Faster Payments, Higher Stakes: Rethinking Transaction Screening in the Real-Time Era
- Mayank Sharma
- 4 hours ago
- 2 min read
The payments industry is in the middle of a high-speed evolution. New rails like FedNow, RTP, and SWIFT MX are making real-time transactions the norm, while ISO 20022 is bringing richer, more structured data into the mix. For FinTechs, PayFacs, and banks, this is an opportunity—and a regulatory stress test.
Global regulators, from OFAC in the US to the EU’s Instant Payments Regulation, are making one thing clear: sanctions and anti-money laundering (AML) compliance must be just as fast as the payments themselves. That means not just running a name against a list, but interpreting the context of a payment, parsing structured data, and detecting risks in milliseconds. The days when compliance could take hours or even minutes to clear a transaction are over.
Why many transaction screening tools fall behind
Most traditional screening solutions were built for slower, batch-based settlement cycles. They struggle to keep up with today’s high-volume, always-on payments ecosystem. Many can’t fully interpret ISO 20022 messages or handle proprietary payment formats without significant workarounds.
They also tend to produce high volumes of false positives due to inflexible matching logic and limited ability to factor in transaction purpose, corridor restrictions, or culturally sensitive name-matching. This leaves compliance teams drowning in irrelevant alerts while still at risk of missing true hits—an outcome regulators are increasingly penalizing.
Complexity is the new normal
The regulatory landscape is faster and more intricate. Sanctions programs are evolving to include conditional restrictions tied to transaction details, such as dual-use goods, sectoral limits, and specific trade corridors. Screening is no longer a simple yes or no lookup; every payment needs to be understood in context.
Meanwhile, geopolitical instability and rising sanctions activity require continuous list updates and the ability to customize watchlists for different jurisdictions. Open banking regulations add further uncertainty, with oversight tightening in some markets while others consider deregulation. For compliance teams, agility has become just as critical as accuracy.
The case for modern, future-ready screening
What’s needed now is a new generation of transaction screening technology. It should be fast enough to keep pace with instant payments, flexible enough to adapt to emerging rails and formats, and intelligent enough to filter out noise while catching real threats.
An ideal solution should parse any payment format, from ISO 20022 to proprietary messages, and integrate seamlessly with existing payment flows. It should deliver sub-millisecond decision times without sacrificing customer experience or audit readiness. And it must give compliance teams control to configure scenarios for their unique risk profile, whether that’s jurisdiction-specific watchlists or corridor-based rules.
The payments clock isn’t stopping
Regulators aren’t slowing down, payment volumes aren’t dropping, and enforcement actions aren’t decreasing. For payment providers, “good enough” screening is no longer enough. Modernizing screening capabilities is essential to staying competitive in a payments landscape where speed, accuracy, and adaptability define who stays in the game.