Beyond borders, beyond rules: A practitioner’s perspective on the realities of financial crime compliance in cross-border payments
Abstract
Cross-border payments compliance has undergone an intense period of disruption as international regulatory reform, the evolving sanctions environment and the rapid adoption of artificial intelligence and digital assets have converged to reshape the obligations facing financial institutions and their supervisors. This paper maps developments such as the Financial Action Task Force’s mutual evaluation agenda and update to the Travel Rule, the Group of Twenty and Financial Stability Board Cross-Border Payments Roadmap, the EU’s Sixth Anti-Money Laundering Directive and new Anti-Money Laundering Authority, and the Financial Crimes Enforcement Network’s proposed overhaul of US anti-money laundering and countering the financing of terrorism programme requirements, and traces their impact across the payments ecosystem. It finds that, despite a decade of coordinated policy intervention, correspondent banking services are continuing to withdraw from higher-risk jurisdictions; financial crime and fraud are converging within real-time payment rails faster than the monitoring infrastructure can adapt; enforcement activity has intensified sharply, particularly against digital asset platforms; and that geopolitical fragmentation, reflected in the development of alternative settlement systems, is reshaping payment infrastructure along political as well as technical dimensions. These outcomes reflect three structural weaknesses: incomplete and unstructured transaction and beneficial ownership data, particularly at the boundary with decentralised finance; a widening gap between the pace of artificial intelligence adoption and the governance and examiner capacity needed to oversee it; and supervisory capacity that has not scaled with an expanding regulatory agenda. The paper concludes that closing these gaps, through structural reforms such as ISO 20022 migration and interoperable Travel Rule solutions, closer international and domestic regulatory collaboration, and a more candid reckoning of the risks associated with financial modernisation, is a precondition for compliance efforts to become genuinely effective rather than merely defensible. This article is also included in the Business & Management Collection which can be accessed at http://hstalks.com/business.
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Author's Biography
Michele M. Fleming is a growth-focused executive with extensive regulatory, compliance, risk management and governance expertise. A multifaceted subject matter expert in financial services and the payments space, Michele builds consensus and serves as a strategic partner to the C-suite and board of directors with respect to regulatory compliance with US and non-US regulatory authorities. She is regarded as the foremost expert in designing and implementing global compliance programmes. She holds multiple credentials in corporate and risk governance including the Qualified Risk Director® designation. She is a Member of the New York State Bar, and completed the Certificat d’Aptitude à la Profession d’Avocat in France.
