Emerging Solutions in Anti-Money Laundering Technology

by Arin Ray, May 1, 2015
Vendor Reviews
Global

Abstract

Continuously evolving regulations, coupled with recent instances of money laundering rule violations by some of the largest financial institutions, have highlighted the need for better technology in managing AML operations. The explosion of the digital universe has brought new challenges, requiring banks to scan through a host of sources beyond regulatory and official lists.

In the report Emerging Solutions in Anti-Money Laundering Technology, Celent discusses a number of innovative solutions in the AML / Know Your Customer (KYC) space. Faced with pressures from growing compliance requirements and the need to cut costs, financial institutions are seeking to use technology to increase efficiency and free up resources. The need to ensure enterprisewide compliance is giving rise to centralization and standardization of AML operations, and integration of AML and anti-fraud programs. To capitalize on these trends, solutions are emerging to address complete client lifecycle management functions across different lines of business. In particular, the KYC function is receiving a lot of attention from both banks and service providers.

Risk and compliance is an area that financial institutions have traditionally wanted to keep in-house. However, the delivery model for AML solutions is poised for evolution. As financial institutions show more openness to using outsourced and managed service solutions, this area is witnessing the emergence of new solutions.

“Solutions are being developed that will parse large volumes of unstructured data from different sources with analysis capabilities that are not usually supported by rule-based methods followed by traditional AML software,” says Arin Ray, an analyst with Celent’s Securities & Investments practice and author of the report. “One issue that is still at an idea generation stage is cybersecurity. With growing instances of cyber fraud, it is likely that a few solutions will eventually enable financial institutions to strengthen and better manage their cyber security.”

This report, the fourth in a series of Celent reports covering the current state of the AML technology market, looks at some of the advanced technology issues by focusing on new and unique solutions that go beyond traditional end-to-end AML/anti-fraud solutions, and provides profiles of a variety of such solution providers. The other reports in the series are:

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 a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

1

Introduction

3

Vendor Profiles

6

 

Basis Technology: Language Analysis

6

 

Digital Reasoning: Natural Language Processing and Unstructured Data Analysis

10

 

Fenergo: Consolidated Data and Process Management for KYC, AML, and Regulatory Compliance

12

 

KYCnet: KYC as a Service and KYC Passport

15

 

Safe Banking Systems: Watchlist Analysis and Entity Resolution

17

 

smartKYC: Semantic Engine for KYC and AML Due Diligence

19

 

Thomson Reuters Screening Resolution Service: SaaS for Watchlist Screening

22

Outlook

25

Leveraging Celent’s Expertise

27

 

Support for Financial Institutions

27

 

Support for Vendors

27

Related Celent Research

28

Sign in to download reports and access personalized information