The global market for financial crime risk management technology is projected to hit $3.75 billion by 2012, at a compound annual growth rate of 13.1 percent, according to the “Financial Crimes Risk Management Systems 2009” report by Chartis Research. The report has also named SAS, the leading provider of business intelligence and analytical software and services, as among the three global leaders in financial crime risk management technology. At present, many major local and international banks, and financial institutions in the Middle East are using SAS' fraud, risk management and anti-money laundering technologies, including Riyad Bank and Hong Kong Shanghai Banking Corporation (HSBC), among others. Amid issues in liquidity that are being faced by the financial sector in the Middle East, it is crucial for financial institutions and banks to be equipped with fraud, risk management and anti-money laundering technologies to combat any sort of fraud or crime. Chartis forecast that the current global recession is likely to increase the frequency of internal fraud, security breaches and false accounting. There is very little doubt that financial institutions have to be on their guard to at least maintain the status quo, let alone deal with the crime that is taking place Fraud and money laundering are the two most common crimes seen within the financial services sector. Most firms have now placed financial crime and associated compliance requirements very highly on their corporate agenda. The key trend has been the adoption of a risk-based approach to managing fraud and money-laundering. This has led to policies, procedures and systems that proactively identify, alert, assess and monitor the risk of such events Another key driver in recent years has been the cost of losses from financial crime. This is still not formally measured by many financial institutions, but those that are actively quantifying the losses from fraud (including fraud losses that are hidden in the bad-debt and default numbers) have been able to formulate substantial cost-benefit cases for their investment proposals to improve anti-money laundering and anti-fraud processes and systems Despite the mission-critical nature of financial crime risk management systems, most financial institutions continue to have a silo-based point-solution approach. The norm is to have multiple anti- fraud and anti-money laundering systems, across different business units, communication channels and using multiple databases. This creates extra expense, inefficiencies and data quality issues across enterprises. Furthermore, it inhibits a firm?s ability to create the links and intelligence required to combat the most sophisticated criminals Chartis recommends and predicts that best-practice enterprise-wide financial crime management processes and technology will be based on the establishment of a single-integrated platform, utilising common technology components and data-models, while eliminating gaps, duplication and inefficiencies. The technology platform needs to cater for all types of crime and allocate functionality for real-time/on-line as well as static/off-line data analysis. Ultimately, the financial crime platform will be a sub-set of an enterprise-risk management system providing a total risk dashboard for all key decision makers The overall vendor landscape has developed from several different directions. Some vendors have entered this space from a transaction monitoring perspective – e.g. Norkom, SAS, Mantas, Fortent, and NetEconomy. Others have focused on point of interaction – e.g. Experian and Equifax. Some vendors have developed from specific innovative technologies for one ore more specific types of financial crime – e.g. ID Analytics for identity theft and CyberSource for on-line fraud. The overall market space is now experiencing convergence of the different solutions and technologies. Forward-looking vendors have seized the opportunity to identify the common functional components (e.g. case management, risk analytics, reporting) and established clear strategies for a component
