New European regulations require constant monitoring of sanctions, anti-money laundering (AML), and supply chains. Artificial intelligence (AI) is key for meeting these demands, but only when it relies on reliable data.
Compliance teams across Europe face a challenging task: they must work faster, investigate more thoroughly, and provide clearer justifications for their decisions. Many outdated systems lack the speed, capacity, and contextual understanding needed to screen customers, partners, and third parties effectively. The solution is evident: companies now need AI to keep up with these demands, along with high-quality data, expert supervision, and an operational model designed for ongoing risk detection.
Compliance Now Hinges on Speed
Historically, companies focused primarily on the scope of screening. This approach is no longer sufficient. Today’s regulatory system places equal importance on speed.
A prime example is sanctions screening in payments. The EU Instant Payments Regulation mandates that euro transfers reach the recipient within 10 seconds, at any hour. This transforms the economics of screening. In such a rapid payment environment, traditional transaction reviews can cause delays and false positives, necessitating manual intervention. The regulation compels firms to screen payment service users immediately after new sanctions take effect and at least daily.
Read Also: UK Bingo Players Face ID Verification Hurdles
This shift extends beyond payments, reflecting a broader regulatory expectation: compliance programs must identify risks at operational speed. The business impact is clear. Programs that introduce friction, delay onboarding, or slow transactions will increasingly be viewed as commercially unviable.
Compliance is no longer confined to back-office functions. It has become integral to how companies safeguard revenue, maintain client trust, and remain competitive in the market.
Regulators Are Broadening Risk Scope
Additionally, the definition of politically exposed persons (PEPs) is becoming more detailed and full. It now includes not only heads of state and ministers but also party officials, senior judges, central bank board members, ambassadors, high-ranking military officers, leaders of state-owned enterprises, certain local or regional officials, and senior figures in international organizations or equivalent roles in other countries.
A similar trend is evident in supply-chain regulation. The Corporate Sustainability Due Diligence Directive requires large companies to identify, prevent, mitigate, and account for adverse human rights and environmental impacts across their operations, subsidiaries, and business partners. Practically, firms need visibility not only into direct partners but also into suppliers, distributors, and end-customers deeper in the supply chain.
Read Also: Dallas Businesses Adopt Fintech Apps to Enhance Services
AI’s Role and Limitations
Its limitations are evident. For instance, an AI model identified companies linked to a sanctioned entity, while researchers found more and corrected some of the AI’s erroneous identifications. This highlights what generic AI often misses in complex ownership and sanctions analysis: nuance, completeness, and legal defensibility.
Gavin Proudley is a Senior Vice President at Dow Jones. He oversees the strategic direction of the Risk & Compliance business, supporting clients globally in managing regulatory and reputational risks, including AML, bribery, corruption, sanctions, trade compliance, supply chain, and ESG risks.
Building a New Compliance Model
Compliance now requires redesigning the operating model around continuous intelligence. Firms must optimize for both speed and trust, ensuring programs keep pace with risk without sacrificing defensibility.
