When it comes to business, accountability can be both a blessing and a curse. While it might be a burden for providers, when successfully delivered it becomes a strong selling point to satisfy – and reassure – customers, clients and partners.
This is particularly true for banks, as they are responsible for managing and overseeing people’s money and financial activity. For institutions, taking bigger responsibilities means increased costs, as well as reviewing and changing established ways of operating and doing business. But in the eyes of customers and account holders, such effort becomes a clear sign of the provider’s commitment to protect their finances and interests.
Being able to trust their bank is becoming increasingly important for consumers, especially with the evolving threats of elaborate financial crimes: scammers are more organised, tech-savvy and sophisticated.
Thankfully, industry and authorities recognise the danger and the need to act accordingly, promoting prevention over intervention while also providing regulatory guidance.
Looking out for customers: PSD3 & PSR
The European Union’s regulatory package combining PSD3 and the Payment Services Regulation (PSR) is coming into force this summer, with expectations for banks to be fully compliant by mid-2027. This new European payment framework focuses on the fight against financial fraud, with clear indications and call to action for banks and payment institutions.
The main drive of the PSR regulation is consumers’ protection, introducing measures aimed at strengthening detection and prevention while also outlining banks’ responsibilities and duties. From establishing mandatory reimbursement to actively encouraging the adoption of Artificial Intelligence, PSD3/PSR has the potential to become one of the biggest trust-building exercises for the banking sector, as shown by similar requirements already introduced in the UK system in 2024 to incentivise prevention and enhance protection.
Prevention and intervention, a call to action
The change introduced by the regulation is intentionally profound and structural, shifting fraud prevention as a risk-management capability to an explicit legal obligation through a series of specific actions. For example, with incoming payments showing clear signs of fraud or mule activity, the receiving institution may be required to block or return the funds, triggering the need for new intervention and investigation processes.
Banks will be required to monitor outbound and inbound payments in real time. Monitoring incoming flows is one the most significant new requirements, as it directly addresses the issue of money mules while enabling institutions to identify accounts used as transit points for stolen funds before those funds are moved onwards.
A strong customer authentication system alone will no longer be enough to limit a bank’s liability. Institutions will need to prove that they monitored, assessed and justified their decision, and bank impersonation scams may trigger mandatory reimbursements.
Alongside these and other specific operational requirements and duties, PSD3/PSR bring forward a less technical but equally important responsibility: knowledge and information sharing. Banks will have to improve customer awareness of emerging scams and participate in fraud-intelligence-sharing arrangements between institutions, while also taking ownership of dedicated staff training and taking particular care of vulnerable customers.
Scaling financial crime prevention with AI
Regulations aiming to counter financial crime have to match the growing complexity of the threat. The introduction of online banking, digital onboarding and financial services have created more opportunities for fraudsters, and the risk has further increased in the past few years with the widespread adoption of Artificial Intelligence. In the hands of this new type of criminal, AI is a powerful tool that can trick experienced professionals, customers and institutions.
The PSD3/PSR regulations fully embrace this evolving issue by explicitly highlighting the use of AI to match the scope of the threat. This acknowledgment introduces an important shift in the fight against financial crime, showing that rules-only approaches are likely to become insufficient against regulatory expectations and will have to be supported by technological implementations.
The expected challenges are both technical and operational: fragmented data environments, instant-payment latency constraints, reimbursement investigations, false-positive management and explainability requirements. Financial institutions looking to take these on might find the task daunting, too complex or costly, but they don’t have to do this alone.
Relying on the services of external providers that have the knowledge and skills to deploy AI-driven solutions and the experience from having done this in the UK, particularly designed for the banking and finance industry, is the key to a fast and effective technical implementation that would guarantee consistency and compliance while also fulfilling the new regulatory requirements.
Turning compliance into trust
Delivering on the promise of accountability is not easy. Fraudsters are constantly adapting their approach, finding and exploiting weaknesses in creative ways leaving customers and banks with the challenge of identifying genuine suspicious activities, and separating this from simple mistakes and false positives. At times, the risk is also to undermine the sense of confidence and trust that fraud prevention aims to create with excessive warnings, overcommunication, and unnecessary friction.
This is where AI becomes a critical resource. Financial institutions need tools that can enhance prevention capabilities, unlocking behaviour analysis, and real time monitoring. AI enables the identification of patterns and red flags to watch out for, allowing the bank to adapt to the evolving attacks while remaining flexible enough to adjust to changing regulatory and operational requirements. The goal is not only to detect more fraud, but to make better decisions with less friction for good customers
Accountability is no longer something that happens behind the scenes: not only it can become visible to customers, but it should be proudly presented as a tangible demonstration that the bank is on the customer’s side. PSD3/PSR does encourage banks to ask a crucial and valuable question: do my customers know that we are accountable for protecting them?
Institutions that can give a positive answer have the opportunity to demonstrate how to turn compliance into a differentiating factor. As payments become faster and scams more sophisticated, trust may be one of the few advantages that customers can truly recognise.