Next Level Compliance: AI in Payments Transaction Monitoring and Financial Crime Prevention

Regulatory implications for AI-based transaction monitoring

Part 2 of our series examines the regulatory landscape shaping AI in payments monitoring, with a focus on the Instant Payments Regulation and the EU AI Act.

The Instant Payments Regulation introduces customer-based monitoring, creating challenges for real-time AI systems that rely on transaction-level data. Yet institutions can still leverage AI by adopting hybrid approaches that either score transactions without interfering with processing or apply real-time scoring selectively.

Part 2 also explores the integration of AI into KYC, Verification of Payee and list matching processes. These synergies reduce false positives, streamline operations and unlock new efficiencies across payments and compliance.

The EU AI Act establishes stringent requirements for high-risk AI systems, including documentation, explainability, human oversight, data governance, monitoring and auditability. Meeting these standards is essential for regulatory trust.

We clarify what real-time means in an operational context, how to manage latency budgets and how to implement explainable AI that satisfies both supervisors and internal audit — without slowing down payment flows.

AI offers transformative potential, but compliance-by-design is the foundation that allows institutions to deploy it safely and confidently.