Europe and Asia-Pacific Anti Money Laundering Market, By Offering (Solution and Services), Function (Compliance Management, Customer Identity Management, Transaction Monitoring, and Currency Transaction Reporting), Deployment (Cloud and On-Premise), Enterprise Size (Large Enterprises and Small & Medium Enterprises), End Use (Banks & Financial Institutions and Insurance Providers) - Industry Trends and Forecast to 2031.
Europe and Asia-Pacific Anti-Money Laundering Market Analysis and Insights
The rise in money laundering cases across the globe and increasingly stringent regulations and compliance for AML, serve as a key driver for market growth. In addition, the growing demand for AML identification contributes to the market's positive trajectory. The market presents significant opportunities with the integration of AI and ML in developing AML solutions. However, the market faces restraints, such as the high complexity of AML solutions limiting its ability for early detection, along with the rise in financial crimes using advanced technology. Challenges constantly changing regulation framework and guidelines for AML solutions. Navigating these dynamics will be crucial for stakeholders in the market to capitalize on the opportunities and address the challenges effectively.
Data Bridge Market Research analyzes that the Europe and Asia-Pacific anti money laundering market is expected to reach USD 6,805.55 million by 2031 from USD 1,335.24 million in 2023, growing with a substantial CAGR of 24.1% during the forecast period from 2024 to 2031.
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Report Metric
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Details
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Forecast Period
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2024 to 2031
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Base Year
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2023
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Historic Years
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2022 (Customizable to 2016–2021)
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Quantitative Units
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Revenue in USD Million
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Segments Covered
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Offering (Solution and Services), Function (Compliance Management, Customer Identity Management, Transaction Monitoring, and Currency Transaction Reporting), Deployment (Cloud and On-Premise), Enterprise Size (Large Enterprises and Small & Medium Enterprises), End Use (Banks & Financial Institutions and Insurance Providers)
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Countries Covered
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Germany, U.K., France, Italy, Spain, Russia, Switzerland, Turkey, Belgium, Netherlands, Norway, Finland, Denmark, Sweden, Poland, Rest of Europe, China, Japan, South Korea, India, Australia & New Zealand, Singapore, Malaysia, Taiwan, Indonesia, Thailand, Philippines, Vietnam, and Rest of Asia-Pacific
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Market Players Covered
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Experian Information Solutions, Inc., SAS Institute Inc., Microsoft, NICE, Tata Consultancy Services Limited, Open Text Corporation, BAE Systems, ACI Worldwide, Fiserv, Inc., Cognizant, Trulioo, DIXTIOR, WorkFusion, Inc., FIS, Temenos Headquarters SA, Intel Corporation, IBM Corporation, Oracle, Accenture, FICO, Comarch SA, Wolters Kluwer N.V., LexisNexis Risk Solutions, Jumio, SAIGroup, GB Group plc, ComplyAdvantage, and SAP SE, among others.
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Market Definition
Anti-Money Laundering (AML) solutions are used to detect and warn institutions regarding money laundering, terrorist financing, fraud, electronic crime, bribery and corruption, tax evasion, embezzlement, information security, and illegal cross-border transactions among others that hugely impact the economy of the country and can hamper its reputation. AML is a term that is generally used to depict the fight against money laundering and financial crimes. Anti-Money Laundering (AML) solutions comply with various policies, laws, and regulations that help prevent financial crimes. These guidelines, policies, and laws are set by global and local regulators, which aim to strengthen the functioning of AML solutions.
Europe and Asia-Pacific Anti-Money Laundering Market Dynamics
This section deals with understanding the market drivers, advantages, opportunities, restraints, and challenges. All of this is discussed in detail below:
Drivers
- Rise in Money Laundering Cases Across the Globe
Money laundering is the process of converting illegal money to a legal form. The purpose of criminals laundering money is to earn revenue. Money laundering has become a significant financial problem and crime today. Every year, billions of dollars are illegally smuggled across international borders through various modes. Therefore, money laundering has become an important economic issue that financial authorities are trying to stop.
According to various stats and survey reports, money laundering is increasing annually. The only way to stop this is to constantly upgrade the existing AML systems with advanced technology, enforce stringent regulations for strengthening the AML solutions, and penalize defaulters for not following the norms or guidelines. Maintaining the AML systems to tackle the rising money laundering cases can ignite the anti-money laundering (AML) market.
Thus, the rise in money laundering cases across the region is driving the market growth.
