How Modulr’s risk and compliance operations are scaling with and protecting our customers

Over the past decade, Modulr has grown from a start-up to a global player in automated payments, all the while with an obsessive focus on solving payment problems for our customers. Financial crime tools and technology are no different.

For scaling payment operations, the stakes are high. As transaction volumes grow, the window to catch fraudulent activity narrows. Ensuring you have a basic compliance function or meet regulatory requirements is no longer enough; you must ensure you’re building something that works for customers while also keeping pace with evolving financial threats.

Growing threats in the financial landscape

Financial crime is not a static problem. It is accelerating and evolving, becoming more sophisticated as technology and AI capabilities grow. AI-enabled fraud was projected to drive a 55–60% increase in financial crime incidents last year, while more than 70% of executives globally expect financial crime risk to continue increasing. However, only 23% believe their compliance programmes are 'very effective' at combating it.

For businesses running payroll or supplier payments at scale, the consequences are direct: false positives that delay legitimate payments, compliance friction that slows onboarding, and genuine fraud events that can be costly to unpick after the fact.

Modulr’s Risk & Compliance Hub – built to protect and scale

As our business has grown – and with it our customers, payment volumes, and product complexity – we recognised early that a manual, data-light approach to financial crime operations simply would not scale. It would not serve our customers well, nor would it keep pace with the threats we face.

So, we are building our Risk & Compliance Hub: a connected set of tools and infrastructure that spans the entire customer lifecycle, from onboarding through to ongoing monitoring, focused on keeping customers safe and built to get smarter as we grow.

As part of this, we are constantly scanning the broader ecosystem to ensure we are using the right external platforms to support and strengthen our capabilities. Our recent partnership with agentic risk platform Sardine, as well as with AI-powered identity and fraud prevention platform Alloy, are great examples of how we are integrating future-focused tools to support our operations.

Lower friction, smarter transaction monitoring

Building out this connected Hub has several key benefits for customers.

The first is around better financial crime protection with a centralised view. Our hub brings all the data and insight we have internally into one central place to spot patterns and reduce financial crime before it happens.

Another is faster, lower friction onboarding. KYC (Know your Customer), KYB (Know your Business), and customer due diligence are combined with monitoring that covers all touchpoints through the customer life cycle. For this process Alloy provides an AI-powered identity and fraud prevention platform that supports our onboarding processes end-to-end and will scale with us and our customers.

This process also includes regular random checks, pattern recognition, and transaction monitoring. Which is where Sardine comes in.

Sardine brings a sophisticated, integrated, and data-driven solution that allows us to make more effective use of our internal data in post-transaction monitoring. We chose Sardine because their approach to compliance is built on the same principles as ours: that better data, applied intelligently, produces better outcomes.

Behind customer-facing tools like Sardine and Alloy is a centralised database layer that pulls together everything we know about a customer into a single view. This tool gives us the context we need to make quick calls on transactions and customers, without adding friction into journeys.

And finally, there’s our case management tool designed to help our financial crime operations team work efficiently at scale by logging evidence and maintaining customer history in real time. This is an AI-enabled process that logs evidence, that we are building from the ground up to be operated by a combination of human experts and AI agents.

We are currently using AI to support across a number of different areas, including automating quality check (QC) workflows, enhancing onboarding by streamlining the information captured, and visualising end-to-end fund flows to reduce transaction monitoring workload – with more being built out all the time.

With all these elements, the goal is straightforward: use data thoughtfully, generate better quality alerts, decrease friction, and direct human expertise where it's genuinely needed.

Better protection means better operations

Fraud is identified as the top challenge by more than 70% of payments professionals, with AI-enabled financial crime ranked as the second most pressing concern. Customers and partners want to work with businesses they trust to manage these risks well. Regulators want to see credible, proactive investment. And as real-time payment volumes grow the window to intervene narrows, which means the quality of your tooling and data matters more than ever.

For Modulr’s customers, this investment means more sophisticated controls that generate fewer false positives, faster reaction times when genuine issues arise, and risk management infrastructure that grows with your business rather than becoming a friction point as you scale. For us, it means the ability to keep growing, improving our product offering, and providing an unrivalled customer experience focused on accuracy, control, and reliability.

Want to learn more about how Modulr is built to scale? Get in touch with our payments specialists.