Using Technology to Combat Financial Crime in Retail Banking (Strategic Focus)

Published by: Datamonitor

Published: Jan. 8, 2009 - 7 Pages

Table of Contents

Overview

Catalyst

Summary

Key Messages

Compliance remains high on banks' agendas, but banks need to focus on a risk-based approach

The evolving digital economy creates new money laundering and fraud threats

Banks need to focus on automation to increase the speed of processing, accuracy of detection and understanding of data

Growing costs are driving increased standardization of business processes

Vendors should align the positioning of their solutions with their clients' main hot-spots

Table of Contents

Table of figures

Table of tables

Market Opportunity

Introduction

Banks need to exploit the synergies between anti-fraud and anti-money laundering

Banks needs to address three major areas to combat financial crime

Banks need to comply with the growing amount of regulatory requirements

Banks need to focus on balancing rules- and risk-based approaches

The increasing burden of operational risk management

Banks are moving from a reactive to an intelligence-based, proactive approach

Evolution of the Anti-Financial Crime Discipline

The evolving digital economy creates new money laundering and fraud threats

Unregulated 'virtual world' transactions are an emerging challenge to combating financial crime

Customer data theft is an increasingly painful issue, due to the potential implications of ID theft

New windows of opportunity are opening for fraudsters during the current financial turmoil

Central and Eastern Europe and Central Africa have become epicenters of cyber-crime

Banks need to focus on automation to reduce error and increase deviation detection levels

Banks need to improve the accuracy of identifying financial crime events

Real time detection is an increasingly urgent requirement

Banks need to focus on data management to improve their ability to detect anomalies

Banks need to understand customer data to successfully implement their compliance and risk strategies

Growing costs are driving increased standardization of business processes

Banks need to balance accountability for risk and low-cost sourcing alternatives

Technology and Vendor Landscape

The sophistication of back and middle office technology is growing

Front office monitoring solutions have proliferated in response to demand

The market is still fragmented due to its immaturity

User-friendly AML and anti-fraud management tools increase workflow efficiency

Real-time detection capability enhances successful prevention

An increasingly cost-driven market drives adoption of a hosted delivery model

Go to Market

Vendors should align the positioning of their solutions with their clients' main hot-spots

Banks are seeking end-to-end solutions across financial crime types and investigation chains

MISs are forecast as one of the fastest growing areas of technology expenditure

APPENDIX

Definitions

Methodology

Further reading

Ask the analyst

Datamonitor consulting

Disclaimer

List of Tables

Table 1: Regulatory driversmajor implications

Table 2: Major industry associations or government agencies

Table 3: New payment methodsmoney laundering and terrorist financing risks

List of Figures

Figure 1: Which three financial crimes do you consider the highest priority to address?

Figure 2: Rules-based approach vs. risk-based approach

Figure 3: Evolution of financial crime detection and prevention management

Figure 4: Which areas of regulatory compliance will be driving IT project spending in 2009?

Figure 5: Worldwide monitoring and management of risk and compliance key figures

Figure 6: Overall AML and anti-fraud technology architecture

Figure 7: Analysis of payment flows

Figure 8: The anti-financial crime vendor offering landscape

Figure 9: Graphical user interfaceexample of a fraud analyst dashboard

Figure 10: Please rate the importance of the following objectives to your IT investment strategy in 2009

Figure 11: What are your organization's top three priorities when investing in anti-money laundering (AML) and anti-fraud solutions? (Rank top three in order of priority)

Figure 12: Retail banking technology spending by business function globally

Abstract

• The report looks at the regulatory requirements and growing exposure to risk that drive the adoption of anti-financial crime application and strategies
• It provides insight into potentially emerging threats, and the increasing cost pressures that affect the anti-financial crime area
• The technology and vendor landscape section offers an in-depth insight into the overall AML and anti-fraud architecture
• The go-to-market section provides the necessary intelligence for vendors to formulate their marketing strategy

• Gain insight into the challenges faced by retail banks seeking to develop their anti-financial crime practice.
• Understand the technological evolution of anti-financial crime solutions and vendor offering landscape
• Gauge how market conditions are shaping the development trajectory of the anti-financial crime discipline

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