Financial Daily from THE HINDU group of publications
Saturday, Feb 11, 2006
Financial Daily from THE HINDU group of publications Saturday, Feb 11, 2006 |
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Info-Tech
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Software Industry & Economy - Economic Offences Anti-money laundering software market set for bigger growth
Ambar Singh Roy
Kolkata , Feb. 10 THE recent IPO allotment scam seems to have provided a shot in the arm for anti-money laundering (AML) software providers, who are gearing up to meet what is increasingly in demand from potential users. The AML market, the size of which is estimated to be in the range of Rs 185-225 crore, is currently waiting for more orders to flow in, report software companies that hope to leverage upon the trend to their advantage. The trend assumes significance in the context of the racket involving IPOs like those of IDFC and YES Bank, which has led several quarters to call for higher vigilance on money laundering. AML-compliance: Investors have been referring to a SEBI guideline that required banks to be AML-compliant by end 2005. However, not much progress has been made on this front till date, it is pointed out. Mr Hanuman Tripathi, MD of Infrasoft Technologies, said the market for AML software is set to grow bigger in future, thanks to greater acceptance by banks, especially smaller entities that operate in sizeable numbers across the country. Infrasoft, he told Business Line, caters to the financial services industry and, besides banks, intends to tap mutual funds, insurance companies and securities trading outfits as well. As things stand, a sizeable chunk of the total spend is on AML software applications, while the rest is on hardware and allied peripherals. Companies point out that AML software applications have been deployed in around 2,000 sites across the domestic financial services domain. "The IPO scam is exactly one of the reasons why the use of AML software is assuming further significance", Mr Tripathi maintained, adding that a higher incidence of cross-selling of savings and investment products will also act as a trigger for software providers in the days ahead. The reference here was to marketing practices followed by banks, insurers and fund houses on `bundled' products. Greater vigil needed: There is clearly a need for greater vigil in terms of utilising the right software, agreed Mr Raamdeo Agrawal, Managing Director of Motilal Oswal Securities, a broking firm that offers a variety of services to clients. Stockbrokers, especially the bigger names, have already taken care to ensure that they are updated on this matter, he said, while referring to issues like KYC (Know Your Customer) and regulatory compliance. Not too many players operate in the AML market at the moment, it is pointed out. These include overseas companies such as Mantas, Search Space and Logica.
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