For years, many lenders operated on the assumption that strong onboarding controls and sensible handling of suspicious cases would satisfy regulators.
According to Salv, if customers were screened at the start of the relationship and unusual activity was escalated when spotted, that was considered sufficient. Across Europe, however, that baseline is no longer enough.
Regulatory expectations for lenders and lending-adjacent firms are now converging with those applied to banks. Supervisors increasingly assess these organisations against bank-level financial crime standards, even though lenders often lack the same scale, staffing, and compliance infrastructure. The shift reflects a broader regulatory push for consistency across the financial system, placing lenders under far greater scrutiny than before.
Supervisors are no longer satisfied with point-in-time checks. They expect continuous oversight supported by clear documentation, scenario-based transaction monitoring, and decision-making that can be justified in detail. For lenders, this represents a structural change in how financial crime programmes must operate, moving from reactive controls to proactive, ongoing risk management.
As a result, many firms are reassessing their approach. Instead of relying on fragmented screening tools or manual reviews, lenders are increasingly looking to connect monitoring, investigations, and documentation into a single workflow. The aim is to make decisions faster, explain them more clearly, and defend them with confidence when regulators ask questions.
One Salv customer has experienced this change directly. Compared with a year ago, the firm is now facing far more detailed transaction monitoring questions from its local regulator. “It’s not enough anymore to say we monitor transactions,” explains the firm’s AML lead. “Now they want to know how. What scenarios we run. Why those make sense for our business. And what we do when something triggers.”
Regulators are also pushing lenders to align monitoring more closely with real-world financial crime typologies. Onboarding checks alone are no longer sufficient. Authorities expect continuous monitoring of the customer base alongside robust transaction verification, ensuring risk is identified and managed throughout the entire customer lifecycle.
These demands place particular strain on smaller teams. Another lender reports having just five specialists responsible for financial crime compliance across multiple regulated entities. Each business line carries a distinct risk profile, from payment accounts to crowdfunding models where funds flow through projects rather than individual balances. Suspicious activity may involve circular transactions, related-party behaviour, or attempts to legitimise funds through repayments or investments. Yet all of this must be documented and controlled consistently.
Increasingly, transaction monitoring has become the main battleground. While onboarding remains important, supervisors are focusing on how monitoring works in practice. Many lenders still rely on fragmented systems that generate large volumes of low-quality alerts. This creates two problems: genuine risks can be missed in the noise, and teams waste time clearing alerts that pose little threat. As one AML lead put it, “They’re asking for a different level of specificity. It’s no longer acceptable to rely on broad rules and judgement alone.”
The cost of standing still is rising. Manual processes slow investigations, alert fatigue increases inconsistency, and responding to regulatory requests becomes harder. For lenders already under margin pressure, the challenge is meeting bank-level standards without slowing the business down. Much of the risk now lies in defensibility, not just action, but the ability to prove decisions were structured, reasonable, and repeatable.
In response, many lenders are moving towards continuous oversight. Screening, monitoring, and investigations are increasingly treated as part of a single, end-to-end process. This provides greater context, improves understanding of counterparties and behavioural patterns, and reduces manual workload by filtering out obvious low-risk cases. Collaboration also plays a growing role, particularly during sanctions investigations, where secure data sharing can speed up decisions while maintaining audit trails.
Regulatory pressure is unlikely to ease. Expectations for lenders will continue to rise as authorities seek consistency across the financial system. For many firms, all-in-one financial crime platforms that combine screening, monitoring, and intelligence sharing are becoming a practical route to meeting bank-level standards without excessive cost. Those that adapt early will be better positioned to engage constructively with regulators and operate with confidence built on clarity.
Copyright © 2026 RegTech Analyst
Copyright © 2018 RegTech Analyst
