My latest IDC MarketScapes assess 2018 worldwide anti-money laundering (AML) and know-your-customer (KYC) vendors providing solutions in financial services to the worldwide banking market. This research quantitatively and qualitatively assesses multiple characteristics that help explain a vendor's success and position in the marketplace relative to the vendor's peers.
These IDC MarketScapes cover vendors that provide AML and KYC solutions in financial services to the worldwide banking market. The evaluations are based on a standardized set of parameters from which IDC can produce comparative analyses of AML and KYC solution vendors in financial services. The technology vendors provided an in-depth assessment of their current capabilities and strategies, and their reference clients were interviewed to assess the vendor's ability to meet the financial institution's (FI's) strategic needs and current requirements. For the purposes of this document, IDC defined AML solutions to include solutions that provide financial institutions the capability to monitor their customers' transaction to identify suspicious activity, generate alerts, and facilitate the investigation of those alerts. IDC defines KYC as inclusive of complete customer onboarding including customer identification, customer due diligence (CDD) (including beneficial owner), enhanced customer due diligence, watchlist/sanction screening, and ongoing customer risk-based assessments.
Key findings from this research include:
- Artificial intelligence (AI) and machine learning (ML) are becoming increasingly important to AML and KYC efficacy. Savvy providers have embedded AI/ML into road maps to assist financial institutions with the tuning of their models, helping improve accuracy of alerts and screening capabilities.
- Vendors are increasingly using natural language processing and generation to produce regulatory reports, enabling investigators to be more efficient.
- Advanced analytics in KYC that incorporate AI/ML significantly improve the KYC screening process, resulting in potentially better outcome prediction accuracy.
- There are clear benefits in choosing a provider that provides end-to-end AML and know-your customer (KYC) solutions on a shared or unified platform.
- Buyer references placed importance on customer service in terms of the vendors' ability to address technical concerns in a timely manner, as well as transparency and ability to keep pace with regulatory requirements in the product enhancement, update and strategic directions.
Financial institutions must be able to adapt to increasing regulatory pressure and examine expectations around the efficacy of their AML and KYC programs apply better risk-based analytics. These studies highlight 11 AML and 16 KYC vendors that all provide substantial AML/KYC capabilities.
Reports referenced: IDC MarketScape: Worldwide Anti-Money Laundering Solutions in Financial Services 2018 Vendor Assessment (Doc) and IDC MarketScape: Worldwide Know-Your-Customer Solutions in Financial Services 2018 Vendor Assessment (Doc ).