MARKET OVERVIEW- ASIA-PACIFIC ANTI-MONEY LAUNDERING MARKET
Money laundering is a type of financial crime. It involves disguising financial assets so they can be used without detection of the illegal activity that produced them. Anti-money laundering (AML) refers to a set of procedures, laws and regulations designed to stop criminals from generating income through illegal actions. An increase in cases of money laundering, technological innovations coupled with key initiatives implemented by several governments to enhance the security of the financial transactions are key factors driving the growth of the market in the region. Also, several companies are focussing on integrating technologies, such as AI, ML, and automation. This is expected to further fuel the growth of the market in the region. Furthermore, a holistic view of data to curb financial crimes and technological advancements in the BFSI sector are anticipated to provide lucrative growth opportunities for key players operating in the market.
MARKET DRIVERS
The growth of the Anti-Money Laundering market is driven by the rise in cases of money laundering in the Asia-Pacific region. According to official data accessed by PTI, the Enforcement Directorate (ED) has filed as many as 5,422 cases or Enforcement Case Information Reports (ECIRs) under the criminal sections of the Prevention of Money Laundering Act (PMLA) while it attached (provisionally) assets worth a whopping Rs 1,04,702 crore as part of 1,739 orders issued till March 2022. According to central bank data, the People's Bank of China has fined more than 370 million yuan ($ 53.9 million) for money laundering violations in the first six months of 2020 alone, exceeding 2019. In 2021, financial institutions and others in Japan reported record 530,150 transactions of suspected money laundering last year, up by 97,948 from the previous year. Thus, the rise in cases of money laundering is a major factor that is anticipated to drive the growth of the, market. Also, several companies across various countries are focussing on launching technologically advanced AML solutions. This is expected to further fuel market growth over the estimated time period.
MARKET OPPORTUNITIES
Several governments across various countries are focusing on enacting stringent regulations and ensuring compliance with AML. For instance, in the Federal Court of Australia, the Australian Transactions and Reports Analysis Centre (AUSTRAC) and Westpac jointly filed an agreed statement of facts, including a proposed civil penalty of AU$1.3 billion ($945 million) for anti-money laundering/counter-terrorist financing (AML/CTF) breaches and child endangerment charges resulting from the bank’s facilitation of payments for related online services. Such stringent regulations and compliances for AML are expected to fuel the market’s growth over the estimated time period. Also, the implementation of key initiatives to promote awareness regarding money laundering are expected to contribute to the growth of the market.
MARKET RESTRAINTS
Rising complexities of AML solutions are limiting the ability of early detection of frauds. This is a major factor which is expected to have a negative impact on the growth of the market.
MARKET GROWTH CHALLENGES
The high cost involved in the deployment of anti-money laundering solutions is expected to challenge the growth of the market. Also, the lack of investments in secure payment systems among the underdeveloped nations is expected to act as a major challenge for the growth of the market.
CUMULATIVE GROWTH ANALYSIS
The report provides an in-depth analysis of the Asia-Pacific Anti-Money Laundering market including, market size, and compound annual growth rate (CAGR) for the forecast period of 2023-2029, considering 2022 as the base year. An increase in cases of money laundering worldwide has led to a rise in demand for anti-money laundering solutions, and therefore, the market is expected to witness growth at a specific CAGR from 2023-2029.
ASIA-PACIFIC ANTI-MONEY LAUNDERING MARKET SEGMENTAL OVERVIEW
Asia-Pacific Anti-Money Laundering market comprises of different market segments like component, organization size, deployment type, vertical and Country.
ASIA-PACIFIC ANTI-MONEY LAUNDERING MARKET BY COMPONENT
On the basis of component, the Asia-Pacific Anti-Money Laundering market consists of key segments like
The software segment is expected to gain the most market share over the forecast period. AML software helps companies fight financial crime through transaction monitoring to identify any suspicious activity such as terrorist financing and money laundering activities. In addition, it ensures that companies follow anti-money laundering compliance and legal requirements when working with customers and partners to avoid doing business with money laundering entities.
Also, services segment is expected to register high growth over the forecast period. AML services help prevent a wide variety of money laundering and sanctions related risks for financial institutions.
ASIA-PACIFIC ANTI-MONEY LAUNDERING MARKET BY ORGANIZATION SIZE
On the organization size, the Asia-Pacific Anti-Money Laundering market consists of key segments like
- Small and Medium-Sized Enterprises
- Large Enterprises
Large enterprises followed by small and medium-sized enterprises segment is expected to hold a large share in the market. Large enterprises were the first to implement AML solutions as they use many business applications that are vulnerable to fraudulent attacks. Large companies with different types of IT infrastructures face the challenge of effectively managing the security of their applications.
ASIA-PACIFIC ANTI-MONEY LAUNDERING MARKET BY DEPLOYMENT TYPE
By deployment type, the Asia-Pacific Anti-Money Laundering market includes segments like
The on-premise segment is expected to lead the market over the forecast period. On-premises solutions provides organizations complete control over the platforms, applications, systems and data that IT staff can manage. Many organizations use on-premise anti-money laundering to protect them from severe malicious threats.