- Increasing Stringent Regulations and Compliance for AML
An anti-money laundering compliance program is a set of regulations or rules a financial institution must follow to prevent and detect money laundering and terrorist funding activities. In recent times, financial crime against financial institutions such as banks and credit unions has significantly increased. There was a 50%- 60% increment in financial fraud cases in 2019 from 2021, which is expected to grow in coming years. The losses incurred by banks across the globe are quite significant. According to a survey conducted by Merchant Savvy in 2020, global losses from payment fraud were around USD 32.39 billion in 2020, and banking fraud losses in the United Kingdom (U.K.) were estimated to be around USD 205.00 million. To tackle these financial crimes in banks, credit unions, and other financial institutions, there is a requirement to develop anti-money laundering (AML) compliance programs.
Thus, the increasingly stringent regulations and compliance for AML are considered to strengthen the market, hence boosting the market growth.
Opportunity
- Increasing Adoption of Advanced Analytics in AML
Advanced analytics is the autonomous or semi-autonomous system that analyzes data or content using sophisticated techniques and tools that are quite different from traditional business intelligence. These analytics give a more profound analysis with which the system predicts and generates recommendations. Advanced analytics in AML solutions can play a vital role in detecting money laundering, financial crimes, identity theft, and cross-border transactions.
Moreover, advanced analytics can perform risk assessment analysis, fraud detection classification, save time and money, detect anomalies, analyze links, analyze textual analytics, and perform advanced transaction monitoring, among others. All the advantages offered by advanced analytics are expected to significantly strengthen AML solutions, improving financial institutes' efficiency. Therefore, the up-gradation is expected to create an opportunity for market growth.
Restraints/Challenges
- High Complexity of AML Solutions Limits its Ability for Early Detection
AML compliance solution should ensure that an institution can detect suspicious activities associated with money laundering, including tax evasion, fraud, and terrorist funding, and report to the appropriate authorities. An AML solution should not only focus on the effectiveness of internal systems but also needs to focus on the detection capabilities of money laundering. The critical components of AML systems Know Your Customer (KYC) & AML policy used in various functioning of AML solutions. Designing anti-money laundering systems can be challenging as the complexity involved in designing multiple modules is very high.
Considering the complexities involved in tailoring a system designed according to the requirements of the institutions can significantly affect the performance of AML systems by limiting the detection capabilities/ effective reporting, failure in detecting suspicious activity, risk assessment, and increasing false positives and false negatives. Moreover, the complexity of AML compliance solutions can also impact the cost of these systems. Hence, the high complexity of AML solutions limits its ability for early detection, which is retraining the market growth.
- Constantly Changing Regulation Framework and Guidelines for AML Solution
AML compliance practices concentrate on setting the guidelines and norms that prevent potential violators from engaging in money laundering fraud and financial crime. In this way, criminals cannot hide the illicit origin of money in any type of transaction. In recent times, online-based transition /payments have boomed, due to which numerous challenges have emerged. These challenges need to be tackled, and certain agencies are responsible for setting the guidelines and framework required to avoid financial crimes. Agencies such as the fifth Anti-Money Laundering directive (AML5), Bank Secrecy Act (BSA), Hong Kong Monetary Authority (HKMA), the monetary authority of Singapore (MAS), Australian Transaction Reports and Analysis Center (AUSTRAC), among others, help regulate the AML policies. These agencies have set the legal framework that is mandatory for businesses, organizations, and institutions so that their activities are observed.
Every country in Europe has its regulatory frameworks, which can be a great challenge for financial institutes to implement. Moreover, technological frameworks can also be a challenge to implement, and they can be expensive. The financial institutes skip the regulations and norms as implementing these is expected to challenge the market growth.
