Transaction Monitoring Market Snapshot (2023 to 2033)
According to estimates, the global market for transaction monitoring was worth US$ 8.4 billion in 2022 and will reach US$ 9.01 billion in 2023. The market for transaction monitoring is expected to reach US$ 34 billion in 2033, with a CAGR of 14.2% from 2023 to 2033.
With the increasing digitization and the increasing use of online payment methods, a market for transaction monitoring in the financial sector has emerged. Globally, it is expected that SMBs will hold the largest market share, with 33%, of the global market during the next three years.
The market growth is likely to be supported by:
Growing digitalization
Increased e-commerce transactions
Convenient and secure transaction
Banking on tips is on the rise
Compliant cross-border transactions
Prevents fraud and eliminates the risk
Track and analyze financial transactions in real-time
Detects and alerts potential fraud
Helps financial institutions comply with AML regulation
An in-depth look at customer behavior and transactions
Analyze potential financial crimes and investigate them
Business-specific tailor-made solutions
Detects suspicious activities like large cash deposits
Data Points
Key Statistics
Estimated Base Year Value (2022)
US$ 8.4 billion
Expected Market Value (2023)
US$ 9.01 billion
Anticipated Forecast Value (2033)
US$ 34 billion
Projected Growth Rate (2023 to 2033)
14.2% CAGR
Compliance with anti-money laundering (AML) regulations has become increasingly dependent on transaction monitoring in recent years. To identify suspicious activities and report them to the relevant authorities, financial institutes are increasingly monitoring transactions. As a means of ensuring financial institutions comply with AML regulations, specialized software, and services have been developed.
Artificial intelligence and machine learning will eventually benefit the market. Technology like this provides a higher level of security and protects sensitive information. Through advanced analytics, transaction monitoring technology will be protected against preventable hazards, leading to a boost in its international reputation.
Regulatory compliance and money laundering prevention have become crucial aspects of monitoring in fintech and net banking. Detecting potential financial crimes can be achieved with real-time transaction monitoring. According to Finbold, fines for ignoring AML, KYC, and data privacy rules in 2020 totaled €12 billion. It is expected that regulations will only become more restrictive and periodic reviews will become obsolete over time. To remain competitive, it is necessary to monitor all transactions in real time. The technology can also be used to fight terrorist financing, theft of identities, fraud, drug trafficking, bribery, corruption, and extortion.
For instance, Zone (formerly Appzone), A top provider of AI-powered transaction monitoring technology, ThetaRay, and Zone, Africa's first regulated layer-1 blockchain for payments, announced a partnership to use ThetaRay's cloud-based SONAR solution to verify Zone's Nigerian transactions to detect sanctions violations and illicit activities.
According to analysts, transaction monitoring is the most profitable market in North America. Increasing e-commerce business and the presence of key banking systems in these regions are driving the United States demand for transaction monitoring systems.
Growing populations and the increasing demand for online banking in developing economies such as India and China are expected to fuel the market's growth. In addition to preventing data breaches, KYC regulations and standards ensure secure market transactions in this region.
Businesses are increasingly relying on advanced analytics to monitor client transactions proactively. By detecting transactions that are potentially dangerous or may lead to cyber fraud, KYT ensures that market statistics regarding transactions are improved.
Growing demand for online shopping coupled with the growth of transaction monitoring systems is predicted to propel retail and manufacturing industries to grow exponentially in the future.
Businesses with limited resources can utilize SaaS-based security services to protect their business applications on a cloud-based platform. The expansion of digital banking systems and online services has all grown market for the transmission monitoring market.
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Transaction Monitoring Market Overview
Transaction monitoring solutions can be utilized to analyze the plausibility of all transactions. It offers various benefits such as secure business applications, analysis of business cases regarding plausibility, the flexible and transparent configuration of rules, and analysis of business cases and risk management systems, among others.
Transaction monitoring market value is expected to reach US$ 25 Bn by 2031, at a CAGR of 15% during the forecast period 2021 to 2031.
