The capital markets industry will increase its spending 8.5 percent a year on technology that combats financial crimes, through 2015.
This will account for 5.1 percent of total spending by financial firms on managing risks, according to an IDC MarketScape report from IDC Financial Insights.
In 2010, the financial industry as a whole spent $2.9 billion on hardware, software and services fighting financial crimes, IDC said. At a compound average growth rate of 8.3%, that will reach $4.3 billion in 2015. And would stand at $3.1 billion for 2011 and $3.4 billion in 2012.
Financial crimes management technology includes products that anticipate, detect, analyze, and prevent fraudulent transactions, money laundering, and employee financial misconduct through the use of decision trees, neural networks, predictive scoring models, network link analysis, scenario matching, data mining, case management, and entity and device profiling.
Competitors include hardware and software suppliers such as ACI Worldwide, BAE Systems, FICO, Fidelity National Insurance Services , Fiserv, IBM, Memento, NICE Actimize, Oracle, and SAS, according to IDC.
"Strategies and investments for managing financial crime must continue as a number 1 priority for risk and compliance executives in all financial sectors," says Michael Versace, IDC Financial Insights research director. " Whether driven by the increased awareness of terrorist financing post 9/11, the increased insensitivity to fraud activities from outside and inside the financial enterprise, or the reduced tolerance for loss and the need to modernize legacy platforms to incorporate the latest in intelligence, analytics, and workflow, financial crimes management is a line item that cannot afford to be reduced for the foreseeable future given these trends."
Tom Steinert-Threlkeld writes for Securities Technology Monitor.