Trends in Anti-Money Laundering 2011

by Neil Katkov, PhD, July 18, 2011
Product Trends/ Reviews
Global, Asia-Pacific, EMEA, Latin America, North America

Abstract

Spending on AML compliance, including operations and technology, will reach US$5.8 billion globally in 2013, including US$1.4 billion on internal and external technology spending.

In this report, Trends in Anti-Money Laundering 2011, Celent presents the results of an exclusive survey of AML compliance departments at more than 75 financial institutions globally. The report benchmarks AML operations and costs and analyzes trends in AML technology, including Celent's estimates of global spending on AML software, vendor consolidation, and advances / product enhancements. The report also examines the emerging trend towards enterprisewide compliance, in terms of consolidation of siloed AML operations and technology, as well as integration of AML and anti-fraud.

“Although intuitively attractive, many institutions may find it difficult to build a business case for integrating AML with anti-fraud,” says Neil Katkov, PhD, Senior Vice President, Asia for Celent and author of the report. “Fortunately, the compliance-driven development of modern AML software, analytics, and case management has created a new generation technology that can often deliver better results than legacy anti-fraud systems.”

This report is first in a series of four reports covering the current state of the AML technology market. The other reports in the series are:

  • Evaluating the Enterprisewide Compliance Vendors 2011: Solutions for Anti-Money Laundering and Anti-Fraud profiles more than 20 providers of end-to-end AML/fraud solutions, and assesses them using Celent's ABCD evaluation model.
  • Evaluating the Vendors of Watchlist and Sanctions Solutions profiles providers of both batch-based and real time OFAC/sanctions watchlist solutions and assesses them using Celent's ABCD evaluation model.
  • Specialist Providers of Anti-Money Laundering Technology presents an overview of advanced technology issues in AML and provides profiles of a variety of specialist vendors. An ABCD evaluation is not provided because these firms are working in different areas.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is part of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America (Boston)
Tylor Tourville
ttourville@celent.com
Tel.: +1 617 424 3284

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)208 870 7875

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81.3.3500.3023

Table of Contents

Executive Summary

3

Introduction

4

AML Trends: The View from the Cockpit

5

 

AML Drivers

5

 

AML Operations: A Scale Game

6

 

AML Compliance Costs

7

 

AML Spending Trends

9

 

AML Compliance Cost by Function

11

 

Technology Sourcing Trends

12

Global Spending on AML Compliance

15

 

AML Technology Spending

15

 

AML Software Spending

17

AML Software Vendors

19

 

Market Consolidation

20

Evolution in AML Technology

23

Enterprisewide Compliance

26

 

Integrating Anti-Fraud and AML: The Holy Grail

27

 

The Case for Enterprisewide Compliance

28

 

Centralized Case Management as a First Step to Enterprisewide Compliance

30

 

Internal Fraud

31

Expansion of AML Markets

32

 

Small Banking

32

 

Insurance AML

33

 

Nonbank Financial Services

34

 

Regional Markets

34

AML by ASP

36

Conclusions

37

Leveraging Celent’s Expertise

39

 

Support for Financial Institutions

39

 

Support for Vendors

39

Related Celent Research

40

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