In today’s fast-changing regulatory world, AI is a major topic in compliance, and it’s easy to see why. Machine learning and automation help analyse large amounts of data, spot patterns, and flag risks quickly.

AI is helpful, but it can’t replace human judgment, practical insight, or the real-world experience needed for AML compliance. The risks are clear: in 2024, TD Bank was fined a record $1.3 billion by FinCEN for failing to maintain an effective AML programme, even though they had automated systems. The lesson is simple: automation alone doesn’t mean compliance.

That’s why Neopay Global’s Virtual Compliance Service (VCS) focuses on people, not just technology.

Here’s why people are still essential.

  1. AI needs clean data, but criminals don’t play fair

AI is only as good as the data it learns from. In AML compliance, this includes past transaction records, known threat types, and clearly marked suspicious activity. But money laundering methods keep changing. By the time AI learns one pattern, criminals may already be using another.

Worse still, criminal transactions are often designed to mimic legitimate activity. This means they can slip through algorithmic cracks, especially if no similar cases exist in the training data.

This is where human expertise matters. Experienced compliance professionals can judge intent, spot unusual patterns in context, and adjust quickly to new risks. AI needs retraining to do the same.

  1. Regulations are grey, not just black and white

AML and BSA rules are often unclear or open to interpretation, and they differ widely between regions. AI has trouble with these grey areas. It can flag what looks suspicious, but it can’t understand intent, business models, or risk appetite like a trained professional can.

Our VCS team goes beyond simple rule-based logic. We help clients understand how regulations apply in practice and what that means for their specific operations. We offer clarity, not just compliance.

  1. False positives and negatives: the hidden cost

AI systems are powerful, but not perfect. Some AML monitoring tools have false positive rates over 95%. This means teams waste time and money on cases that lead nowhere, using up resources and slowing down real work.

False negatives—cases marked as safe that should have been checked—are even riskier. They can lead to fines, damage your reputation, or cause bigger problems.

FinCEN enforcement actions, like TD Bank’s $1.3 billion penalty, show that even banks with advanced automated systems can fail if they don’t match automation with real oversight and good workflows.

At Neopay Global, our Virtual Compliance Service uses automated tools when they help, but always includes expert human review. We improve detection, check alerts, and use professional judgment. This way, you get clear results and don’t miss anything important.

  1. Legacy systems and integration challenges

Many financial institutions still use old or disconnected systems, which are hard for AI tools to work with. Even when it’s possible, setting up and running advanced AI can be expensive and take a lot of resources, especially for smaller firms or those making changes.

Our VCS service gives you a simpler, smarter option. We combine expert oversight, practical tools, tailored advice, and industry experience, all without needing a big technology upgrade.

  1. Good judgment can’t be automated

AI uses logic, data patterns, and risk scores, but it lacks one important thing: judgment.

In real-world compliance, decisions aren’t always black and white. Grey areas are common. Is this transaction a legitimate anomaly, or a hidden red flag? Is this client a genuine high-risk individual, or simply operating in a misunderstood sector?

Human compliance experts use intuition and experience, and they know which questions to ask. They look at what’s happening and why, and they understand context in ways AI can’t.

Our VCS is more than just tools. You get ongoing access to senior compliance professionals who work with your team, giving you insight, clarity, and confidence when you need it.

  1. Cybersecurity and privacy risks

AI can also be a target. Attacks like model poisoning and data breaches create new risks, especially when dealing with sensitive customer data.

You also need secure data pipelines, strong privacy controls, and protection from constant cyber threats. Relying only on AI adds another layer of risk.

With VCS, you stay in control. There’s no guessing. You get clear, steady guidance from a team that understands your regulatory needs and cares about your data security.

The five pillars of AML compliance

Regulators expect every AML programme to be built on the Five Pillars of Compliance. Here’s what each one involves — and how Neopay Global helps you meet it:

  1. A designated compliance officer
    Every firm must have a compliance officer who is accountable for the AML programme. This person needs deep knowledge of regulations, industry practices, and risk management.
    Neopay Global provides access to senior compliance professionals who can act as your designated officer or support your existing team, ensuring expertise is always available when you need it.
  2. Risk assessments
    Institutions must understand their exposure to financial crime risks based on products, services, customers, and geographies. These risks must be regularly reviewed and updated.
    Our team helps design and perform thorough risk assessments, giving you a clear, practical picture of where vulnerabilities lie — and how to address them.
  3. Robust internal controls and policies
    Written policies and procedures must align with your operations, embedding compliance across teams and systems. They must be practical, enforceable, and regularly updated.
    We review, draft, and implement policies tailored to your business model, making sure your controls are effective, up-to-date, and understood by your staff.
  4. Regular monitoring and audits
    Independent monitoring and audits are essential for identifying weaknesses and proving compliance to regulators. These go beyond financial audits, focusing specifically on AML obligations.
    Neopay Global conducts independent audits and ongoing monitoring, providing actionable recommendations that strengthen your programme and demonstrate due diligence.
  5. Customer due diligence (CDD and EDD)
    Institutions must know their customers, understand their risk profiles, and apply Enhanced Due Diligence (EDD) where needed. This is critical for spotting suspicious activity early.
    We support your onboarding and monitoring processes, helping you design effective CDD/EDD frameworks that meet regulatory standards while staying proportionate and efficient.

Automation can help with these pillars, but it can’t replace them. FinCEN enforcement actions show that even the biggest institutions with advanced systems have failed when they ignored oversight and accountability.

At Neopay Global, our AML professionals are industry experts. We help clients match automated systems with human oversight and the Five Pillars, making sure compliance frameworks are effective and resilient.

Real results, real support

“Neopay Global consistently goes beyond just conducting an audit; they truly take the time to understand our business and operations. During both our US and Canada audits, this approach meant we received recommendations that were actually relevant to what we do, rather than generic findings.”
— Payfare

The bottom line

AI can help with compliance, but it can’t replace people. To meet your BSA/AML obligations, protect your business, and avoid becoming the next enforcement headline, you need more than algorithms. You need experts who understand the regulations and how to apply them.

Neopay Global’s Virtual Compliance Service gives you exactly that: expert audits, unlimited support, legal updates, and tailored advice, all for a fixed monthly fee.

See how our VCS can help your business here.