Instant payments are becoming more common in banking services – FIN-FSA recommends stronger practices to prevent fraud

According to the FIN-FSA’s thematic review, banks’ instant payment services are mainly implemented well. Instant credit transfer services are available in almost all euro-denominated payment accounts and in key service channels, such as online and mobile banking. The execution of payments within the 10-second deadline is overall at a good level. 

There are shortcomings and development needs in security practices, however, particularly in customer communication regarding instant credit transfers and fraud prevention. The FIN-FSA therefore recommends in its thematic review several different measures by which the financial sector can improve consumer security in banking services. The recommendations concern security limits, the payee verification service, and fraud monitoring undertaken by banks.  

Due to faster payments, the FIN-FSA recommends that banks communicate more actively about the importance of security limits and ensure that security limit options are equally comprehensive for both instant and standard credit transfers. In addition, banks should introduce operating practices that require new customers to set their own security limits.

 “Clearly communicated security limits are one means to prevent abuse. Banks would do well to ensure that customers understand their significance and set limits that suit their own needs when taking a service into use,” says Marko Myller, Head of Department, Banking Supervision.

Shortcomings in payee verification service

Since October 2025, all banks in the euro area must be able to send instant credit transfers, and a requirement to match the payee’s name and account number came into effect for all credit transfer-based payments. The verification of payee information introduced by the Instant Payments Regulation is an important reform aimed at preventing incorrect payments and fraud, thus improving payment security. 

 “There are differences in the implementation of the payee verification service, particularly in how information is presented to customers in situations where the payee’s information does not match. In these situations, the customer should always be given a clear warning that accepting the payment may result in the funds being transferred to the wrong recipient. In our view, customer communication at all banks does not meet regulatory requirements and does not always support the customer’s informed decision-making when confirming a payment,” says Myller. 

Fraud monitoring better, but still room for improvement

Real-time fraud monitoring is a key part of payment security. Most banks utilise analysis methods based on customer payment behaviour and are also able to automatically block suspicious payments. The FIN-FSA recommends that banks further develop monitoring so that suspicious payments can be blocked on a risk basis and automatically, and that the use of customer credentials can also be blocked in real time in critical situations.

 “Banks must pay particular attention to security when the identification application is taken into use so that the most serious abuses can be effectively prevented. Particularly in situations where an application is taken into use on a new device, additional security and control mechanisms that a cybercriminal cannot circumvent must be applied,” says Myller. 

The FIN-FSA’s review examined, among other things, the availability and smoothness of instant credit transfer services, management of security limits, the payee verification service and fraud monitoring. The thematic review focused on instant and standard credit transfer services for retail customers and covered nine banks. In addition, the thematic review separately surveyed banks’ sanctions screening procedures insofar as they relate to the new obligations of the Instant Payments Regulation. The FIN-FSA will monitor the correction of shortcomings identified in its thematic review.

The recommendations issued in this supervisory release supplement the recommendations provided in the supervisory release published in 2025.

Links

Supervision release 26 May 2026: Banks’ instant payment services are largely functioning well – deficiencies and areas for improvement remain particularly in customer communication and fraud prevention(in Finnish)

Contacts

For further information, please contact Sanna Atrila, Chief Legal Advisor, Banking Supervision. Requests for interviews are coordinated by FIN-FSA Communications, tel. +358 9 183 5030, Mon-Fri 9.00–16.00.