Against a background of more financial crime and shifting regulatory pressures, two trends are increasingly shaping Financial Institutions’ (FIs’) Financial Crime Risk Management (FCRM) requirements:
- Greater volumes of regulatory reports, notably Suspicious Activity Reports (SARs).
- More complex relationships, involving correspondent banking, ultimate beneficial owners, and Open Application Programming Interface (API) banking.
Tackling these issues effectively will take the considered use of technology, people and process – all as budgets continue to tighten and financial crime gets more sophisticated. Several technologies are proving useful, but three in particular – platforms/databases, Artificial Intelligence (AI) and entity resolution – are emerging as key elements in the development of effective new FCRM systems. But while these are powerful tools, FIs must recognize both their pertinence and their limitations. To make best use of them, FIs must match them to appropriate use cases, and employ suitability analysis, back- testing and explicable methodologies.
The FCRM vendor landscape, meanwhile, is crowded, and several areas which have historically been stagnant – such as trader surveillance – are facing a significant level of disruption from new vendors, many of which are exploiting new technologies. And rather than attempting to offer multiple solutions, specialist vendors are enjoying considerable success by picking away at elements of the incumbents’ technology stacks, undermining the notion of a true enterprise-wide FCRM solution.
This report updates Financial Crime Risk Management Systems: Market Update 2016. It includes:
- A look at the main emerging trends in FCRM since our last report, and how these are affecting the overall narrative and landscape in this space.
- An analysis of how this is shaping FIs’ technology approaches and requirements, and how vendors of FCRM solutions are responding.
- Brief updates on the main categories of FCRM systems: anti-fraud, Anti-Money Laundering (AML), Know Your Customer (KYC), watchlist monitoring and – new to this report – trader surveillance.
The report uses Chartis’s RiskTech Quadrant® to explain the structure of the market. The RiskTech Quadrant® uses a comprehensive methodology of in-depth independent research and a clear scoring system to explain which technology solutions meet an organization’s needs. The RiskTech Quadrant® does not simply describe one technology solution as the best solution; it has a sophisticated ranking methodology to explain which solutions would be best for buyers, depending on their implementation strategies.
In this report we cover the leading vendors of FCRM systems, including: Accuity, ACI Worldwide, Ayasdi, BAE Systems, b-next, Booz Allen Hamilton, CustomerXPs, EastNets, Equiniti, Fenergo, FICO, FIS, Fiserv, IBM, IHS Markit, Innovative Systems, Kx, LexisNexis Risk Solutions, Nasdaq SMARTS, NICE Actimize, Oracle, Pega, Quantexa, RDC, RSA, Safe Banking Systems, SAS, Thomson Reuters and Wolters Kluwer.