What is Driving Demand for Transaction Monitoring?
Transaction monitoring solutions provide a wide range of applications such as anti-money laundering, customer identity management, fraud detection and prevention, and compliance management.
There is continuous development and implementation of new technology such as artificial intelligence (AI), Internet of Things (IOT), and robotic process automation (RPA) which holds considerable promise for overcoming money laundering, terrorist financing, fraud, market abuse, or trade misconduct. This is creating new growth opportunities for transaction monitoring solutions, in the coming years.
The market is projected to witness significant growth during the forecast period, due to several factors such as the need to manage organizational KYC compliance, use of progressive analytics to offers proactive risk alerts and mitigate money laundering, and Counter-Terrorist Financing (CTF) activities.
The solutions offers different features such as real-time transaction monitoring, detection of the unusual flow of funds over a period, identify suspicious behavior, historical profiling, account level, and minimize unnecessary alerts by tailoring scenarios and others.
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What is the impact of COVID-19 Pandemic Outbreak on Adoption of Transaction Monitoring?
The current COVID-19 pandemic has created different challenges for the authorities in charge of financing terrorism and money laundering (FT/ML). As usual, all the companies must strive for the prevention and detection of these risks promptly and carry out an analysis of the new risks derived from the COVID-19 crisis.
The growing need for monitoring customer transactions including assessing historical/current customer interactions and information to enable a complete image of customer activity is expected to propel transaction monitoring solution demand over the coming years. During the COVID-19 response, the transaction monitoring system is used for different industries to secure from money laundering and suspicious transactions activities.
The USA and Canada Transaction Monitoring Outlook
The USA is the largest market for transaction monitoring, owing to the strong presence of transaction monitoring software and service provider, and the increasing adoption of digital technologies in the USA region. The USA transaction monitoring market is set to tread on the historic pattern of bust and boom during the assessment period 2021 to 2031.
Demand is likely to remain muted in the next couple of years, as several end-use industries make a gradual recovery.
Moreover, increasing emphasis on regulating the USA government regarding money laundering, and terrorist financing activities, and fraud protection, is also expected to drive the USA market. The USA and Canada-based transaction monitoring providers focus on offering cost-effective cloud-based solutions across the North American market.
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South Asia & Pacific Demand Outlook for Transaction Monitoring
The adoption of a transaction monitoring solution is expected to rise considerably across small- and medium-sized enterprises in South Asia & the Pacific region.
Also, enterprises in South Asian countries are demanding efficient systems, such as anti-money laundering software solutions to handle AML compliance at financial institutions and other firms, which is creating new growth opportunities for transaction monitoring in South Asia and the Pacific region.
The financial industry is projected to show sustainable growth due to investments by multinational players such as BAE Systems, and Software AG, among others, in the country, and government initiatives to support the growth of the BFSI industry. Demand for transaction monitoring solutions is increasing in emerging countries like India, Indonesia, Malaysia and others, as they provide proactive security measures for preventing data breaches.
Who are the Key Providers of Transaction Monitoring?
Some of the leading providers of Transaction Monitoring include
Oracle Corporation
FICO
Fiserv, Inc.
BAE Systems
Software AG
SAS
Experian plc
FIS
Infrasoft Technologies
Others.
Market participants are adopting the product diversification strategy to enhance their market presence. Moreover, emerging companies are significantly investing in new product development. For instance, ACAMS launched new transaction monitoring certification for compliance professionals.
This certification sets a new global standard for compliance staff tasked with investigating, reviewing, and escalating the transactional alerts that is potentially lead to the filing of suspicious activity reports.
The report is a compilation of first-hand information, qualitative and quantitative assessment by industry analysts, inputs from industry experts and industry participants across the value chain. The report provides in-depth analysis of parent market trends, macro-economic indicators and governing factors along with market attractiveness as per segments.
The report also maps the qualitative impact of various market factors on market segments and geographies.
