Every twelve minutes, a new regulation or update lands somewhere in the global financial system.
For one of Dutch’s largest banks, that constant pace of change came to a head after a €770 million fine related to AML compliance failures. The penalty wasn’t just a financial loss; it was a wake-up call.
It revealed how complex and fragmented compliance had become: a maze of documents, local interpretations, and manual updates that couldn’t keep up with regulatory speed. The fine made it clear that being compliant on paper wasn’t the same as being demonstrably compliant in practice.
From that moment, the institution began rethinking everything including how regulations were interpreted, how obligations were tracked, and how evidence of compliance was maintained.
Across the sector, many institutions still feel protected by established procedures and trusted audit partners. Compliance appears under control, until growing regulatory complexity begins to expose how fragmented those safeguards really are.
4 regulatory shifts redefining financial compliance
- Regulatory traceability
- Operational resilience under DORA
- AI Explainability
- ESG Compliance
1. Regulatory traceability
Regulatory oversight is evolving from checking outputs to examining the logic behind them. Supervisors now expect firms to demonstrate exactly how regulations are interpreted, implemented, and maintained within daily operations. Yet many institutions still rely on document-driven processes, fragmented systems, and manual updates. When regulators ask for end-to-end traceability from legal text to system control, these silos make the story difficult to follow. The result is growing exposure, not from a lack of effort, but from a lack of visibility.
What to do: To keep up, organizations need to move beyond static documentation and build a single, connected view of compliance. By mapping regulatory obligations to policies, controls, and processes within a single digital structure, they can create a clear audit trail of every decision and update. This approach turns regulation into an operational thread that is traceable, explainable, and ready for scrutiny at any time.
2. Operational resilience under DORA
The Digital Operational Resilience Act (DORA) is redefining what resilience means in finance. It requires institutions not only to recover from incidents but to prove continuous oversight of their systems, third-party dependencies, and risk responses.
For many, this exposes a major gap: resilience reporting often stops at the surface, while interdependencies between processes remain hidden. As disruptions grow more complex, regulators want to ensure that operations can withstand and adapt, not just react under pressure.
What to do: Resilience now needs to be built into the fabric of compliance. Financial institutions should map critical functions and dependencies, automate incident detection and reporting, and integrate resilience metrics into governance dashboards. The goal is real-time awareness to identify vulnerabilities before they escalate and to demonstrate control even while systems are under stress.
3. AI Explainability
AI is no longer something new for financial institutions. It already underpins critical processes such as onboarding, fraud detection, credit scoring, and transaction monitoring. Yet as its use becomes more embedded in decision-making, regulators are shifting focus from innovation to accountability.
In their 2024 joint report on The Impact of AI on the Financial Sector and Supervision, the AFM and De Nederlandsche Bank (DNB) emphasized that while AI offers clear efficiency gains, it also introduces new risks related to explainability, bias, and governance. Supervisors across Europe are beginning to expect the same level of oversight for algorithms as they do for traditional financial models.
The upcoming EU AI Act will formalize this expectation. Institutions will be required to classify, test, and document AI systems, ensuring that outcomes remain traceable and that humans retain ultimate responsibility for automated decisions. AI is no longer a side innovation; it’s part of the compliance perimeter.
What to do: AI governance must become an integral component of the control environment. Institutions should maintain transparent documentation of model inputs and decision logic, regularly validate AI systems for fairness and bias, and define clear procedures for human review. Ensuring explainability and accountability in AI-driven operations will be essential to maintaining both regulatory compliance and customer trust.
4. ESG compliance
Sustainability has moved from aspiration to obligation. Under frameworks like the Corporate Sustainability Reporting Directive (CSRD), ESG metrics are now regulated data points subject to the same accuracy and audit expectations as financial figures.
For many institutions, ESG reporting remains isolated, disconnected from the systems that manage risk and compliance. Regulators are closing that gap, expecting firms to show how their sustainability performance is linked to governance, strategy, and accountability.
What to do: Integrate ESG obligations directly into compliance and risk frameworks. Map sustainability requirements to controls, document data lineage, and align disclosure processes with existing financial reporting. By embedding ESG into the same traceable structure as financial regulation, institutions can ensure consistency, reliability, and regulatory confidence across both domains.
The big opportunity: RegTech
The role of RegTech in financial services has evolved from a supportive to strategic one. In today’s rapidly evolving regulatory environment, compliance can no longer depend on manual interpretation or fragmented systems. RegTech now forms the backbone of continuous compliance, connecting regulations to data, automating updates, and providing the transparency regulators expect.
One of our partners, a major Dutch bank, adopted a RegTech-driven compliance framework to bring structure and speed to its regulatory management. Within the first year, it reduced the time spent interpreting and mapping regulations to controls by 60% and gained the ability to demonstrate compliance across jurisdictions in real time. What began as a response to enforcement pressure became an opportunity to rebuild trust and resilience across the organization.
For the broader industry, this marks a shift from compliance as an obligation to compliance as a capability. Financial institutions that invest in RegTech are not only managing regulation more effectively but are also positioning themselves to anticipate change, contain risk, and turn compliance into a lasting competitive advantage.
What financial institutions must prepare for 2026?
Across the financial sector, a new phase of regulation is emerging – one defined not by documentation but by demonstrability. The institutions that thrive will be those that turn compliance into an operational capability: connected, explainable, and verifiable at any time.
As 2026 approaches, this transformation is becoming unavoidable. The regulatory environment will continue to accelerate, demanding traceability, resilience, and transparency at a level few organizations have yet achieved.
Discover how Be Informed enables financial institutions to transform complex regulations into actionable, transparent processes, laying the groundwork for ongoing compliance and enduring trust.
