Global spending on Anti-Money Laundering (AML)/Know-Your-Customer (KYC) data and services continued its growth trajectory, with total revenues for the industry estimated at $904.6 million in 2019, a 17.5% increase from 2018 and bringing the 5-year CAGR for the industry to 17.0%. AML/KYC spending is riding the wave of regulatory attention on the banking industry that is increasingly focusing on restricting global capital flows into and out of bad actor countries and between politically exposed persons. The demand for faster access to AML/KYC reports and data is forcing traditional vendors to both invest in technology to enhance existing products as well as to enter more strategic partnerships as they face rising competition from smaller, more nimble vendors that are leveraging technology to address emerging demand.
Refinitiv remained as the largest provider of AML/KYC data and services in 2019 with total revenues estimated at USD272.4 million for the year and accounting for 30.1% of total industry revenues. Dow Jones was the second largest provider of AML/KYC services, followed by LexisNexis Risk Solutions and Bureau van Dyk. Smaller firms, such as Vital4 and Kompli-Global, are aggressively expanding their footprint in the AML/KYC industry with revenue for these providers included in the “other” category below increasing by 25.0% over 2018.
The main strategic differentiators among vendors is similar to last year, revolving around the degree of automation of solutions and the range of areas that the providers choose to address themselves, rather than partnering with an outside provider. For example, Regulatory DataCorp is expanding its focus beyond end-to-end provision of its proprietary risk database to leverage its vast archive of risk-based decisions with a view to improving automation of client decision-making. Refinitiv and Dow Jones Risk & Compliance both integrated Dun & Bradstreet’s beneficial ownership data into their product offerings in 2019. While new entrant, Kharon, focuses on managing the risk of exposure to sanctions networks and jurisdictions using data sourced by both analyst and advanced technology.
While AML/KYC providers use different approaches to their content and delivery, all have strategies designed to automate and streamline workflows for clients. Burton-Taylor expects demand for AML/KYC products and services shows little sign of slowing down and is only expected to expand. Consolidation is also expected to accelerate, as providers work to meet the demands of their evolving clientele and deliver tools that meet regulatory demand for increased transparency within the financial industry.
2019 Anti-Money Laundering (AML)/Know-Your-Customer (KYC) Study
The Anti-Money Laundering/Know-Your-Customer Data and Services Vendor Landscape 2019 report provides market positioning profiles for key providers of AML/KYC data and information and related services, with a focus on data coverage, screening and due diligence capabilities. The profiles include their main capabilities, an update on recent and planned developments and information on their market positioning and competitive differentiation.
The supplementary Anti-Money Laundering/Know-Your-Customer Data and Services Global Share 2019 analysis allows service providers and buyers to compare the performance of AML/KYC data and information suppliers in recent years in a consistent manner to assess relative growth rates, as well as changes in market share and shape over time.
Jennifer Milton is an Analyst at Burton-Taylor International Consulting, part of TP ICAP group, where she is responsible for research, analysis and report generation covering Financial Market Data/Analysis Providers and Anti-Money Laundering/Know Your Customer Data & Information Vendors.