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An article relating to this blog post on Finextra:

Barclays selects Temenos AML technology

Barclays has selected anti-money laundering technology from Swiss vendor Temenos as its its preferred global sanctions system for payments screening.


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AML Software Market Growth

Banking software has been around forever of course, so perhaps you might not find the topic that "sexy", but you may want to take another look at this industry that grows and changes as fast as any market sector out there. 

I got my start in Financial Services Software while I was working at JPMorgan Chase in the early nineties. I started working with a company that later hired me away as a consultant. Hogan Systems was an IBM seed company and was later sold and sold again, and now is part of Computer Sciences Corporation. 

In a world of big banks and big corporations providing them with the tools to manage customer accounts and relationships, you might think the market is a tough one to break into. You would me mistaken. Take for example this latest article about Temenos Group AG. The first thing that you may want to make note of is their founding date; 1993, and then note that they have over 1,200 employees and customers in 120 countries. If that isn't enough to show you that newcomers to the market can generate big business, consider the company that they just aquired, Viveo Group (out of France). This company is a core banking software company that, although it has been around for a few more years, was procured for around $81 million to strengthen their Anti-Money Laundering (AML) software offering (and certainly eliminate competition). The truth is there are a slew of other companies out there, developing software for AML and a number of other banking and financial transaction related needs. 

So what is driving these opportunities for new emerging service and software providers?

In my view there are three factors, one of which is the most overlooked. These are:

1) David and Goliath effect: The small company's ability to remain agile and flexible and quickly meeting the needs that take larger corporations more time to meet through adapting organizational and technology infrastructures. 

2) Darwin effect: Technology's constant re-invention or mutation and ability to compete with other "species" of technologies for dominance. 

3) Sensitivity effect: In a Stimulus-Response Model, this is the organism's ability to respond to external stimuli. And it is the external pressures that have, in my opinion, been the biggest force behind this sector's growth. 

The external factors that have pushed, and continue to push, growth and create opportunities in the financial services sector, is perhaps the most overlooked factor by most organizations trying to compete in this sector. It's not just about providing better services to generate more business. In fact, there are several companies out there that are doing very well and who's success rides on the back of inferior products. So it must be more than just offering the best product, promising the most new business, or highest ROI. 

Take the current stimuli of the world financial crisis, increased threat of terrorism, preponderance of Ponzi schemes, etc. etc. and the response by regulators and stock holders, who now demand even greater controls and monitoring of customer and corporate activities. 

None of the three factors I've mentioned are new, and they are all pretty much common sense, but it is important to have all three in mind when you begin to analyse where the opportunities lie for software and service providers operating in the financial sector (or any other sector for that matter). The growth of AML software, which is kind of obscure for the "average Joe" or even the average compliance officer, is an indication that even niche opportunities exist and can be exploited for creating new business offerings that can obviously generate 10 fold returns for visionaries and investors.

Is "banking software" sounding a little more sexy now?

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