Since the early 90s, money laundering has been a major challenge hampering the economic growth of countries across the globe. In the recent years, the world has witnessed some of the biggest money laundering scandals till date. As per the United Nations Office on Drugs and Crime, approximately $800 billion – $2 trillion U.S. dollars are laundered every year. The digitalization of the financial services sector has improved its functioning, but at the same time, has also exposed it to the risk of money laundering.
The growing incidences of such scandals over the last few years, increased frequency of wired transactions, and technological developments have led to the development of anti-money laundering (AML) software. Banking and financial institutions are widely adopting AML software to enhance their working efficiency and curb the cases of money laundering, thus propelling the growth of the AML software market.
Additionally, the strict rules and regulations imposed by the governments and the market penetration of counter-terrorism financing (CTF) are further leveraging the growth of the AML software market and are forcing organizations to comply with the rules to avoid hefty fines and penalties.
The latest market intelligence report, published by BIS research titled “Global Anti-Money Laundering Software Market – Analysis and Forecast (2018-2023),” provides details about the expected growth of the global AML software market during the forecast period, 2018-2023. As per the report, the market generated $868.0 million in 2017 and is projected to grow at a CAGR of 12.29% during the forecast period to reach $1.77 billion by 2023.
Despite the high projected growth, factors such as the risk of security breaches, integration of AML software in existing systems, and the high cost involved in their implementation are expected to restrict the growth of the market.
Leading players are heavily investing in the market to develop advanced and more efficient AML software systems. At present, the AML software market includes transaction monitoring, currency transaction reporting, sanction screening, customer identity management, compliance management, and case management software. Based on the report by BIS Research, the transaction monitoring software is expected to generate the largest revenue by 2023. Further in terms of region, the AML software market is anticipated to be dominated by the North American region.
The market has witnessed several organic and inorganic strategies adopted by various players, such as AML partners, BAE Systems, Experian PLC, FICO, Lexis Nexis, and Oracle Corporation. Advancements in the digital industry have transformed the financial sector. The integration of big data analytics and robotic process automation in AML software are further expected to boost the AML software market, thus strengthening the financial services sector.