Singapore’s position as a global financial hub brings heightened responsibility to prevent financial crime.
Over the past few years, the Monetary Authority of Singapore (MAS) has tightened anti-money laundering and counter-terrorist financing rules to align with evolving global standards, claims Flagright.
The regulator’s 2024 national risk assessment underscored an escalation in sophisticated financial crime, including cyber-enabled scams, organised crime networks, misuse of corporate structures, and risks linked to cross-border digital payments.
Institutions that fail to meet these standards face increasingly severe outcomes. In June 2025, MAS issued S$960,000 in penalties to five major payment firms for AML/CFT breaches, its first public enforcement action under the Payment Services Act. These cases revealed fundamental control failures such as inadequate screening of customers and beneficial owners, weak oversight of ownership structures, and insufficient internal AML procedures. MAS stressed that senior leadership must ensure proper oversight and effective implementation of controls. Against this backdrop, real-time AML capabilities have shifted from optional to essential for payment processors.
Payment processors in Singapore, typically licensed as Major Payment Institutions under the Payment Services Act, are required to comply with detailed AML/CFT measures. MAS Notice PSN01 sets out expectations around customer due diligence, transaction monitoring, suspicious transaction reporting, and enterprise-wide risk assessments. Singapore also adheres to global benchmarks set by the Financial Action Task Force, meaning local firms must maintain high standards in their compliance frameworks. Regulatory expectations are rising further, with MAS proposing updates in April 2025 to require institutions to incorporate proliferation financing risk into their AML programmes.
A central theme of these updates is the growing emphasis on real-time compliance. MAS has signalled that forthcoming guidance will focus heavily on immediate risk detection rather than delayed, batch-based processes. As payment flows accelerate—fuelled by instant transfers and 24/7 digital channels—regulators expect risk controls to move just as quickly. This means screening, monitoring, and decision-making must occur in real time, without grinding transactions to a halt or relying on slow manual reviews. Compliance professionals widely agree, consistently characterising real-time monitoring as “essential for effective compliance and fraud prevention.”
However, operating in the high-speed payments space brings unique challenges. Transaction volumes are large, cross-border transfers present uneven data quality, and sanctions requirements vary across jurisdictions. Many processors still rely on legacy tools that cannot handle modern transaction speeds. Batch-based systems typically produce extremely high false-positive rates—often around 90%—creating alert fatigue and slowing investigations. Outdated interfaces and siloed modules further reduce efficiency, while the lack of real-time capabilities leaves critical gaps that criminals can exploit. Maintaining and tuning these legacy systems is also resource-intensive, making it particularly difficult for mid-sized fintechs to stay agile.
Next-generation AML platforms are emerging to meet these demands, bringing together several core capabilities. Real-time transaction monitoring is the foundation, allowing processors to review transactions on the fly using high-speed rules engines and behavioural analytics. Sanctions and watchlist screening is embedded directly into payment flows, checking both senders and beneficiaries in milliseconds. Dynamic risk scoring continually updates customer and transaction profiles based on behaviour and context, enabling more precise and risk-based detection. Integrated case management tools streamline investigations, automatically generating cases, triaging alerts, and supporting timely STR submissions.
AI-powered analytics—sometimes referred to as AI forensics—has become a vital addition. These systems help uncover hidden patterns, enrich alerts with contextual information, reduce false positives, and automate repetitive tasks. Platforms such as Flagright illustrate this trend, with AI-driven modules enhancing monitoring, screening, governance, and quality assurance. These tools improve speed, accuracy, and the overall effectiveness of compliance teams.
The benefits for payment processors adopting real-time, AI-enabled AML systems are considerable. Real-time detection dramatically reduces risk exposure by intercepting suspicious transactions before funds can be withdrawn or moved. Businesses also gain significant operational efficiencies, with modern platforms reducing false positives, cutting compliance costs, and improving investigative accuracy. This increased precision strengthens trust with regulators, banking partners, and customers. Scalable, cloud-based solutions also support business growth by eliminating bottlenecks created by outdated compliance technology. Industry reviews highlight strong satisfaction with these modern tools, with many processors praising their responsiveness and flexibility.
But technology alone is not enough. To stay ahead of regulatory expectations, payment processors must maintain strong governance, conduct regular risk assessments, and ensure compliance teams are well-trained. Senior leadership must reinforce a culture where AML is a strategic priority. Continuous tuning, testing, and enhancement of controls is essential as criminal tactics evolve and regulatory requirements expand.
Real-time AML is now central to operating safely in Singapore’s fast-moving payments ecosystem. With MAS raising expectations and financial crime growing more sophisticated, processors must be able to identify, assess, and respond to risks instantly. By combining advanced technology, dynamic risk frameworks, and proactive compliance culture, Singapore’s payment processors can strengthen resilience, meet regulatory obligations, and protect the financial system.
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