Transaction Monitoring Market

Global Transaction Monitoring Market Outlook

The transaction monitoring market is predicted to grow at a steady CAGR of 10.4% during the projected period of 2022 to 2032. The transaction monitoring market share is estimated to be worth more than US$ 39.5 Billion by 2032, increasing from US$ 12.7 Billion in 2021.

Attributes	Details
Transaction Monitoring Market Size (2021)	US$ 12.7 Billion
Transaction Monitoring Market Value (2022)	US$ 14.7 Billion
Transaction Monitoring Market Value (2032)	US$ 39.5 Billion
Transaction Monitoring Market Growth Rate (2022-2032)	10.4%
Transaction Monitoring Market Key Players	NICE Oracle FICO BAE Systems Fiserv

The requirement to handle KYC compliance and CTF activities, as well as the usage of advanced analytics to deliver proactive risk alerts, is projected to boost the transaction monitoring market. The most recent global transaction monitoring market trend is to automate money laundering prevention measures. This allows enterprises to process large amounts of data in order to safeguard their clients against cyber fraud.

Global Transaction Monitoring Market Historical Analysis (2015-2021) Vs. Forecast Outlook (2022-2032)

According to the new market research report on the Transaction Monitoring Market released by Fact.MR, the transaction monitoring market growth is predicted to drop marginally from 2022 to 2032.

During the previous analysis period of 2015 to 2021, the sales performance management software market share saw a net worth of US$ 12.7 Bn in 2021, with a year-on-year growth rate of 15.3%. The impact of COVID-19 could cripple the strength of the transaction monitoring market.

The spread of COVID-19 is a major cause of the fall in the CAGR of the transaction monitoring market, as more individuals shop online using credit cards and other forms of online payment, providing more opportunities for cybercriminals to act. As a result, the COVID-19-induced quarantines resulted in an increase in cybercrime.

However, a global market analysis of transaction monitoring systems discovered some benefits from the widespread outbreak of COVID-19. People started working from home and shopping online, which opened up greater opportunities for the transaction monitoring market. As a result, it accelerated the growth of the global transaction monitoring market.

What are the Different Market Dynamics Driving the Global Transaction Monitoring Market?

“Companies who develop transaction monitoring systems see a huge opportunity to improve their products as artificial intelligence (AI) and machine learning become more sophisticated. It has the potential to alert business owners about severe issues sooner. This is emerging as a real opportunity in the transaction monitoring market.”

The adoption of the transaction monitoring system is due to an increase in the requirement for advanced analytics to identify high-risk activities and the need for enterprises to comply with stringent regulatory agreements. Furthermore, the market is expected to benefit from the integration of advanced technologies such as big data, AI and machine learning as well as an increase in the deployment of transaction monitoring systems by SMEs.

E-commerce businesses must employ secure payment gateways that adhere to the most up-to-date and stringent legislation and requirements for conducting business online and making online payments. This is a significant aspect driving transaction monitoring market share.

Another major transaction monitoring market trend is the increasing use of advanced analytics to proactively monitor client transactions by businesses all over the world. KYT (Know Your Transaction) is intended to detect any potentially dangerous transactions that could result in cyber fraud, which leads to improved transaction monitoring market statistics.

The new model KYT is so efficient that it can detect fraudulent credit card transactions before they happen. It can also tell which credit card was used to make the purchases and set new heights for the transaction monitoring market.

To leverage the window of opportunity to create a lasting competitive advantage, banks should match their transaction-monitoring systems to their highest-risk transactions and consider the efficiency ratings of warnings their systems have previously generated.

Financial institutions must nevertheless monitor their customers' activities, identify and investigate odd or suspicious behaviour, and report this to the appropriate authorities in a fair amount of time, according to regulators of FCA.

What are the Challenges in the Transaction Monitoring Market?

“The lack of qualified and skilled IT personnel, combined with the increasing complexity of managing cross-border compliance, is creating a challenge to the expansion of the transaction monitoring market.”

One of the key shortcomings in the transaction monitoring market is that there aren't enough individuals competent in monitoring and evaluating the data and information generated on a regular basis by these systems. Developing more complex systems that are easier to use for persons who aren't skilled in IT or business analytics is perhaps the greatest challenge that companies in the global transaction monitoring market confront.

In the projection period of 2022 to 2032, increased complexity in managing cross-border and multi-jurisdictional AML compliance may pose a hurdle to transaction monitoring market growth. The high rate of false positives in current software solutions makes it difficult for the expansion of the transaction monitoring market.

To combat money laundering, most financial institutions now employ rules-based transaction monitoring and KYC systems. Detection scenarios in this solution presently only issue alerts based on known and existing scenarios. In cybersecurity, there is no way to detect new scenarios similar to zero-day attacks, which leads to false-positive results.

Region-wise Outlook

What is the Transaction Monitoring Market Outlook for the U.S.?

