Why real-time transaction screening is no longer optional for financial institutions

Financial institutions are under greater pressure than ever to stay ahead of financial crime.

Criminal networks are evolving at speed, while regulators are responding with tougher rules and tighter enforcement.

This is especially true in the EU. New guidelines now require banks, payment service providers (PSPs) and crypto-asset service providers (CASPs) to step up their controls and prove that transactions are being screened against sanctions well before they’re executed.

In this article, we’ll explore what real-time transaction screening is, why it’s becoming essential for compliance and what financial institutions should look for when choosing a transaction screening solution.

New EU requirements around transaction screening: what’s changed?

The requirement for financial institutions to comply with sanctions is not new; this obligation has been in effect for a long time.

However, in November 2024, the European Banking Authority (EBA) introduced two landmark guidelines (EBA/GL/2024/14 and EBA/GL/2024/15). 

What is new is the introduction of clear, uniform requirements specifying the processes, routines, and controls that must be in place, all guided by a risk assessment of potential exposure to sanctions.

For banks, PSPs and CASPs, these guidelines go further than ever:

• Full-party screening: Not just senders and beneficiaries, but intermediaries, counterparties and even free-text fields must be checked.
• Pre-execution proof: Regulators want to see controls that stop high-risk payments before they’re processed, not just monitoring after the fact.
• Consistency across payment rails: Firms are now expected to have no gaps or blind spots across any transaction type (such as SWIFT, crypto, or internal transfers).

These guidelines will take effect officially on 30 December 2025. 

Firms without effective real-time transaction screening protocols in place are potentially exposing themselves to regulatory risk and reputational damage; not to mention a cumbersome workload.

What is real-time transaction screening?

Real-time transaction screening is the process of instantly checking all transaction parties and payment details against global sanctions, AML, and regulatory watchlists before execution.

Instead of relying on post-transaction monitoring, which may detect problems only after money has already moved, real-time screening provides immediate validation within the payment flow.

This means:

• High-risk payments can be blocked or reviewed before execution.
• Regulators and auditors can see evidence of robust controls.
• Compliance gaps across different payment types are closed.

How is transaction screening different from transaction monitoring?

Transaction monitoring looks at patterns across multiple payments to detect suspicious behaviour (e.g., smurfing, unusual geographies or rapid movement of funds). 

It’s an essential tool, but it alone doesn’t prevent high-risk or sanctioned payments from leaving the institution.

Real-time transaction screening is the missing piece of the puzzle. 

It ensures that individual payments are clean before they move. 

Together, screening and monitoring form a layered defence system: one stops prohibited payments at the gate, while the other detects evolving patterns and behaviours over time.

What to look for in a real-time screening solution

With financial institutions under greater regulatory pressure than ever, choosing the right screening system is critical. Here are the essentials to prioritise:

1. Holistic coverage

It's no longer enough to simply screen the sender or the beneficiary. 

Firms must ensure that their screening system also tracks intermediaries and ultimate debtors/creditors in order to stay compliant.

2. Instant in-flow decisioning 

If screening takes place after the payment has been processed, it’s already too late.

Financial institutions need transaction screening systems that integrate directly into the payment flow, and provide instant validation in real-time without slowing down processing.

3. Configurable rules and flexibility 

Risk varies greatly between institutions; therefore, transaction screening systems shouldn’t be “one size fits all”. 

Firms should opt for systems that allow them to tailor how they act on alerts (block, review or let through) while still meeting compliance obligations.

4. Audit-ready transparency

Regulators are increasingly demanding clarity. Systems must produce clear evidence of screening actions for audits and investigations.

Getting ahead of financial crime with real-time transaction screening

Regulators are raising the bar, and criminals are testing weaknesses faster than ever. 

Real-time transaction screening gives financial institutions the ability to close compliance gaps and prevent regulatory breaches before they occur.

At Trapets, we’ve built our new real-time transaction screening solution with these exact challenges in mind. 

Integrated directly into the payment flow, it screens all transaction participants and details against global watchlists instantly, giving you control, consistency and full compliance from day one.

Contact our team today for a demo and see how real-time screening can strengthen your compliance framework.