Liminal: The AML Transaction Monitoring Market is Expected to Grow from $3.6B in 2024 to $6.8B by 2028, at a 17.5% CAGR

Liminal Forecasts $6.8 Billion Global Market for Anti-Money Laundering Transaction Monitoring Solutions by 2028, Amidst Rising Financial Crime and Compliance Challenges

Financial institutions face escalating pressure to adhere to complex global regulations and detect sophisticated money laundering activities. This complexity and the increased risk of non-compliance penalties boost the demand for effective Anti-Money Laundering (AML) technologies, which are crucial for identifying and reporting suspicious activities. Liminal’s research forecasts that the total addressable market for AML transaction monitoring solutions will expand from $3.6 billion in 2024 to $6.8 billion by 2028 at a compound annual growth rate of 17.5%. This growth underscores the rising demand for effective AML solutions and the market’s readiness for innovative approaches.

Liminal Market and Buyer’s Guide to Anti-Money Laundering Transaction Monitoring in Financial Services

Liminal’s latest research, The Market and Buyer’s Guide to Anti-Money Laundering Transaction Monitoring for Financial Services, explores the market dynamics and buyer needs for advanced AML transaction monitoring solutions. A survey of technology buyers in financial services across five regions globally reveals a unanimous agreement: AML transaction monitoring is not just a regulatory checkbox but a critical line of defense against financial crime.

Liminal’s President, Jennie Berry, comments, “As the AML landscape evolves, financial institutions must adapt to meet the dual challenges of regulatory compliance and technological advancement. The future will see AI and ML play a pivotal role in this arena, emphasizing integrated solutions that offer both efficiency and effectiveness.”

The study highlights a significant shift towards AI and machine learning (AI/ML) in AML transaction monitoring, with 78% of buyers employing these technologies. AI/ML enables quicker risk detection and evolves through self-learning capabilities. However, successful integration demands close collaboration with data science teams, addressing challenges like validation, explainability, and bias.

Despite technological advancements, AML systems often generate false positives, necessitating costly manual reviews. Approximately 44% of flagged transactions are false positives, leading to operational inefficiencies. This challenge underscores the need for more sophisticated solutions that balance operational efficiency with compliance.

Buyers also express a strong preference for broader industry collaboration and information sharing. 74% of European buyers advocate for industry-wide data-sharing initiatives to enhance AML compliance, emphasizing the need for more comprehensive customer profiles and robust compliance strategies.

Financial institutions face intensifying pressure to adhere to complex global regulations and combat sophisticated money laundering. The AML transaction monitoring market is transforming, driven by technological advances and regulatory requirements. This shift marks significant growth and change, with institutions increasingly adopting advanced solutions to meet these challenges. Liminal’s Market and Buyer’s Guide for Anti-Money Laundering Transaction Monitoring provides valuable insights into market trends, buyer views, and notable vendors, making it an essential tool for exploring and adopting advanced AML solutions.

About Liminal

Liminal is a global market intelligence and strategic advisory firm specializing in digital identity, financial crime and compliance, and IT security technology solutions across industries while catering to the private equity and venture capital community. Founded in 2016, Liminal offers strategic and analytical services supporting executive decision-making at all product and business lifecycle stages. We advise some of the world’s most prominent business leaders, investors, and policymakers on building, acquiring, and investing in the next generation of solutions and technologies. We provide access to proprietary data and analysis, strategic frameworks, and integrated insights on the industry’s only market intelligence platform.

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Published by Liminal on 16 Jan, 2024