FRAML Solutions, 2023: Market and Vendor Landscape
As concerns around financial crime escalate, financial institutions and regulators are placing greater emphasis on combined fraud and anti-money laundering (FRAML) solutions. For financial institutions, the benefits of an integrated FRAML platform include enhanced capabilities, improved collaboration, cost-effectiveness and economies of scale. And by merging siloed teams, firms can boost their operational efficiency and optimize their risk management – all of which might help to explain FRAML’s growing popularity.
Financial institutions are taking several approaches to FRAML, notably managed services, orchestration and component solutions; some are even restructuring their organizations to align FRAML solutions with increasingly sophisticated customer journeys. Machine learning (ML) tools are also being used to automate many tasks involved in FRAML compliance and solutions, and could revolutionize this space. Vendors, meanwhile, are broadly adopting four categories of approach: managed services, packaged solutions, platform solutions and data and analytics-focused FRAML.
As a stand-alone packaged solution, FRAML will remain a core part of organizations’ drive to fight financial crime in a streamlined and consolidated way. However, it is vital to remember that the requirements of a FRAML process are highly contextual, and can vary according to several factors, including jurisdiction, operating model, size and business line. This makes it difficult to treat FRAML as one distinct approach. Indeed, ultimately the term ‘FRAML’ could be misleading, and even obsolete. Although firms can make significant operational gains by combining fraud and AML workflows, what they are actually pursuing goes beyond just these two disciplines.
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