Insurers and other financial institutions are now spending about $5 billion per year on anti-money laundering efforts, according to analysts at Celent.
Celent, Boston, has found that spending on anti-money laundering (AML) efforts is steadily rising as financial institutions, including insurers, must fight an ever-widening battle to keep fraud and money laundering in check, the analysts say.
About $3.8 billion of the annual spending goes toward operations, and $1.2 billion toward AML technology.
About $458 million of the AML technology spending pays for AML software.
World AML software spending could rise about 10% per year, to become a $557 million expenditure by 2013, the analysts say.
Although regulatory requirements were the most commonly cited driver behind AML spending (42%), reputational risk and brand protection was also widely cited (25%).