Anti-Money Laundering Solution Market

Market Overview

Anti-Money laundering solution enables the financial institutions and other banks to monitor customer's behavior for suspected criminal transaction activities through the digital process. There are numerous anti-money laundering solutions available in the market, which include current transaction reporting, transaction monitoring, compliance management, and customer identity management.

Surging money laundering cases, implementation of the government regulations to deploy money laundering solutions, and increasing adoption of digital payment modes are the factors fueling the market growth. However, lack of skilled anti-money laundering professionals hinders market growth.

The anti-money laundering solution market was valued at USD 1.15 billion in 2019 and is expected to reach USD 3.15 billion by 2029, growing with a CAGR of 18.5% during the forecast period.

Market Dynamics

Increasing online banking institutions, digital payment services, peer-to-peer transfer using smartphones, adoption of virtual currency have led to the increase in money laundering cases. This leads to financial institutions to suffer huge economic losses. For instance, according to the U.K.'s Financial Conduct Authority (FCA) 2019, between January and April 2019, the U.K. imposed USD 1.23 billion in fines. This trend depicts the significant increase in money laundering activities across the globe, further paving the way for the adoption of anti-money laundering solutions among enterprises.

Segmental Analysis

Software Segment Dominates the Anti-money Laundering Solution Market

The software segment dominates the anti-money laundering solution market on account of surging money laundering cases across the globe, increasing adoption of digitization across all industry verticals, and growing government regulations to deploy anti-money laundering solutions among the financial services. For instance, in 2018, the National Australian Bank, one of Australia's largest providers of financial services, deployed FICO anti-money laundering solutions to reduce the risk of money laundering in the digitization process and enhance customer's experience.

Increasing Trends of Digitization among All Industry Verticals to Drive the Transaction Monitoring Segment

The transaction monitoring segment is presumed to witness growth during the forecast period on account of the increasing trends of digitization among all industry verticals, which enables financial services to adopt transaction monitoring to monitor the customer transactions in real-time. Furthermore, increasing peer-to-peer transactions using smartphones is also one of the factors fueling market growth. For instance, in 2017, Skipton Building Society, located in the U.K., adopted Jade's third eye anti-money laundering solutions to monitor the transaction of the customers.  

Rising Adoption of Cloud-Based Solutions in SMEs Drives the Segment Growth

The cloud segment holds the largest market share on account of the rising adoption of cloud-based solutions in SMEs. Furthermore, numerous attributes of cloud deployment that includes lower overall costs, 24/7 services, and faster access to data from remote location drive the segment growth. For instance, in 2018, Carter Bank and Trust (the U.K.) adopted WorkFusion cloud anti-money laundering solutions to reduce the risk of money laundering among the customers and enhance operational efficiency.  

Large Enterprise Segment to Grow with the Highest CAGR

The large enterprise segment is projected to grow with the highest CAGR on account of the presence of heavy exchange of financial transactions among the enterprises, which empowers the necessity to adopt anti-money laundering solutions in order to eliminate the risk of money laundering and ensure customers safety. For instance, in 2018, Odisha State Cooperative Bank incorporated FINACUS anti-money laundering solutions to monitor customer behavior for suspected criminal financial activities.  

Impact of covid-19

The COVID-19 outbreak has had a devastating effect on all industry verticals globally. Additionally, according to industry experts, Financial Action Task Force (FATF) has identified the risk of criminal exploiting the unprecedented situation through cybercrime, fundraising for fake charities, and medical scams amid the COVID-19 pandemic. This has surged the adoption of anti-money laundering solutions to mitigate the risk of money laundering. For instance, as per the United Nations 2020, approximately 12% increase in cybercrime reported amid the pandemic COVID-19, further paving the way for the adoption of anti-money laundering solutions among the enterprises.

Regional Analysis

Rising Cases of Money Laundering in the U.S. to Surge the Demand for Anti-money Laundering Solution

North America holds the largest share in the anti-money laundering solution market on account of the presence of a large number of giant companies offering anti-money laundering solutions, such as Oracle, FICO, and TransUnion. Furthermore, the early adoption of technology among enterprises to enhance business operations is also one of the factors escalating market growth. Additionally, the increase in the number of money laundering cases in the U.S. also leads to the adoption of anti-money laundering solutions among enterprises. For instance, as per the Bureau of Justice Statistics 2019, approximately 24% of cybercrime cases were reported in 2019, of which 10% were reported for money laundering.  

Asia-Pacific to Be the Fastest Growing Region in the Adoption of Anti-money Laundering Solutions

Asia-Pacific is the fastest-growing region in the adoption of anti-money laundering solutions and is expected to grow during the forecast period. The increasing adoption of digitization in developing economies has surged the money laundering cases in the region. As per the National Crime Records Bureau (NCRB), about 77% increase in cybercrime was recorded in 2017 compared to 2016. 

Anti-Money Laundering Solution Market Segmentation

By Component

• Solution
• Services
  • Professional Services
  • Consulting Services
  • Training and Education
  • Risk Assessment
  • Forensic and Investigation
• Managed Services

By Technology Type

• Know Your Customer (KYC) Systems
• Transaction Monitoring
• Case Management
• Compliance Management
• Auditing and Reporting

By Deployment Type

• On-premises
• Cloud

By Organization Size

• Small and Medium-sized Enterprises (SMEs)
• Large Enterprises

By Region

North America

• The U.S.
• Canada
• Mexico

Europe

• The U.K.
• Italy
• France
• Spain
• Germany
• The Rest of Europe

The Middle East and Africa (MEA)

• Saudi Arabia
• Egypt
• South Africa
• The Rest of MEA

Asia-Pacific

• India
• China
• Japan
• Australia
• South Korea
• The Rest of Asia-Pacific

South America

• Columbia
• Brazil
• Chile
• Peru
• Argentina
• The Rest of South America