Fraud no longer arrives as a single, obvious red flag. It travels through everyday payments, often disguised as legitimate activity, and that makes it harder to stop before the harm is done.
According to AiPrise, for banks, payment providers, FinTechs and crypto platforms, each approved transaction can deliver revenue while also carrying compliance and financial crime exposure.
The scale of the threat is rising quickly. Newly released Federal Trade Commission data show consumers reported losing more than $12.5bn to fraud in 2024, a 25% increase on the prior year. As transaction volumes grow and payments move faster, criminals test controls repeatedly, hunt for weak points and adjust tactics more rapidly than many traditional defences can keep up with.
That is why the comparison between transaction screening and transaction monitoring matters. They are often grouped together, but they operate at different stages of risk and rely on different signals. Confusing them, or leaning too heavily on one, can create blind spots that criminals are happy to exploit. When the two controls work in tandem, organisations are better placed to block high-risk activity early while still detecting longer-term patterns that only become clear over time.
Transaction screening is a preventive control. It is designed to review transactions before they are approved or executed, with the goal of identifying and stopping activity linked to prohibited, fraudulent or high-risk behaviour before funds move. In practice, this means checking key transaction attributes such as the sender, receiver and payment details against sanctions lists, politically exposed persons (PEP) databases and other AML watchlists. When risk indicators surface, the transaction can be flagged for review, delayed, or rejected entirely.
From a compliance perspective, screening supports customer due diligence (CDD) and broader AML/CFT requirements by helping firms avoid breaches tied to sanctions evasion, money laundering, terrorist financing, proliferation financing and corruption. For screening to be effective, it typically needs to be applied before approval or settlement, draw on up-to-date global watchlists and sanctions data, and combine external data with internal risk signals so investigators can make clear, defensible decisions.
Transaction monitoring, by contrast, is a continuous control focused on what happens after transactions are processed. It reviews real-time and historical activity to identify suspicious behaviour and emerging risk patterns that may not be obvious when looking at a single payment in isolation. By comparing activity against expected customer behaviour and known profiles, monitoring can surface anomalies such as unusually large transfers, rapid movement of funds between accounts or jurisdictions, or patterns involving higher-risk countries, products or channels.
Monitoring is a core component of AML programmes, but it should not sit alone. In practice, it supports a broader monitoring for suspicious activity (MSA) approach that ties together ongoing CDD, behavioural analysis and investigative workflows, rather than simply generating alerts with little context.
A simple example shows where the difference matters. If a criminal uses a seemingly legitimate business to move money through multiple accounts to conceal its origin, transaction screening might not flag individual payments if no sanctioned parties or watchlist matches appear. Monitoring, however, can identify abnormal volumes, rapid “layering” movements, or other unusual patterns over time, prompting an alert and investigation.
When screening or monitoring falls short, the consequences can be severe. Organisations may face regulatory fines and enforcement actions, heightened scrutiny from regulators and banking partners, missed suspicious activity reports (SARs), and long-term damage to trust. Regulators also expect suspicious activity to be detected and reported promptly, and delays can increase legal exposure for firms and, in some cases, responsible individuals.
For that reason, many organisations regularly test whether their controls remain fit for purpose. That can include assessing whether high-risk alerts are prioritised effectively, whether manual reviews create bottlenecks or obscure context, whether the programme is using a strong mix of internal and third-party data to reduce false positives, and whether sanctions and watchlists are updated quickly when requirements change.
In that context, strong screening capabilities remain essential for identifying sanctioned entities, PEPs and adverse media exposure early, and some firms are exploring tools such as AiPrise’s watchlist screening to strengthen controls while reducing manual effort and alert fatigue.
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