Manish Kumar is a Senior Analyst II at AML RightSource. We encourage our team members to share their insights and expertise by contributing to our content library.
Real-time payment systems are transforming the way money moves around the world. Customers now expect payments to settle in seconds, not days. While this shift creates convenience and efficiency, it also introduces new risks. For compliance professionals, the challenge is clear: how do we design transaction monitoring controls that keep pace with real-time speed, without compromising effectiveness?
Real-time payment systems are transforming financial services. Faster transactions create better customer experiences and open doors to fraud and money laundering risks. Traditional anti-money laundering (AML) controls often rely on batch processing, which doesn’t fit real-time environments.
This blog explores how to design effective transaction monitoring for instant payments—without sacrificing speed.
Real-time payments settle in seconds. Fraudsters exploit this speed because it’s almost impossible to recover once money moves. Monitoring must shift from reactive to proactive. Controls need to detect unusual activity before or immediately after payment authorization.
While working on a case, I encountered a scenario where a fraudster used stolen credentials to access a new account and attempted a high-value transfer via a real-time payment network. The funds were quickly split across several mule accounts. Because we had proactive monitoring rules tied to KYC data and device signals, the system flagged the transaction instantly, allowing us to stop it before settlement and prevent a significant loss.
Not all transactions carry the same level of risk. Real-time monitoring should prioritize higher-risk scenarios — such as cross-border transfers, transactions from new accounts, or unusual spikes in activity. Dynamic thresholds allow systems to flag outliers without overwhelming analysts with false positives.
A strong monitoring system connects directly with a customer’s profile. Knowing who the customer is, their typical transaction behaviour, and risk rating allows alerts to be more precise. This integration helps reduce noise and ensures analysts focus on meaningful alerts.
Instead of relying solely on post-transaction reviews, calculate risk scores in real-time.
Factors can include:
A real-time score enables instant approvals for low-risk transactions while flagging suspicious ones for further checks.
Machine learning models are beneficial for real-time environments:
These models create a smarter and faster safety net when paired with human oversight.
In real-time systems, alert queues can quickly proliferate. Key strategies:
Effective workflows keep investigations efficient and reduce customer friction.
Transaction monitoring is one part of a defence strategy. Combine it with:
Multiple layers help detect sophisticated schemes without adding unnecessary delays.
Real-time payment security is not just a compliance function. Fraud prevention, cybersecurity, and AML teams should work together. Sharing insights about new fraud schemes, mule account activity, and typology changes creates a 360-degree defense.
Instant payments require continuous monitoring and tuning.
Governance ensures compliance while maintaining speed.
Regulators are paying close attention to real-time payment risks. Expect focus on:
Strong monitoring systems demonstrate that your organization takes these risks seriously.
Instant payments thrive on trust. A frictionless experience is essential for customer adoption, but not at the cost of security. Real-time controls that minimize false positives while catching genuine threats create confidence for both customers and regulators.
Real-time payments represent the future of financial services. They demand more intelligent, faster monitoring that blends technology, data, and human judgment. By using segmentation, pre-transaction scoring, machine learning, strong governance, and cross-functional collaboration, institutions can protect customers and deliver the seamless experience that instant payments promise.
Innovative financial institutions can keep pace with real-time demands while protecting against financial crime by investing in creative, adaptive transaction monitoring systems. At AML Right Source, we see this challenge as an opportunity to reimagine compliance for a faster world and to help our partners design controls that are as dynamic as the payment systems they safeguard.