Proprietary vs Open-Source Software in Advanced Data Analytics for Financial Institutions
Pesonen, Arttu Santeri (2022)
2022
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2022053113786
https://urn.fi/URN:NBN:fi:amk-2022053113786
Tiivistelmä
Advanced data analytics are needed by financial institutions to achieve compliance and meet all the regulations they are facing to stay in the business and avoid massive sanctions failing in compliance could mean. This need is met with AML (anti-money laundering) software but there are many vendors providing this software and the solutions differ from each other. Open-source software is also a big thing nowadays so what about open-source AML solutions? This research was done with literature review as the research method.
This research discusses the evolution of open-source software in other organizational software and ERP solutions are used as an example. This is done to provide background so the future of AML and open-source software can be analyzed more accurately. There are barely any open-source AML solutions available so having a reference point courtesy of analyzing how open-source software has been included in the ERP market provides more information. Nowadays on the ERP market either sponsored open-source ERP solutions seem to have achieved a solid standing but open-source technology is also utilized by proprietary vendors such as SAP.
Achieving compliance and meetting regulations are explained to provide background to what a good AML solution should enable the user to perform. Compliance includes anti money laundering, customer due diligence and know your customer procedures.
A good AML software will allow the user to perform AML, KYC and CDD processes and helps to combat malicious activity that financial institutions customers could perform. Selecting the correct AML solution for your institution might be hard so three different solutions were selected to be compared. SAS Institute’s AML to represent onpremises / own cloud deployable proprietary solution, ComplyAdvantage to represent a newer vendor that offers a solution with API integration and Red Hat AML to include a solution that is only utilizing open-source technology.
In the research it was concluded that ComplyAdvantage would likely be tempting for smaller financial institutions because of the API connectivity to the AML engine that is hosted by ComplyAdvantage, SAS Institute’s solution is well proven and a solid pick but is expensive and likely financial institutions could require outside help to manage the solution and Red Hat AML is architecture wise promising but does not seem to have any users. It was also theorized that likely the future of open-source technology with AML is that proprietary vendors will utilize it to improve their solutions instead of new open-source based AML solutions gaining ground.
This research discusses the evolution of open-source software in other organizational software and ERP solutions are used as an example. This is done to provide background so the future of AML and open-source software can be analyzed more accurately. There are barely any open-source AML solutions available so having a reference point courtesy of analyzing how open-source software has been included in the ERP market provides more information. Nowadays on the ERP market either sponsored open-source ERP solutions seem to have achieved a solid standing but open-source technology is also utilized by proprietary vendors such as SAP.
Achieving compliance and meetting regulations are explained to provide background to what a good AML solution should enable the user to perform. Compliance includes anti money laundering, customer due diligence and know your customer procedures.
A good AML software will allow the user to perform AML, KYC and CDD processes and helps to combat malicious activity that financial institutions customers could perform. Selecting the correct AML solution for your institution might be hard so three different solutions were selected to be compared. SAS Institute’s AML to represent onpremises / own cloud deployable proprietary solution, ComplyAdvantage to represent a newer vendor that offers a solution with API integration and Red Hat AML to include a solution that is only utilizing open-source technology.
In the research it was concluded that ComplyAdvantage would likely be tempting for smaller financial institutions because of the API connectivity to the AML engine that is hosted by ComplyAdvantage, SAS Institute’s solution is well proven and a solid pick but is expensive and likely financial institutions could require outside help to manage the solution and Red Hat AML is architecture wise promising but does not seem to have any users. It was also theorized that likely the future of open-source technology with AML is that proprietary vendors will utilize it to improve their solutions instead of new open-source based AML solutions gaining ground.