Anti Money Laundering Market Size, Share, & Trends Analysis Report By Component (Software, Services), By Product Type, By Deployment, By End Use (BFSI, Government, Healthcare, IT & Telecom), And Segment Forecasts, 2019 - 2025

Industry Insights

The global anti money laundering market size was valued at USD 857.2 million in 2018 and is expected to register a CAGR of 13.6% from 2019 to 2025. Over the past few years, the increasing instances of money laundering have become a challenge for financial institutions and other sectors. Cybercriminals study organizations of scale to explore possible vulnerabilities in order to commit frauds and perpetrate ransomware attacks by demanding virtual currencies such as Bitcoin, Ether, and Ripple. As these virtual currencies are not issued or maintained by a central organization, it makes them a target of money laundering activities. It is estimated that hackers stole over USD 950 million from cryptocurrency exchange and infrastructure in 2018. Thus, the growing number of sophisticated cyber-attacks have raised concerns of substantial losses in several industries.

Globally, governments are continuously prioritizing activities to tackle money laundering to ensure national security and mitigate law enforcement risk. Moreover, the focus on implementing stringent regulations is also increasing. For instance, the EU’s 5th Anti-Money Laundering Directive (AMLD 5), which went into effect on June 2018, modifies the 4th Anti-Money Laundering Directive (AMLD 4) that was proposed in 2016 to counter terrorism funding through money laundering. The 5th Anti-Money Laundering Directive aims to establish a centralized and public register of companies and their ultimate beneficial owners, thus eliminating a shell company that exists solely on paper to transform the profits of crimes into seemingly authorized assets.

Government regulators are focusing on tracking digital currency and regulating it to eliminate anonymity in transactions and cross-border funds transfers. For instance, the Australian government has started regulating its Digital Currency Exchange to curb money laundering activities in the digital space. Advancements in financial technology (FinTech) and regulatory technology (RegTech) are also anticipated to offer new methods to curb money laundering through digital currency.

FinTech solutions such as Machine Learning (ML) are likely to play a key role in eliminating money laundering across numerous industries in the next few years. ML solutions use algorithms to analyze information and make decisions as well as learn from those decisions. Thus, over time, an ML product can modify its code and help users make more accurate decisions. The ML technology can help banks analyze a huge amount of data generated through transactions involving digital currencies, thus reducing the number of false alerts and allowing investigators to focus on reviewing high-risk cases.

Large-scale money laundering activities have created awareness among organizations across several industries. Banks have started providing anti-money laundering training to employees to help them understand and report suspicious activities. Moreover, organizations, governments, and international corporations are collaborating to establish initiatives to tackle money laundering complications at a global level.

Component Insights

The software segment dominated the market for anti-money laundering in 2018, accounting for over 62% of the market share. The adoption of anti-money laundering software across enterprises to reduce the cost of compliance, achieve consistent regulatory coverage, and respond to market changes quickly is driving the growth of the segment. The growing need for Know Your Customer (KYC) and Customer Due Diligence (CDD) in legal and financial institutions has created a demand for anti-money laundering solutions. Additionally, there is a growing demand for anti-money laundering software integrated with advanced technologies such as AI, machine learning, and intelligent automation to better combat money laundering.

The services segment is anticipated to register the highest CAGR of 14.2%. Enterprises are seeking new methods to enable robust compliance across industries. For instance, data privacy compliance establishes personal information protection guidelines and restricts companies and other organizations from sharing sensitive data, such as the social security number, credit card number, and driver's license number of their clients with several business entities.

The adoption of compliance products helps enterprises to reduce frauds and money laundering activities. As a result, the demand for effective compliance services from organizations that have in-house IT infrastructure lacking the capability of complying with regulations governing the industry is rising. Anti-money laundering service providers ensure that the client’s business is compliant with the current policies. They also benefit the clients by bringing experience and solutions to address their anti-money laundering requirements. Thus, enterprises are anticipated to outsource compliance services, thereby strengthening the segment’s growth.

Product Type Insights

The customer identity management segment accounted for the largest market share of over 32% in 2018. The rise of technologies that can easily invade an individual’s privacy, such as mobile apps, big data, and customer profiling, has led to a notable rise in money laundering activities and frauds. To curb the misuse and manipulation of data, governments across different regions have started taking initiatives to implement stringent regulations regarding data privacy. For instance, the General Data Protection Regulation (GDPR) has imposed a higher standard of data protection on EU enterprises, thus creating a higher demand for compliance solutions.

The transaction monitoring segment is anticipated to register the highest CAGR in the market for anti-money laundering. Transaction monitoring solutions enable banks and other financial institutions to regularly monitor customer transactions in real-time for potential risks. They also help financial institutions to assess historical/current information and transactions, providing an in-depth insight into customer activity. This subsequently helps provide insights into patterns of money laundering activities.

Deployment Insights

The on-premise deployment segment dominated the anti-money laundering market in 2018. The adoption of on-premise solutions has proven to ensure data safety. On-premise deployment supports enterprise information both at rest and in transit. Moreover, on-premise installation helps customers to understand the risk associated with the business. Thus, users can employ consultants with relevant industry experience, helping organizations to be protected against future malicious threats such as malware and phishing.