With an estimated market revenue of US$ 2.9 billion by 2032, North America is the leading region in the transaction monitoring market. The United States currently accounts for the majority of global e-commerce transactions. It is anticipated to have a steady CAGR of 10.3% through 20320.

KYC standards and regulations are also intended to prevent terrorist organizations from receiving funds as much as feasible. As a result, advanced analytics are frequently included in these laws and regulations.

These advanced analytics are intended to notify credit card issuers of probable credit card fraud or terrorist financing activities while they are happening or (hopefully) before they happen. For the time being, all of these changes, as well as others, are likely to drive expansion in the North American transaction monitoring market.

What is the Transaction Monitoring Market Outlook for Europe?

By 2032, the European Union is estimated to have a market share of US$ 1.7 billion in the transaction monitoring market. The UK transaction monitoring market is predicted to grow at a CAGR of 9.5 percent by 2032. The reason for this is that e-commerce and e-business are becoming increasingly popular among Europeans.

The pandemic is to blame for the majority of the surge in these activities. Online transactions, in any event, entail additional potential for online fraud. As a result, businesses across the European Union are discovering that they need to use transaction monitoring tools far more frequently.

What is the Transaction Monitoring Market Outlook for Asia Pacific?

During the projected period, China is expected to have the highest regional transaction monitoring market growth rate of 9.7%. Through 2032, Japan is expected to grow at an annual rate of 8.7%, with a transaction monitoring market share of 2.3 billion. This is due to more businesses modernizing and embracing e-commerce and e-business as a legitimate and acceptable means of purchase.

Category-wise Outlook

What is the Growth Outlook for the Transportation Monitoring Market according to Different Segments?

Based on component, Service Segment is anticipated to lead the transaction monitoring market with a CAGR of 10.1% during the forecast period.

Due to rising data protection rules and a shortage of high-cost security solutions within the payment network infrastructure, the SMEs category is predicted to develop at a faster CAGR throughout the projection period. SMEs are small in size, but serve a big number of customers around the world.

The BFSI sector is likely to account for a considerable portion of the global transaction monitoring market share. The adoption of transaction monitoring software is high in various banks and financial institutions for managing various types of risk, such as money laundering, terrorist financing, foreign exchange risk, risk compliance of bank operations, interest rate risk, and to monitor various suspicious transactions.

Which is the Leading Deployment Type for the Global Transaction Monitoring Market?

Small and Medium-sized Enterprises (SMEs) are rapidly adopting the cost-effective cloud deployment type, and the cloud deployment mode is predicted to develop at a higher CAGR of 10% throughout the projection period. This model saves SMEs money on hardware, software, storage, and technical personnel.

The cloud-based platform provides a single approach to securing business applications in the form of SaaS-based security services. The CAGR between 2015 and 2021 is significantly larger. i.e. 14.9 % as a result of technical progress. The collapse is partially determined by the COVID-19 outbreak.

It is, nonetheless, advantageous for firms with limited budgets for security measures. Due to the rise in online shopping habits, which has led to the adoption of the transaction monitoring systems, the retail & manufacturing industry is predicted to develop at the fastest rate by following the transaction monitoring market trends.

How Strong is the Competitive Landscape for the Transaction Monitoring Market?

NICE, Oracle, FICO, BAE Systems, and Fiserv are some major key players in the transaction monitoring market. It is expected from the legacy players to accelerate efforts to gain additional transaction monitoring market share through mergers, acquisitions, and alliances with the right injection of funds.

Both industry players and investors have been active in the investment activities that have provided impetus for software advancements, improving the transaction monitoring market statistics.

What are the Recent Developments in the Field of Transaction Monitoring Market?

• In September 2020, as it moves into the financial crime software sector, Nasdaq said it will introduce AI technologies to help retail and commercial banks simplify AML investigations. The company expects that the approach would make it easier and less expensive for banks and other financial institutions to sort through the flood of signals issued by bank transaction monitoring systems that indicate suspected money laundering instances.
• Huobi Group established an in-house transaction intelligence tool in April 2020 to combat illegal activities on its crypto exchanges. The new Star Atlas program will automatically freeze accounts that are suspected of engaging in suspicious transactions while a compliance officer investigates the matter. It will aid Huobi's exchanges in detecting anomalous behavior and problematic transactions in real time.

Key Segments

• By Component :

  • Solution
  • Services

• By Application Area :

  • Anti-Money Laundering
  • Customer Identity Management
  • Fraud Detection and Prevention
  • Compliance Management

• By Functions :

  • Case Management
  • KYC/Customer Onboarding
  • Dashboard and Reporting
  • Watch List Screening

• By Deployment Type :

  • On-Premises
  • Cloud

• By Organizational Size :

  • Large Enterprises
  • Small and Medium Sized Enterprises

• By Verticals :

  • Banking, Financial Services, and Insurance
  • Government and Defence
  • IT and Telecom
  • Retail
  • Healthcare
  • Energy and Utilities
  • Manufacturing
  • Others

• By Region :

  • North America
  • Europe
  • Asia Pacific
  • Middle East and Africa
  • Latin America