Celent's anti-money laundering vendor report: 2009 update

Celent's anti-money laundering vendor report: 2009 update
Celent’s AML vendor evaluation reports have become something of a de facto standard, referenced by financial institutions and regulators around the world. We began covering the sector in 2003, and are about to start work on our 3rd edition of the report. Although initially the insurance industry was not seen as a high-risk area for AML, in recent years AML has grown as a concern for insurers and regulators. The behavior detection technology that underpins AML software has also expanded its boundaries within the financial institution. Celent has been behind the “enterprise risk” approach, that is, consolidating AML and anti-fraud efforts, since our first AML report back in 2002. But until the last few years there were few real-life examples to point to. Recently, however, financial institutions have become increasingly concerned with fighting fraud, including fraud committed by customers as well as employee fraud. And a growing number of firms are beginning to take a wholistic approach to these issues. So this time around our report will take an enterprise risk approach as well, by including in our evaluation the anti-fraud products of the AML vendors. We’re calling it “Evaluating the Vendors of Enterprise Risk Management Solutions 2009.” We’ll be starting research on the report this month, beginning with qualifying vendors for inclusion in the report. The last edition evaluated 19 vendors and was 100 pages long. As the market has shifted, with new products emerging and others fading from sight, there may be some shuffling in order to keep the field of vendors representative of the marketplace. And although we are constantly looking at this space, we’d welcome any comments on vendors we should consider that we may have missed. As a reminder, the AML software providers evaluated in the 2006 edition of the report were: Accuity, Ace Software Solutions, ACI Worldwide, Actimize, ChoicePoint/Bridger Insight, Experian/Americas Software, Fortent/Searchspace, FircoSoft, LogicaCMG, Mantas, Metavante/Prime Associates, Fiserv/NetEconomy, Norkom Technologies, Northland Solutions, SAS Institute, Side International, STB Systems, Top Systems, Wolters Kluwer Financial Services/PCi

Japanese Insurers Poised for Technology (r)evolution

Japanese Insurers Poised for Technology (r)evolution

In Japan, Internet banking and online brokerage have been around for some time. The Internet revolution is taking a bit longer to come to the Japanese insurance industry. Currently, most insurers’ web sites are limited to providing information and some online tools, such as premium calculators or financial planning simulators. Customers who want to actually buy some insurance are directed to call a contact center, which will then mail application materials to the customer. In 2008, though, two firms–SBI AXA Life Insurance, a joint venture between Softbank Investment and AXA; and Lifenet Insurance, a greenfield firm– began to offer fully online insurance sales for the first time in Japan.

But for the most part, the insurance industry here has yet to realize the benefits of Internet-era communications in reducing processing cycles, supporting agents, or improving customer service. Here and there some new technologies have been adopted—some firms have built basic agent extranets and offer some online policy and claims information to their customers. The basic building blocks for a more integrated insurance infrastructure, however, are not in place. SOA is in its infancy in Japan, and the use of standards is limited. “Business intelligence” software generally takes the form of embedded Excel spreadsheets used by analysts and underwriters in lieu of more efficient assisted workflow solutions.

Change is on the horizon, however. Japanese insurers have seen foreign entrants succeed in taking large chunks of their market share, particularly in new product areas like retirement and health products. This has focused their attention on some of the techniques used by the foreign entrants, such as the BI used to support direct marketing, and more flexible core systems.

Due to a long-term trend towards declining market size—a result of the country’s shrinking population–Japanese insurers are also under intense pressure to reduce costs. This is driving even large domestic insurers for the first time to consider international vendor solutions and even outsourcing. As insurers move towards more modern, flexible PAS and claims systems, they will look to update their infrastructures, introducing more remote channel capabilities for their salesforce and agents as well as their customers. We expect the technology landscape at Japanese insurers will be transformed steadily, and in the end significantly, over the next few years.