Singapore’s position as a major financial hub places significant responsibility on its payments sector to prevent illicit finance from flowing through the system.
Anti-money laundering and countering the financing of terrorism (AML/CFT) rules have become increasingly stringent as the MAS continues to align with evolving global standards, claims Flagright.
Concern around complex financial crime is rising, with MAS’s 2024 national risk assessment pointing to a sharp increase in cyber-enabled fraud, misuse of shell companies, trade-based money laundering, and cross-border payment risks across digital channels.
These concerns are not theoretical. In June 2025, MAS imposed S$960,000 in penalties on five payment institutions for AML/CFT control failures. It was the first public enforcement action against payment service providers for AML breaches under the Payment Services Act, marking a turning point for supervision of the sector. Investigators found weaknesses including missing watchlist checks, poor verification of beneficial owners, and insufficient oversight of AML procedures. MAS emphasised that such failures expose companies to criminal abuse and insisted that senior management must ensure strong AML/CFT controls. In Singapore’s rapidly expanding payments landscape, real-time AML is no longer optional, but a core regulatory expectation.
Payment processors operating as Major Payment Institutions face robust compliance obligations under MAS Notice PSN01, covering customer due diligence, transaction monitoring, suspicious transaction reporting and risk assessments. Singapore also follows guidance from the Financial Action Task Force (FATF), meaning local AML programmes must meet international benchmarks. In April 2025, MAS proposed further reforms to incorporate proliferation financing risk into AML assessments, signalling that compliance frameworks must be more sophisticated and more responsive to emerging threats.
Faster payments technology has increased the importance of real-time controls, as criminals can route funds across multiple jurisdictions in a matter of seconds. Regulators are clear that institutions must detect and escalate suspicious activity immediately, not hours or days after transactions have been processed. Real-time monitoring and screening has therefore become a central expectation, with compliance teams reporting that immediate alerts are “essential for effective compliance and fraud prevention.”
However, achieving real-time AML remains difficult for many firms. High transaction volumes, fragmented cross-border payment data and legacy systems slow response times and increase alert backlogs. Older systems often produce false positive rates of around 90%, placing strain on analysts and delaying legitimate payments. Rule changes and new screening requirements can take months to implement, leaving organisations exposed to evolving crime patterns.
Modern AML technology is transforming how payment firms manage these risks. Real-time transaction monitoring, automated sanctions screening, dynamic risk scoring and integrated case management systems are designed to detect suspicious activity in flight. AI-powered analytics, sometimes called AI forensics, help identify hidden behavioural patterns and reduce false positives by enriching alerts with additional data. Payment firms using advanced RegTech platforms report major improvements in operational efficiency, reduced compliance costs and fewer missed risks. As one compliance leader noted, intelligent monitoring has “significantly reduced false positive alerts and enabled us to concentrate on genuine issues.”
Real-time AML is also becoming a commercial advantage. Strong controls support faster onboarding, smoother payment flows and closer partnerships with banks and regulators. Cloud-native systems can scale with transaction growth, supporting companies expanding across Southeast Asia and beyond.
As Singapore strengthens its leadership in digital payments, AML compliance has become a strategic priority. The organisations that succeed will embed real-time monitoring, invest in modern compliance technology and ensure senior management drives a strong culture of accountability. Those that fail to modernise face fines, reputational damage, regulatory restrictions, and operational disruption.
Real-time AML is no longer a technical upgrade, but a defining capability for the future of Singapore’s payments ecosystem. With financial crime increasingly complex and instantaneous, payment processors must move just as fast.
Copyright © 2025 RegTech Analyst
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