Recent Developments
- In July 2023, ComplyAdvantage introduced a new Know Your Business (KYB) solution, streamlining the process for faster and easier risk exposure management and facilitating customer base expansion
- In May 2023, FICO and Teradata successfully unveiled integrated advanced analytic solutions for real-time payment fraud, insurance claims, and supply chain optimization. This collaboration streamlined the development of industry-specific solutions, reducing time-to-delivery for joint customers. The global partnership is set to deliver cost reductions, enhanced profits, improved risk mitigation, and heightened customer satisfaction, harnessing the core competencies of Teradata and FICO to foster innovation in the AI-driven landscape
- In June 2021, Accenture announced the acquisition of Exton Consulting. This acquisition strengthened Accenture’s capabilities to help clients accelerate and scale their transformation projects in the financial services industry. This acquisition will help Accenture to strengthen its market position in Europe
- In June 2021, Comarch SA announced a partnership with Mashreq. This partnership took place to digitize wealth management solutions for the convenience of both companies' customers. This partnership will help the companies strengthen their workforce and help diversify their solution portfolio for their customer base
- In June 2023, ComplyAdvantage unveils Fraud Detection, a new solution harnessing machine learning algorithms to identify and prevent transaction-related fraud effectively
Europe and Asia-Pacific Anti-Money Laundering Market Scope
The Europe and Asia-Pacific anti-money laundering market is segmented into five notable segments based on the offering, function, deployment, enterprise size, and end use. The growth amongst these segments will help you analyze major growth segments in the industries and provide the users with a valuable market overview and market insights to make strategic decisions to identify core market applications.
Offering
- Solution
- Services
On the basis of offering, the Europe and Asia-Pacific anti-money laundering market is segmented into solution and services.
Function
- Compliance Management
- Customer Identity Management
- Transaction Monitoring
- Currency Transaction Reporting
On the basis of function, the Europe and Asia-Pacific anti-money laundering market is segmented into compliance management, currency transaction reporting, customer identity management, and transaction monitoring.
Deployment
- Cloud
- On-Premise
On the basis of deployment, the Europe and Asia-Pacific anti-money laundering market is segmented into on-premise and cloud.
Enterprise Size
- Large Enterprises
- Small & Medium-Sized Enterprises
On the basis of enterprise size, the Europe and Asia-Pacific anti-money laundering market is segmented into small & medium-sized enterprises and large enterprises.
End-Use
- Banks & Financial Institutions
- Insurance Providers
On the basis of end use, the Europe and Asia-Pacific anti-money laundering market is segmented into banks & financial institutions and insurance providers.
Europe and Asia-Pacific Anti-Money Laundering Market Regional Analysis/Insights
The Europe and Asia-Pacific anti-money laundering market is segmented into five notable segments based on the offering, function, deployment, enterprise size, and end use.
The countries covered in this market report are Germany, U.K., France, Italy, Spain, Russia, Switzerland, Turkey, Belgium, Netherlands, Norway, Finland, Denmark, Sweden, Poland, Rest of Europe, China, Japan, South Korea, India, Australia & New Zealand, Singapore, Malaysia, Taiwan, Indonesia, Thailand, Philippines, Vietnam, and Rest of Asia-Pacific.
Europe is expected to dominate Europe and Asia-Pacific anti-money laundering market due to growing demand for AML identification. The U.K. is expected to dominate in the Europe region due to its stringent regulations early adoption innovative technology landscape and established expertise. China is expected to dominate in the Asia-Pacific region due to growing demand for transaction monitoring systems in the Information Technology (IT) sector.
The country section of the report also provides individual market-impacting factors and changes in regulation in the market domestically that impact the current and future trends of the market. Data points such as new sales, replacement sales, country demographics, regulatory acts, and import-export tariffs are some of the major pointers used to forecast the market scenario for individual countries. Also, the presence and availability of regional brands and their challenges faced due to large or scarce competition from local and domestic brands, and the impact of sales channels are considered while providing forecast analysis of the country data.
Europe and Asia-Pacific Anti-Money Laundering Market: Competitive Landscape and Share Analysis
The Europe and Asia-Pacific anti money laundering market competitive landscape provides details of competitors. Details included are company overview, company financials, revenue generated, market potential, investment in R&D, new market initiatives, production sites and facilities, company strengths and weaknesses, product launch, product approvals, product width and breadth, application dominance, and product type lifeline curve. The above data points provided are only related to the company’s focus on the market.
Some of the major players operating in the Europe and Asia-Pacific anti money laundering market are Experian Information Solutions, Inc., SAS Institute Inc., Microsoft, NICE, Tata Consultancy Services Limited, Open Text Corporation, BAE Systems, ACI Worldwide, and Fiserv, Inc. Cognizant, Trulioo, DIXTIOR, WorkFusion, Inc., FIS, Temenos Headquarters SA, Intel Corporation, IBM Corporation, Oracle, Accenture, FICO, Comarch SA, Wolters Kluwer N.V., LexisNexis Risk Solutions, Jumio, SAIGroup, GB Group plc, ComplyAdvantage, and SAP SE, among others.
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