Everything is about speed in financial crime prevention.
Criminal networks operate faster than ever, using AI-driven tools to move funds across borders in seconds. Instant payments are becoming the norm across Europe. At the same time, regulators are tightening expectations, and customers expect seamless transactions without compromising safety.
For financial institutions, this creates a new reality: batch controls and delayed reviews are no longer sufficient. When payments settle in seconds, compliance decisions must keep pace.
Real-time screening changes this dynamic. By embedding sanctions and AML controls directly into the payment flow, institutions can screen, assess, and decide before a transaction is released.
To understand what this shift means in practice, we asked Liza Ivinskaia, Product Owner at Trapets, to share her insights on why real-time transaction screening has become essential and how financial institutions can adapt their operating models accordingly.
Why has real-time transaction screening become essential?
Real-time screening has shifted from a technical enhancement to a business-critical control.
As payment flows move toward instant processing, institutions must prevent sanctions breaches while maintaining effective and efficient compliance frameworks.
Screening and decision-making on whether to hold, release, or escalate a transaction must occur before execution to prevent prohibited transactions and avoid unnecessary delays for legitimate payments.
What does the regulatory landscape look like, and what role does real-time screening fulfil?
The regulatory landscape is tightening across sanctions, AML/CTF, and payments, while payments are moving toward instant processing, leaving no time for batch controls.
Several developments illustrate this direction:
- EBA/GL/2024/15 restrictive measures guidelines set expectations for payment service providers (PSPs) and crypto-asset service providers (CASPs) to maintain effective controls when performing transfers of funds or crypto-assets. In practice, this requires screening and decisioning the moment of the transfer.
- EU Regulation 2023/1113 (Funds Transfer Regulation) extends transfer controls to certain crypto-asset transfers and reinforces “controls at the transfer layer”, pushing the industry toward real-time enforcement, where execution is immediate.
- AMLR (Regulation (EU) 2024/1624), Article 71 requires institutions to refrain from carrying out transactions when suspicion arises. In instant payment flows, the only practical way to comply is to detect and decide (hold/release/escalate) before the transaction is executed.
- Globally: FATF’s targeted financial sanctions standards emphasise freezing and implementation without delay. Combined with faster payment execution, this drives supervisors and firms towards near-real-time screening and operational controls.
- Outside the EU: OFAC Sanctions Compliance Guidance for Instant Payment Systemsshows a strong market signal: regulators explicitly address instant payments and encourage risk-based controls and technology solutions that keep sanctions compliance effective even when payments settle immediately (again, implying real-time screening and decisioning).
What does real-time screening mean in practice for financial institutions?
Real-time transaction screening becomes an embedded part of the payment execution flow.
Screening and decisioning must happen before a payment is released, which requires:
- tight integration into existing payment flows;
- case/workflow tools;
- and operational procedures.
It also introduces a deliberate balance between speed and control. As Liza mentions:
Institutions need controls that can stop or escalate true risks without creating unnecessary friction, delays, or customer impact for legitimate transactions.
In practice, it also means stronger operational readiness, such as:
- clear hold/release/escalate rules;
- audit evidence;
- and resilience.
Decisions are made under strict latency requirements and directly affect payment completion.
What should companies consider when adopting real-time transaction screening?
1. Balance detection risk and false positives
In real-time flows, false positives are extra costly because they directly delay payments.
Companies should:
- Define acceptable friction levels.
- Apply tiered controls for higher-risk segments (such as step-up checks).
- Continuously monitor precision/recall so that controls remain effective without breaking customer experience.
2. Address counterparty data quality challenges
Real-time decisions often rely on payment messages, where counterparty identifiers and name or address fields weren’t designed for high-precision screening.
Firms need strategies for:
- Data enrichment;
- Normalisation;
- Alias handling;
- And clear fallbacks when data is incomplete.
Otherwise, screening becomes noisy and error-prone.
3. Understand SEPA Instant requirements
For SEPA Instant payments, the EU approach focuses on protecting payment speed while maintaining sanctions compliance.
Instead of transaction-by-transaction screening, institutions must ensure:
- Immediate re-screening after new sanctions entries are published.
- At least daily customer screening.
- Fast operational account holds when necessary.
Liza noted:
Your operating model needs excellent list-update handling, customer re-screening, and fast account holds/escalations, not only per-transaction checks.
4. Redesign crypto transfer flows
For crypto transfers, once a transaction is signed and broadcast, it can be hard or impossible to stop.
Effective sanctions and AML controls often require:
- Redesigning the flow so screening happens pre-authorisation (before signing).
- Using the travel-rule/KYC context and appropriate screening tooling for crypto transfers.
The EBA restrictive-measures guidelines explicitly cover controls for crypto-asset transfers by CASPs, reinforcing the need for fit-for-purpose processes.