According to a new study by a market research and competitive intelligence provider, the global AI-based anti-money laundering (AML) solutions market is anticipated to add 8X value by 2031.
To strengthen the financial systems against money laundering, terrorist financing, and other financial crimes, artificial intelligence-based anti-money laundering (AML) compliance has been helping the financial system with its robust capabilities. AI-enabled AML technology compliance has changed dramatically with the addition of regulatory layers in the financial jurisdiction. Large and small banks are expected to spend 0.5% to 1.4% of their operating expenses on AI-based AML solutions.
Increasing anti-money laundering activities and the inability to track them is forcing regulators to fine financial institutions, owing to which, these institutions have increased their investments towards the same. Based on researches, American banks are spending nearly US$ 23.5 Bn, followed by European banks at US$ 20 Bn, every year on AML solutions.
Moreover, AI-based AML solutions are majorly used to monitor transactions, detect patterns, and inform management by generating a score of risk so that appropriate steps can be taken at right time. During FY2019 and FY2020, a lot of banks have fully adopted AI in their AML processes to avoid reputation risk and hefty penalties.
Key Takeaways from Market Study
· Banks, as end users, capture nearly half of the global market share, and are set to create an absolute $ opportunity of more than US$ 25 Bn over 2021-2031
· Among the use cases, fraud, risk & compliance has been the fastest-growing segment.
· The Europe AI-based AML solutions market set to dominate in 2021, where Germany and France are set to acquire more than one-fourth market share and generate abundant revenue.
· The market in China and Thailand is expected to dominate Asia Pacific with more than one-third and one-sixth market share, respectively.
“High R&D on artificial intelligence to improve overall product quality and increase in fraudulent & money laundering activities are set to aid market growth over the coming years,” says a Senior Research Analyst.
Key players have been spending on research & development to come up with better quality and improved accuracy in pattern detection. These enhancements will drive demand for AI-based AML solutions in the medium- to long-term forecast period.
These insights are based on a report on AI-Based Anti-Money Laundering (AML) Solutions Market by Fact.MR.