Anti-financial crime practice at SAS Institute flourishes

OVUM VIEW

Summary

The Anti-Financial Crime practice, which includes anti-fraud and anti-money laundering (AML) solutions, is the golden goose at SAS Institute these days. Over the last year, revenues from this practice have increased globally by 175%, while the anti-financial crime software solution market overall is growing at between 15% and 20% annually. This is a significant out-performance that indicates that the vendor has become a key solution provider of packaged anti-financial crime solutions. In addition, heavy investment in R&D, combined with the culture of developing new solutions with key clients, will further contribute to sound development of the practice at SAS Institute.

Anti-Financial Crime solution suite drives sales growth

The Anti-Financial Crime practice at SAS Institute is flourishing. It is the highest growing solution area at SAS in the Americas, and fourth in other geographies, although it is important to note that the base is smaller when compared to other key product areas at SAS. In addition, the practice is the key segment by sales value in the Americas, just behind core products including Analytics, Data Management, and Foundation. The company is one of only a few vendors that leverage anti-financial crime solutions across several industries, and this also puts SAS in a unique position for growth. In the Americas, anti-financial crime solutions represent the top SAS product sales to federal, state, and local governments, financial services, and health life sciences.

SAS Institute’s solutions are based on a well-known and respected horizontal data and analytics platform on which the anti-financial crime requirements are built. The vendor creates bespoke solutions in conjunction with clients on top of these, which it then productizes for the broader market. This incorporates a lot of real-life business process and domain expertise, which in a non-competitive area such as compliance is highly valuable for other institutions. The level of embedded out-of-the-box functionality has improved significantly over the past few years since the first release in 2000, and it is now considered a mature enterprise-wide solution addressing both anti-fraud and AML requirements (detailed information can be find in the Ovum report “Selecting an Anti–Financial Crime Solution in Retail Banking”, October 2011). The enterprise audience clearly digested the solutions on offer, with the sales numbers proof of this. The platform is especially useful for larger institutions that require a high level of customization and control over risk models. Ovum believes that the vendor, with a significant research and development spend, has a sound foundation for further expansion, and the solution area will continue to grow at a high rate.

The goal is to increase out-of-the box functionality

Ovum, in its Solution Guide, recommends that retail banks should shortlist the SAS solution when evaluating anti-financial crime platforms. Nonetheless, the world constantly changes and the product roadmap is key for enterprises interested in a long-term strategy, especially when investing in enterprise-wide platforms. SAS is planning new releases this year of the solutions on offer for Q1 and Q4. Key improvements will include integrated alert analytics, packaged ETL (extract, transform, load) tools, and the greater integration of AML alerts onto its ECM (enterprise content management) platform. In addition, the vendor has developed a new online banking transaction model and a new ACH/Wire model, a key user of which is a large universal bank headquartered in Charlotte, North Carolina. An interesting new release is the Credit Abuse option, a reflection of the broader long-term trend of converging fraud and credit risk analytics. In addition, in 2012 enterprises will have access to customer management of network-based detection and integrated content categorization. Beyond the current year, with certain clients SAS is developing a more functional KYC, which includes the monitoring of various customer scores, and this will eventually be translated into a stand-alone solution.

The roadmap proves the claim that SAS is increasingly adding out-of-the box functionality to its products. An important factor for the company is the ability to maintain long-term relationships with key clients, such as HSBC, with which SAS is jointly developing new solutions that will become stand-alone offerings. The list of such references has recently increased in parallel with the number of new products in the portfolio.

APPENDIX

Further reading

Selecting an Anti–Financial Crime Solution in Retail Banking, October 2011

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