Empowering PSPs with Comprehensive Strategies for AML 

The Compliance Challenge for Payment Service Providers

Just as a busy highway needs efficient traffic management to prevent congestion and accidents, the world of digital payments requires robust compliance measures to ensure safe passage from sender to receiver. Payment service providers (PSPs) are at the forefront of this financial ecosystem, facilitating transactions across borders in real time. However, their role as intermediaries also makes them prime targets for illicit financial flows, including money laundering, sanctions evasion, and terrorist financing. Criminals exploit the speed and accessibility of digital payments to launder money and move funds undetected.

Regulators are increasing their scrutiny on PSPs as well, with the UK Financial Conduct Authority’s (FCA) recent “Dear CEO” letter emphasizing the need for payments firms to bolster their AML and sanctions controls. Non-compliance can lead to severe penalties, reputational damage, and even regulatory intervention. To navigate these challenges, PSPs need adaptable AML screening solutions that effectively identify and mitigate risks in proportion to their exposure while ensuring a smooth customer experience.

Challenges in Detecting High-Risk Customers and Payments

Understanding the regulatory landscape is critical for PSPs, and these challenges are at the forefront of their compliance strategies:

1. High Transaction Volumes: PSPs process millions of transactions daily, making manual AML checks impractical and prone to error.
2. Evolving Sanctions and Watchlists: Global sanctions lists and politically exposed person (PEP) databases are constantly changing, requiring real-time updates.
3. False Positives and Operational Overhead: Rigid compliance systems apply generalized approaches, generating high volumes of false positives, thus increasing investigation time and compliance costs.
4. Cross-Border Transactions: Payments spanning multiple jurisdictions must comply with varying regional regulations, complicating AML processes.
5. Criminal Innovation: Criminals continuously refine tactics to exploit PSPs, requiring solutions that adapt and evolve with emerging threats.

Recognizing these challenges is essential for PSPs aiming to enhance their compliance framework. To address these pressing issues and elevate compliance strategies, Lynx AML Screening provides key capabilities that redefine how PSPs manage financial crime risks.

Lynx AML Screening: A Smarter Approach to Compliance

Lynx AML Screening is an advanced AI-powered solution that enables PSPs to detect and prevent illicit transactions while ensuring a frictionless payment experience for legitimate customers. Our platform is designed to address the unique compliance challenges of payment providers through:

Real-Time Payment Screening for Proactive Risk Mitigation

• Monitors both senders and beneficiaries in real-time and in batch to detect high-risk entities.
• Provides instant transaction-level risk assessment, allowing firms to block suspicious payments before they are processed.
• Handles large-scale, high-speed transactions with millisecond-level response times.

Customer Screening for Secure Onboarding and Ongoing Monitoring

• Conducts thorough AML checks on new customers against global sanctions, watchlists, PEP databases and internal lists.
• Allows custom rescreening triggers, aligning updates with the organization’s risk appetite to prevent unnecessary alerts.
• Uses AI to intelligently apply the most optimized Natural Language Processing (NLP) algorithms for name scoring, driving down false positives.

Advanced Watchlist and Workflow Management

• Configurable rule builders tailor screening to geography, product, and customer risk, pinpointing risk effectively and proportionally.
• A no-code interface enables business users to modify screening rules in real time without IT or vendor reliance.
• An intelligent workflow manager automates case assignments based on your specific processes and priorities, streamlining operations and eliminating the need for manual task allocation.
• Real-time Key Performance Indicator (KPI) dashboards provide compliance teams with full operational visibility.

Seamless API Integration for Rapid Deployment

• Our cloud-native platform integrates effortlessly into existing PSP workflows via a two-way API.
• Fully compatible with ISO 20022, aligning with global payment messaging standards.

 

Aligning with FCA AML Priorities for Payments Firms

The FCA has emphasized the need for payments firms to strengthen their financial crime controls. Lynx AML Screening helps PSPs align with these regulatory expectations by implementing robust sanctions screening, enhancing transaction monitoring to spot suspicious patterns indicative of money laundering, and ensuring effective governance and oversight with audit trails and detailed compliance reporting. Additionally, Lynx offers flexible, configurable watchlist management, allowing firms to apply controls that are proportionate to the nature, scale, and complexity of their business and the risks to which they are exposed. By minimizing operational disruption through automated and scalable AML processes, Lynx enables PSPs to maintain compliance efficiently while delivering value for their customers.

Future-Proof Your Compliance Strategy with Lynx

With regulatory scrutiny on the rise and financial criminals becoming more sophisticated, PSPs must invest in AML solutions that deliver both compliance and operational efficiency. Lynx AML Screening empowers payment providers to stay ahead of regulatory changes, prevent financial crime, and build trust with customers and regulators alike.

As the digital landscape evolves, so too must our strategies for compliance. Lynx AML Screening offers PSPs the tools to not only comply but thrive, fostering trust and security in a fast-paced world.

Stay compliant. Stay secure. Protect your business with Lynx AML Screening.

Take the Next Step in Strengthening Your Compliance Strategy

Transform your risk management and compliance operations with Lynx AML Screening. Explore real-world insights into AML risks and mitigation strategies for payment providers in our latest collaboration with Fintrail.

📄 DOWNLOAD the Fintrail White Paper
📽️ WATCH the Webinar Recording

If you’re ready for a deeper conversation after reviewing the insights, our team is here to help.