and most comprehensive data graph of individuals and business entities. KYB is the process to verify the identity and understand the risk of business customers, either before or during their on-boarding to a service.
- On 9th June 2021, Pega Systems partnered with WithYouWithMe, a tech organisation that is making talent more accessible globally, to provide free training to WithYouWithMe students to train up Pega certified professionals, ready to start work on projects that require the specific Pega qualifications in process automation to help fulfil the digital skills gap.
- On 29th April 2020, Temenos AG launched eight propositions – using innovative Explainable AI (XAI) and cloud technologies – to help banks in their immediate response to the COVID-19 crisis.
- On 24th February 2021, Ayasdi launched Sensa, a pioneering solution for AML and financial crime detection to thwart money laundering activities.
- On 27th April 2021, AI-based big data analytics provider ThetaRay as launched SONAR Solutions, an AML cross-border payments solution as a cloud-based service.
Many recent developments related to companies offering AI-based AML solutions have been tracked by the team of Fact.MR, which are available in the available in the full report.
AI-based AML Solutions Market Report Scope
Historical Data Available for
|US$ Mn for Value|
Key Regions Covered
Key Countries Covered
Key Market Segments Covered
Key Companies Profiled
Available upon Request
Market Segments Covered in AI-based AML Solutions Industry Research
By End User
- Insurance Companies
- Asset Management
- Money Service Businesses
- Other FSIs
By Use Case
- Transaction Monitoring
- KYC (Know Your Customer)
- Fraud, Risk & Compliance
- Trade AML
- Capital Markets AML
- Correspondent Banking AML
- Credit Risk
- Crime Pattern Detection
- Risk Scoring Customers and Accounts
- Watch-List Screening
- Alert Management and Reporting
- Other Solutions
AI-based Anti-Money Laundering (AML) Solutions Market- Scope of Report
A recent study by Fact.MR on the AI-based anti-money laundering (AML) solutions market offers a 10-year forecast for 2021 to 2031. The study analyzes crucial trends that are currently determining the growth of the market. This report explicates on vital dynamics, such as the drivers, restraints, and opportunities for key market players along with key stakeholders as well as emerging players associated with the development of AI-based AML solutions.
The study also provides the dynamics that are responsible for influencing the future status of the AI-based anti-money laundering solutions market over the forecast period. A detailed assessment of value chain analysis, business execution, and supply chain analysis across regional markets has been covered in the report.
A list of prominent companies providing AI-based anti-money laundering solutions, along with their product portfolios, enhances the reliability of this comprehensive research study.
The study offers comprehensive analysis on diverse features, including production capacities, demand, product developments, revenue generation, and sales of AI-based AML solutions across the globe.
A comprehensive estimate on the market has been provided through an optimistic scenario as well as a conservative scenario, taking into account the sales of AI-based anti-money laundering solutions during the forecast period. Price point comparison by region with global average price is also considered in the study.
Analysis on Market Size Evaluation
The market has been analyzed for each market segment in terms of value (US$ Mn).
Market estimates at global and regional levels are available in terms of “US$ Mn” for value. A Y-o-Y growth contrast on prominent market segments, along with market attractiveness evaluation, has been incorporated in the report. Furthermore, absolute dollar opportunity analysis of all the segments adds prominence to the report. Absolute dollar opportunity plays a crucial role in assessing the level of opportunity that a manufacturer/distributor can look to achieve, along with identifying potential resources, considering the sales and distribution perspective in the global AI-based anti-money laundering solutions market.
Inspected Assessment on Regional Segments
Key sections have been elaborated in the report, which have helped deliver projections on regional markets. These chapters include regional macros (political, economic, and business environment outlook), which are expected to have a momentous influence on the growth of the AI-based AML solutions market during the forecast period.
Country-specific valuation on demand for AI-based anti-money laundering solutions has been offered for each regional market, along with market scope estimates and forecasts, price index, and impact analysis of the dynamics of prominence in regions and countries. For all regional markets, Y-o-Y growth estimates have also been incorporated in the report.
Detailed breakup in terms of value for emerging countries has also been included in the report.
In-depth Analysis on Competitive Landscape
The report sheds light on leading manufacturers of AI-based anti-money laundering solutions, along with their detailed profiles. Essential and up-to-date data related to market performers who are principally engaged in the production of AI-based AML solutions has been brought with the help of a detailed dashboard view. Market share analysis and comparison of prominent players provided in the report permits report readers to take preemptive steps in advancing their businesses.
Company profiles have been included in the report, which include essentials such as product portfolios and key strategies, along with all-inclusive SWOT analysis on each player. Company presence is mapped and presented through a matrix for all the prominent players, thus providing readers with actionable insights, which helps in thoughtfully presenting the market status, and predicting the competition level in the AI Based AML market.
- FAQs -
As per the detailed analysis of the North America AI-based AML software and solutions market, majority of key players are based in the region, owing to which, it holds nearly 1/4 market share.
Asia Pacific is the fastest emerging region and is projected to grow at a double-digit CAGR over the coming ten years
Key providers of artificial intelligence-based anti-money laundering solutions are striving to win retail clients, with client orders being the foremost.
Growing frequency of financial transactions, money laundering activities, and regulations are major drivers for the market
The market’s top five players hold nearly 1/4 share in the global market.
Top 5 countries driving demand for AI-based AML solutions are the United States, United Kingdom, Germany, China, and India.
The securities market holds the smallest market share across all regions.
Thailand is the largest spender on AI-based AML solutions in South Asia.
The United States is a major spender on AI-based AML solutions, and is also the leading region from the penalty perspective.
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Is the market research conducted by Fact.MR?
Yes, the report has been compiled by expert analysts of Fact.MR, through a combination of primary and secondary research. To know more about how the research was conducted, you can speak to a research analyst.
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Fact.MR follows a methodology that encompasses the demand-side assessment of the market, and triangulates the same through a supply-side analysis. This methodology is based on the use of standard market structure, methods, and definitions.
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