The cloud deployment segment is anticipated to register the highest CAGR over the forecast period. As digital transformation becomes the norm for the enterprise sector, many enterprises are anticipated to adopt SaaS-based anti-money laundering solution. Moreover, advancements in cloud computing technology, such as the emergence of PaaS and IaaS, are anticipated to enable cost-effective access to the cloud-based deployment of anti-money laundering solutions. Furthermore, the emergence of AI and machine learning would necessitate businesses to adopt advanced threat preventive technologies to support enterprise IT infrastructure. Thus, cloud-based anti-money laundering would help organizations to optimize business operations, which, in turn, would boost the demand for cloud deployment.

End-Use Insights

The BFSI segment accounted for the largest share of over 34% 2018 and is expected to continue dominating the market over the forecast period. The need for anti-money laundering compliance management has significantly increased, especially in Europe and North America since the financial crisis of 2008, owing to the implementation of new rules and regulations by governments. For instance, in 2016, Goldman Sachs announced the commencement of hiring additional people for achieving higher compliance requirements and speeding up organizational growth. However, with new systems to manage compliance and deadlines, the need for staffing new projects and constructing new systems is anticipated to increase within the organization. The solution would help centrally organize, coordinate, and track compliance-related activities, history, and schedules that enable regulatory control and reporting of risks related to non-compliance within the BFSI sector.

The IT & telecom segment is anticipated to register the highest CAGR over the forecast period. The development of new assurance roles and increased focus on anti-money laundering compliance & risk assessment have changed the market dynamics of the IT & telecom sector over the past few years, resulting in an increased adoption of a consistent risk-management approach across the IT & telecom sector. This, in turn, has encouraged clients to appoint more resources and compelled businesses to adopt anti-money laundering solutions.

The growing prevalence of frauds in the telecom industry has raised concerns in several nations, compelling companies to ensure that money laundering activities are thoroughly investigated. For instance, in January 2019, the U.S. Department of Justice levied money laundering, fraud sanctions, and stealing trade secret charges on a major telecom company in China. Moreover, several governments in Europe and the Asia Pacific are also focusing on anti-money laundering campaigns to investigate and penalize the same company regarding illegal transactions. Furthermore, rise in such efforts is likely to promote the growth of the IT & telecom segment.

Regional Insights

The North American market for anti-money laundering accounted for the largest revenue share in 2018. Increased illegal activities that facilitate the use of cash for drugs, human smuggling/trafficking, and corruption in the U.S. have created the need for stringent compliance. The implementation of laws such as the USA PATRIOT Act and Bank Secrecy Act (BSA) has necessitated financial institutions to adhere to anti-money laundering compliance. Moreover, the presence of prominent players such as NICE Actimize, Cognizant, ACI Worldwide, Inc., and SAS Institute Inc. is also likely to strengthen the growth prospects of the regional market.

The Asia Pacific market for anti-money laundering is anticipated to register the highest CAGR of 16.4% over the forecast period. Frauds and money laundering activities in emerging countries such as India and China are increasing. Growing prevalence of drug trafficking and procurement of illegal substances through exports in China has led the Chinese government to prohibit its citizens from undertaking cross-border exchanges amounting to over 50,000 Chinese Yuan per year. Thus, enterprises in Asia Pacific are anticipated to increasingly adopt anti-money laundering solutions.

Anti Money Laundering Market Share Insights

Financial institutions are under the scrutiny of governments and financial conduct authorities, which compels them to take preventive measures to curb money laundering activities. Thus, banks and financial service providers are adopting a cautious approach to strengthen anti-money laundering activities. The implementation of stringent laws, coupled with growing money laundering activities, has created a higher demand for anti-money laundering solutions.

Major companies operating in the anti-money laundering industry are allocating significant resources and funds for continuous product development to maintain their market positions. The increasingly complex compliance, regulatory, and risk management environment in businesses has led to the implementation of anti-money laundering solutions globally. Key industry players include Accenture, ACI Worldwide, Inc., NICE Actimize, Tata Consultancy Services Limited, Trulioo, Cognizant, SAS Institute Inc., Fiserv, Inc., Oracle, Open Text Corporation, Experian Information Solutions, Inc., and BAE Systems.

Report Scope

Segments Covered in the Report

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2015 to 2025. For the purpose of this study, Grand View Research has segmented the global anti money laundering market report on the basis of component, product type, deployment, end use, and region:

• Component Outlook (Revenue, USD Million, 2015 - 2025)

  • Software

  • Services

• Product Type Outlook (Revenue, USD Million, 2015 - 2025)

  • Compliance Management

  • Currency Transaction Reporting

  • Customer Identity Management

  • Transaction Monitoring

• Deployment Outlook (Revenue, USD Million, 2015 - 2025)

  • Cloud

  • On-Premise

• End-Use Outlook (Revenue, USD Million, 2015 - 2025)

  • BFSI

  • Government

  • Healthcare

  • IT & Telecom

  • Others

• Regional Outlook (Revenue, USD Million, 2015 - 2025)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

  • Asia Pacific

    • China

    • India

    • Japan

  • Latin America

    • Brazil

    • Mexico

  • MEA