Also, the cloud segment is expected to witness high growth over the estimated time period. Cost-effectiveness provided by cloud-based AML software is a key factor driving the growth of the segment.
ASIA-PACIFIC ANTI-MONEY LAUNDERING MARKET BY VERTICAL
The Asia-Pacific Anti-Money Laundering market finds key applications across different verticals like
- Banking and financial
- Insurance providers
- Gaming and gambling
- Others
The banking and financial vertical is expected to dominate the market over the forecast period. The rise in the regulatory measures that banks must consider to prevent and detect financial crime, is expected to stimulate the demand for anti-money laundering solutions.
The insurance providers segment is expected to witness high growth over the forecast period. The rise in focus on preventing money laundering frauds by insurance providers is expected to drive the growth of the segment.
ASIA-PACIFIC ANTI-MONEY LAUNDERING MARKET BY COUNTRY
The Asia-Pacific Anti-Money Laundering market is studied for the following countries:
- China
- Japan
- India
- Rest of Asia-Pacific
China is expected to lead the market over the forecast period. The rise in money laundering cases and an increase in focus of financial institutions on digital payment related issues are key factors driving the growth of the market in the region. Also, key government initiatives to combat money laundering are expected to provide opportunities for key players in the market. For instance, in early 2022, the People’s Republic of China (PRC) announced the launch of a 3-year anti-money laundering campaign (AML Campaign). The AML Campaign intends to address the issue of money laundering and related crimes that need to be considered by both regulated entities in China and Australian reporting entities.
India is expected to witness high growth over the forecast period. Key initiatives implemented by the government to enhance the security of financial transactions are a key factor driving the growth of the market in the country. For example, on August 1, 2022, the Insurance Regulatory and Development Authority of India (IRDAI), issued a new set of regulations to safeguard the insurance industry from fraudulent financial activities like money laundering. This was brought into effect in anticipation of updating and consolidating AML/CFT provisions in a single Master Guidelines instrument.
COVID-19 IMPACT ANALYSIS ON THE ASIA-PACIFIC ANTI-MONEY LAUNDERING MARKET
Axiom MRC provides a 360-degree analysis of micro and macro-economic factors with regard to the Asia-Pacific Anti-Money Laundering market. The report involves an exclusive study on COVID-19 impact analysis. In addition, the report also includes a complete analysis of changes in the Asia-Pacific Anti-Money Laundering market, expenditure, and economic and international policies on the supply and demand side. The report also studies the impact of the pandemic on Asia-Pacific economies, international trade, business investments, GDP, and the marketing strategies of key players present in the market.
The outbreak of the COVID-19 virus has become a healthcare emergency, and the impact of COVID-19 has significantly affected the entire economy, and society in general. It has significantly changed the economic situation in the Asia-Pacific region. The pandemic has affected severely vulnerable groups, including older people with disabilities, ethnic minorities and those living in deprived areas. COVID-19 has positively impacted the growth of the market due to a rise in online sales and the increasing use of online payment solutions. The use of digital wallets or e-wallets has also increased. Due to this change, the chances of illegal money transactions have also increased. FATF has warned banks about illegal cash transactions. Because of this, the demand for anti-money laundering solutions has increased. This is expected to drive the demand for anti-money laundering solutions in the upcoming years.
COMPETITIVE LANDSCAPE ANALYSIS
The competitive landscape analysis of the Asia-Pacific Anti-Money Laundering market is majorly focused on expanding the growth of the anti-money laundering industry in the Asia-Pacific region with new product innovation, business expansion, and the increasing presence of a range of manufacturers operating in anti-money laundering sector has led to the growing demand for the market. Besides, the market offers a range of products in different applications to fulfil the requirements of consumers, which further contributes to healthy growth in the market.
The key players studied in the market are
- BAE Systems (UK)
- Nice Actimize (US)
- FICO (US)
- SAS Institute (US)
- Oracle Corporation (US)
- Experian (Ireland)
- LexisNexis Risk Solution (US)
- Fiserv (US)
- FIS (US)
- Dixtior (Portugal)
- TransUnion (US)
- Wolter’s Kluwer (Netherlands)
- Temenos (Switzerland)
- Nelito Systems (India)
- TCS (India)
- Workfusion (US)
- Napier (UK)
- Quantaverse (US)
- Complyadvantage (UK)
- Acuant (US)
- FeatureSpace (UK)
RECENT DEVELOPMENT:
March 2022: BAE Systems partnered with the University of Nottingham Malaysia to tackle missed risk, and how unsupervised machine learning can be used in the discovery of previously undefined risks in money laundering, academia and analysts will work side by side to push the boundaries of machine learning for enhanced AML solutions.
November 2020: ACI Worldwide, Inc. launched a new solution for Fraud Prevention using Cloud. The key feature of this solution was the usage of advanced technologies such as machine learning and predictive analytics to help banks and intermediaries identify and mitigate financial fraud. This solution was designed to meet the fast-changing global fraud landscape, increasing pressure on financial institutions, maximize operational efficiencies and mitigate increased risks.
