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Transaction Monitoring Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

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  • 120 Pages
  • April 2023
  • Region: Global
  • Mordor Intelligence
  • ID: 5026090

Quick Summary:

In the increasingly digital world, adequate security measures for online transactions have become a business necessity. The transaction monitoring market is a thriving industry that offers solutions to this pressing need. Transaction monitoring not only manages, inspects, and analyzes completed business transactions but also acts as a protective shield for critical customer data.

With global financial regulators emphasizing its legality and necessity, transaction monitoring is seeing rapid advancements. The industry is being propelled by the utilization of cutting-edge technologies such as machine learning and artificial intelligence, which significantly bolster security measures. Moreover, the growing trend of e-commerce, requiring secure payment gateways and compliance to stringent online business laws, is driving the growth of this market. Additionally, the opportunity that has emerged for SMEs due to increasing data protection regulations highlights the immense potential and scope the transaction monitoring market holds. Purchase our transaction monitoring market report to gain comprehensive insights into this booming industry.

The transaction monitoring market is expected to register a CAGR of 15.1% during the forecast period. Transaction monitoring is the management, inspection, and analysis of a completed transaction on a business application or information system. Companies use transaction monitoring to effectively and efficiently manage diverse customer transactions.

Key Highlights

  • Transaction monitoring data is primarily used to submit Suspicious Activity Reports (SARs) and other reporting duties in compliance with several AML and counter-terrorist financing (CTF) regulations. Financial regulators worldwide are beginning to make transaction monitoring a legal necessity.
  • Machine learning and artificial intelligence will ultimately be beneficial for the market. Such cutting-edge technologies provide a higher level of security and protect the user's sensitive information. Advanced analytics offers protection and safety against preventative hazards; as a result, this will boost the reputation of transaction monitoring technology internationally.
  • Businesses conducting e-commerce must use secure payment gateways and adhere to the most recent and stringent laws and guidelines for conducting business and receiving payments online. This is a crucial aspect influencing the transaction monitoring market's growth rates.
  • The SMEs category is anticipated to grow more quickly throughout the projection period due to increasing data protection regulations and a lack of expensive security solutions within the payment network infrastructure.
  • The expansion of the transaction monitoring market needs to be improved by the need for more trained and skilled IT workers and the growing difficulty of maintaining cross-border compliance.

As more people purchase online using credit cards and other online payment methods, increasing the opportunity for hackers to act, the outbreak of COVID-19 was a significant factor in the decline in the growth of the transaction monitoring industry.

Transaction Monitoring Market Trends

Service to Witness the Growth

  • In the rapidly evolving digital landscape, digital transaction management has become an increasingly adopted software solution. Cloud-based software solutions are increasingly being used to digitally monitor and manage many customer transaction processes involving transfers, deposits, and withdrawals.
  • It is projected that digital transaction monitoring solutions will hold a sizeable market share during the forecast period. Digital transaction monitoring solutions have arisen from these ground-breaking cloud services, primarily designed to track document-based customer-based transactions.
  • Financial institutions' efficiency has grown due to the development of cloud computing technology and anti-money laundering (AML) solutions, which have also allowed them to cut the cost of developing an IT infrastructure.
  • For companies with limited resources for security measures, the cloud-based platform offers a single way to secure business applications in the form of SaaS-based security services. The retail and manufacturing industries have benefited from the deployment of transaction monitoring systems due to the rise in online buying patterns.
  • Additionally, technological developments help transaction monitoring and screening processes succeed better. Since analysts spend over 80% of their time acquiring data rather than resolving problems, there are new methods to speed up the information-gathering process. Advanced analytics, machine learning, and artificial intelligence (AI) are improving. The use of technology to speed up KYC onboarding, examine behavioral trends, and verify identification is also emphasized.
  • The presence of well-diversified players characterizes the market. These vendors consistently provide innovative solutions in line with the advancement in technologies that cater to customers' increasing needs across various end-user industry verticals.

North American Accounts to Hold Significant Market Share

  • The North American region now generates the most revenue from the transaction monitoring business. This is because the United States and the rest of the North American region currently account for most global e-commerce transactions.
  • The two remaining North American countries, Mexico and Canada, follow the United States in terms of market revenue generation. The governments of Mexico, Canada, and the United States are enacting Know Your Customer (KYC) rules and regulations as e-commerce grows in popularity in this region.
  • These regulations are meant to minimize credit card fraud and money laundering. They also have systems that are intended to stop both actions from happening as often as feasible.
  • Regulations and standards governing KYC are also intended to prevent as much funding as possible for terrorist organizations. Because of this, advanced analytics are frequently included in these laws and regulations.
  • These cutting-edge analytics are intended to notify credit card firms of probable credit card fraud or terrorist financing activities either at the time they take place (preferably before they do) or, at the least, shortly after. The North American market growth is anticipated to be fueled by all of these factors.

Transaction Monitoring Market Competitor Analysis

The transaction monitoring market is fragmented in nature, and the major players have employed various methods, including introducing new products, expansions, mergers, and acquisitions, among others, which may result in the emergence of a highly competitive market.

In September 2022, FICO announced and granted eleven new patents related to fraud, artificial intelligence (AI)/machine learning (ML), and digital decisioning. The latest 11 patents focus on various software solutions, fraud analytics, and enhanced machine learning algorithms to help its customers build responsible and effective AI decisioning systems leveraging purpose-built AI and ML algorithms.

Additional benefits of purchasing the report:

  • The market estimate (ME) sheet in Excel format
  • 3 months of analyst support

This product will be delivered within 2 business days.

Table of Contents

1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Bargaining Power of Suppliers
4.2.2 Bargaining Power of Consumers
4.2.3 Threat of New Entrants
4.2.4 Intensity of Competitive Rivalry
4.2.5 Threat of Substitute Products
4.3 Assessment of Impact of COVID-19 on the Industry
5.1 Market Overview
5.2 Market Drivers
5.2.1 Advancement in Transaction Monitoring Solution incorporating AI and ML
5.2.2 Increasing Stringent Regulatory Compliance
5.3 Market Restraints
5.3.1 High Percentage of False Positives with Current Software Solutions
5.4 Overview of Information-Sharing Structures across regions (US - 314(b), UK - Joint Money Laundering Intelligence Taskforce (JMLIT), etc.)
5.5 Technology Enablers for More Effective Information Sharing (Including initiatives and approaches of vendors such as Verafin, Fintel, etc.)
6.1 Component
6.1.1 Solutions
6.1.2 Services
6.2 Geography
6.2.1 North America
6.2.2 Europe
6.2.3 Asia-Pacific
6.2.4 Latin America
6.2.5 Middle-East and Africa
7.1 Company Profiles
7.1.1 Fair Isaac Corporation (FICO)
7.1.2 SAS Institute Inc.
7.1.3 Oracle Corporation
7.1.4 Protiviti Inc.
7.1.5 IBM Corporation
7.1.6 Fidelity National Information Services Inc. (FIS)
7.1.7 BAE Systems PLC
7.1.8 Infrasoft Technologies
7.1.9 Beam Solutions Inc.
7.1.10 Experian PLC
7.1.11 ACTICO GmbH

Companies Mentioned

A selection of companies mentioned in this report includes:

  • Fair Isaac Corporation (FICO)
  • SAS Institute Inc.
  • Oracle Corporation
  • Protiviti Inc.
  • IBM Corporation
  • Fidelity National Information Services Inc. (FIS)
  • BAE Systems PLC
  • Infrasoft Technologies
  • Beam Solutions Inc.
  • Experian PLC