This report provides an independent evaluation and description of Oracle’s leading practices and competitive position. Our analysis is based on information in the Chartis report Financial Crime Risk Management Systems: Market Update 2017, and the RiskTech Quadrants® for enterprise fraud technology solutions, Anti-Money Laundering (AML) solutions, Know Your Customer (KYC) systems, watchlist monitoring solutions and trader surveillance systems.
The report also includes brief coverage of:
- The main demand-side trends in this market, with an analysis of the key business and regulatory challenges.
- The supply-side dynamics, with a focus on the vendor landscape.
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 becomes 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 the best use of them, FIs must match them to appropriate use cases, and employ suitability analysis, backtesting 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.