Anti-Money Laundering Software to Help Financial Institutions and Banks Keep a Check on Fraudulent Activities

22 Oct 2020

Over the past decade or two, despite stringent checks, there have instances of fraudulent activities and cases of money being siphoned off through scams from banks. This has led to an increased demand for technological advancements that can help prevent such cases,  leading to a boom in demand for anti-money laundering software.

SmartSearch, a West Yorkshire-based anti-money laundering firm, stated that it recorded a huge jump in revenue as well as new client on-boarding in September due to the increased risk caused by the pandemic.

According to the market intelligence report published by BIS Research, the global anti-money laundering software market was estimated at $1,863.6 million in 2019 and is expected to grow at a CAGR of 14.12% during the forecast period from 2020 to 2025.

It is expected that owing to the increasing risk, the funding scenario in the market is likely to improve, and new start-ups may receive investments in the future. For instance, Slient Eight, an AI-based anti-money laundering company, received $15 million through venture capital-led investment mode.

The growth of the anti-money laundering market is accredited to the increasing volume of wired transactions, growing need for automated transaction monitoring systems, increasing adoption of cloud services by the financial sector, and high implementation of network analytics to streamline fraud detection operations, along with compliance requirement with international regulatory bodies.

Although the adoption of cloud services by the financial sector is increasing the ease of transactions, it also has a flip side. It is making the servers and digital transfers vulnerable to online frauds. Also, the growing penetration of counter-terrorism financing (CTF) compliance processes and regulations have been reinvented and have become more stringent.

Some of the major regulatory bodies are the Anti-Money Laundering Association (AMLA), Association of Certified Anti-Money Laundering Specialists (ACAMS), and International Compliance Association (ICA), among others.

Based on the new regulations enforced by the Financial Crimes Enforcement Network, the rules related to anti-money laundering have expanded for trust companies, several banks, and credit unions under the Bank Secrecy Act (BSA). Before these new rules, institutions had comparatively limited obligations related to anti-money laundering.

The AML software market is gradually growing over time and has witnessed significant growth in the past two years. However, the need for an end-to-end solution is the major requirement in the current scenario for the efficient functioning of AML software solutions. A complete solution enhances the capability and efficiency of the system by providing easy interaction between different types of AML software. In addition, financial institutions are focusing on system automation and transparency to reduce the chance of fraudulent activities.

 
 

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