Across Europe, instant payments are no longer a niche service – they are becoming the standard. But while real-time money movement unlocks speed and convenience for consumers, it also accelerates the pace of fraud.
For banks, this shift means that fraud prevention, once a largely back-office process, must now happen in real time.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
A new regulatory landscape
Regulators have responded with new requirements that reshape the way payments are verified. The EU’s Verification of Payee mandate, together with evolving Anti-Money Laundering directives, is setting a higher bar for payment security. Institutions must now confirm that account details match the intended payee, screen transactions against sanctions lists, and spot suspicious patterns before the payment leaves the account.
These measures are designed not only to prevent misdirected transfers, but also to strengthen the financial system against fraud, sanctions evasion, and illicit finance. For many banks, this means extending checks to customer segments once considered low risk, sharply increasing the volume of transactions subject to scrutiny.
As the EU seeks standardisation, it’s encouraging non-euro EU countries to adopt the same rules by 2027, ushering in a uniform, high-frequency verification process for both domestic and cross-border instant payments. The direction of travel is unmistakable as compliance is no longer a periodic exercise, but a state of continuous vigilance woven into everyday banking.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData
Real-time risk and challenges
Meeting these obligations is no small task. Real-time payment verification demands that banks be able to confirm the payee’s identity, analyse the payee and decide whether the transaction aligns with the sender’s known risk profile, all within milliseconds.
For many institutions, the underlying infrastructure is not ready. Legacy fraud prevention systems were designed for batch processing and post-event investigation, and in a real-time environment, manual workflows and siloed data create choke points.
Even where some automation exists, data fragmentation remains a major obstacle. Customer profiles, transaction histories, and third-party risk intelligence often reside in separate systems, making it difficult to form a single, trusted view of the transaction.
Many teams also lack confidence in external data sources, fearing false positives that can disrupt legitimate payments and frustrate customers.
The result is a compliance function under constant pressure, with analysts scrambling to handle growing queues of alerts. What should be a quick, data-driven decision instead becomes a manual, time-consuming process that undermines the very speed instant payments are meant to deliver.
From reactive compliance to proactive intelligence
To keep pace with regulation and evolving fraud tactics, banks need to move beyond reactive compliance. Rather than simply adjusting their processes to satisfy the latest mandate, they should aim to anticipate risk, detecting anomalies before they become breaches or losses.
This requires a shift from static rules to dynamic risk models that evolve with changing patterns, a consolidation of siloed data into unified intelligence, and a move away from heavy manual intervention toward AI-driven decision-making.
Dynamic risk models can adapt to new threats faster than fixed rule sets, allowing banks to respond to patterns as they emerge rather than after they have caused damage. When these models are paired with unified data – bringing together internal transaction records, customer history, and trusted external intelligence – the picture of potential risk becomes clearer.
And, by automating the high-volume, low-complexity decisions, AI can ensure that human analysts focus their expertise on the most complex cases, where judgment and context matter most.
The role of agentic AI
One promising technology in this transformation is agentic AI. Unlike traditional machine learning models that only predict outcomes, agentic AI has the potential to orchestrate multiple data checks, escalate edge cases, and even recommend remediation steps in real time.
A payment passing through such a system might be examined through a rapid series of coordinated checks. The AI could confirm the account holder’s identity using internal data, cross-check the payee against the latest sanctions lists, and assess whether the transaction’s amount, timing, or destination aligns with the customer’s historical behaviour. It could then approve low-risk transactions automatically while flagging suspicious ones for human review.
This approach reduces the manual bottlenecks that slow instant payment processing. The goal is not to replace human judgment but to augment it, ensuring that people spend their time on the cases where intervention is genuinely necessary.
Compliance as a strategic advantage
The shift from reactive compliance to proactive intelligence also has a competitive dimension. Institutions that can process instant payments securely without creating unnecessary delays will stand out for the quality of their customer service. The same capabilities that satisfy regulatory demands, including real-time verification, unified risk intelligence, and automated decision-making, can strengthen customer trust, lower fraud losses, and improve operational efficiency.
For forward-looking banks, compliance is more than a defensive posture against penalties. It is a way to position themselves as trusted, technologically advanced players in a crowded payments landscape. As customers grow accustomed to instant payments, they will gravitate toward providers that can combine speed with visible security.
The next wave
As 2027 edges closer, the pressure will only grow. Non-euro EU countries will soon be subject to the same real-time verification requirements as their eurozone counterparts.
At the same time, fraudsters will continue to refine their methods, probing for weaknesses in systems that have only recently been upgraded. Banks that delay adaptation until new mandates are enforced will find themselves perpetually in catch-up mode.
The institutions that lead will be those investing early in scalable, AI-driven verification infrastructure, building trust in their risk data through rigorous validation and transparent decision-making, and fostering collaboration across fraud, compliance, and technology teams.
In the high-speed world of instant payments, regulation is no longer an afterthought; it is a defining force in how payments are processed, monitored, and secured.
The banks that treat fraud prevention as a strategic capability rather than a regulatory checkbox will not only meet the demands of oversight bodies but will also earn the enduring trust and loyalty of their customers.
Andrew Whittaker, Senior Business Consultant at SAS.
