Closing the Gaps in Market-Based Money Laundering Detection

Today, money laundering through markets is a continually evolving threat. Bad actors show ever more sophistication, constantly seeking new channels to launder the proceeds of crime. A recent paper by the FCA reemphasizes the complexity of detecting money laundering in capital markets due to the key characteristics of capital markets that complicate money laundering detection: high transaction volumes, fragmented data, complex networks of entities, and multiple asset classes (some with inherent risk such as low-priced securities).  

Given the complexity of this domain and the “needle in a haystack”-type searches required to detect sophisticated money laundering operations, regulators worldwide are urging companies to leverage new technology and innovation for transaction monitoring. However, even as they may be aware of the significance of money-laundering threats in the abstract, too many firms have either underestimated or not fully considered the financial crime related risks to which they are exposed, and how these risks meaningfully impact them.  

Recently, Quantexa was recognized by Chartis as a leader in FinCrime and Compliance 50 with award-winning technology that global customers are leveraging today to drive their compliance programs. Chartis recognized Quantexa as a leader in the capital markets AML space. Additionally, Quantexa was commended for expertise in entity management, augmented analytics, and data enrichment, all of which are crucial for addressing the unique challenges firms face in detecting money laundering. 

By taking a contextual approach and incorporating decision intelligence, Quantexa’s technology elevates traditional AML methods, allowing firms to better identify hidden risks and suspicious activity. Quantexa's solutions help fill a significant gap in protecting against market-based money laundering, a gap that is especially important as financial markets grow more complex. 

Why Quantexa is best placed to address the evolving financial crime threat 

Quantexa’s strong placement in the FCC50 reflects our commitment to delivering innovative, scalable, and high-performing solutions that address the most pressing challenges in financial crime risk management. The ranking criteria emphasize modularity, AI integration, real-time detection, and strategic execution—areas where Quantexa continues to lead. 

Our recognition in the FCC50 ranking underscores Quantexa’s role in shaping the future of financial crime detection—helping organizations stay ahead of threats with a smarter, data-driven approach.  

These traits are more important than ever as capital markets face ever increasing threats.  

Enhancing AML detection with a smarter, context-driven approach 

Traditional transaction monitoring alone is not enough to effectively identify suspicious activity, as transactions often appear ordinary when viewed in isolation. According to the FCA’s report, many firms struggle with transaction transparency, overwhelming trade volumes, insufficient market-specific controls, and an excessive number of false positives that hinder effective investigations. To overcome these challenges, financial institutions must take a broader approach—considering transaction monitoring alerts alongside KYC data, proactive intelligence-led analysis, investigations of hidden or linked relationships, and changes in ultimate beneficial owners (UBOs). 

This is where Quantexa’s award-winning solutions make a difference. By leveraging Decision Intelligence, firms can enhance their financial crime detection capabilities through: 

• Automating data integration for a holistic view: Many financial institutions struggle with fragmented data across multiple systems, making it difficult to detect suspicious activity. Quantexa’s Decision Intelligence platform automates the integration of structured and unstructured data from internal and external sources, ensuring a more complete and connected view of entities and transactions. 

• Leveraging network analytics to uncover hidden risks: Bad actors often exploit fragmented financial systems to mask illicit activity. Quantexa’s entity resolution and network analytics capabilities identify hidden relationships between seemingly unconnected entities, exposing risks that would otherwise go unnoticed. 

• Purpose built  typologies to identify new risk: Market specific typologies are essential for detecting AML risk in this sector. Quantexa’s purpose-built typologies have proven effective in uncovering new money laundering risk in capital markets. 

• Reducing false positives with contextual analytics: Traditional transaction monitoring systems often generate a high volume of false positives, overwhelming compliance teams. Quantexa’s platform applies AI-driven contextual analytics to prioritize alerts based on risk, reducing noise and helping teams focus on genuinely suspicious activity. 

By integrating these capabilities, financial institutions can move beyond traditional transaction monitoring and take a proactive, intelligence-led approach. 

Strengthening collaboration between AML/CFT and trade surveillance 

Market abuse and money laundering risks are deeply intertwined, with certain forms of market abuse serving as predicate offenses for money laundering under national regulations. Surveillance controls designed for market abuse compliance can also play a critical role in detecting suspicious activity from an AML perspective. The FCA has identified closer collaboration between transaction monitoring and trade surveillance (TS) teams as a best practice, as firms often find market abuse easier to detect than money laundering. However, many organizations—especially smaller firms—struggle with this integration, increasing the risk of overlooking illicit financial activity. 

To bridge this gap, the FCA recommends adopting more advanced and comprehensive solutions that apply machine learning techniques and leverage KYC data. This is where Quantexa’s Decision Intelligence Platform delivers a transformative impact. By integrating insights from multiple monitoring systems, Quantexa enables firms to build a complete risk profile, enhancing their ability to detect and respond to financial crime threats in real time.  

Quantexa's approach to financial crime detection sets industry standard 

The Chartis recognition further solidifies Quantexa’s role as a leader in transforming financial crime detection, particularly in capital markets. By taking a contextual approach and incorporating Decision Intelligence (DI), Quantexa’s technology elevates traditional AML methods, allowing firms to better identify hidden risks and suspicious activity.  

Quantexa's financial crime solutions help fill a significant gap in protecting against market-based money laundering, a gap that is especially important as financial markets grow more complex.