By Rasha Abdel Jalil, Director of Financial Crime & Compliance at Eastnets,
As we progress through 2025, financial institutions are operating in one of the most complex regulatory environments the industry has ever seen. New frameworks such as the EU’s Digital Operational Resilience Act (DORA), the Basel 3.1 rollout in the UK, and the upcoming PSD3 are not only increasing compliance obligations, but fundamentally reshaping how banks manage risk, data and operations.
The challenge, however, is not just the volume of regulation. It is the fragmentation, pace and unpredictability of regulatory change. Jurisdictions are moving at different speeds, deadlines are overlapping, and regulatory expectations are constantly evolving. For compliance teams, the result is a landscape where the goalposts rarely stay still.
To remain compliant and competitive, financial institutions must strike a careful balance: staying agile enough to respond to regulatory change while ensuring their compliance frameworks are resilient, scalable and future-ready.
The new reality of regulatory compliance
By October 2025, many financial institutions will face a convergence of major regulatory deadlines, each with distinct scopes and operational impacts. Updated Common Reporting Standard (CRS) obligations now affect more than 100 jurisdictions globally, while Australia’s Prudential Standard CPS 230 introduces new requirements around operational risk and resilience.
In parallel, wide-ranging EU regulations such as the AI Act and the Instant Payments Regulation are redefining how institutions manage data, governance and technology. The Instant Payments Regulation, coming into force in October, places particular emphasis on security and fraud prevention. One key development is Verification of Payee (VOP), which adds an essential layer of protection for real-time payments and directly supports regulators’ focus on instant payment compliance.
Together, these initiatives are creating a compliance environment that is increasingly unforgiving. According to recent research, 75% of compliance decision-makers in Europe’s financial services sector say regulatory demands on their teams have increased significantly over the past year. Many organisations are struggling simply to keep up.
Why adapting to regulatory change is so difficult
The difficulty lies in a combination of structural, operational and human challenges.
In many organisations, compliance data remains fragmented across departments, jurisdictions and legacy systems. Traditional compliance models, built on periodic reviews, static controls and manual processes, are no longer sufficient. Yet internal resistance to change often slows transformation, reinforcing outdated approaches just as regulatory pressure intensifies.
At the same time, the industry is facing a growing compliance talent gap. As regulations become more complex, the skills required to manage them are evolving rapidly. Experienced professionals are retiring in large numbers, while many new entrants lack the practical expertise needed to step into critical roles. As AI becomes more embedded in investigative and decision-making processes, demand for technical fluency within compliance teams is rising faster than organisations can upskill.
The result is overstretched teams, limited resources and continued reliance on tools and processes that are no longer fit for purpose.
Staying compliant in a shifting landscape
Despite these challenges, the current environment also presents an opportunity. Institutions that treat compliance as a strategic, technology-enabled capability, rather than a reactive obligation, can build a stronger foundation for long-term resilience.
Real-time visibility and continuous monitoring
Modern compliance starts with real-time insight. As regulatory timelines tighten and enforcement becomes more proactive, institutions can no longer rely on retrospective reviews. They need systems that identify compliance risks as they emerge through continuous monitoring, automated alerts and dynamic reporting.
Interoperability and unified data
Visibility alone is not enough. To act effectively, compliance teams need interoperability across systems and functions. A modern compliance architecture should consolidate data from multiple platforms and jurisdictions into a unified case management framework, enabling cross-regulatory reporting, consistent governance and faster responses to regulatory change.
AI-driven compliance and risk detection
To manage complexity at scale, many institutions are adopting AI-powered compliance tools. Traditional rules-based systems often generate high volumes of false positives, overwhelming teams and reducing effectiveness. AI models, by contrast, can learn from historical patterns, detect subtle anomalies and adapt to evolving fraud and financial crime typologies.
When combined with intelligent alert triage, AI can suppress low-value alerts and prioritise genuinely high-risk activity, allowing investigators to focus where it matters most. More advanced approaches, including deep learning, can identify behavioural shifts and suspicious network relationships, offering a multi-dimensional view of risk that static systems cannot provide.
Transparency, explainability and regulatory trust
As regulations such as the EU AI Act place greater emphasis on explainability, transparency is critical. Every AI-driven decision must be auditable and understandable. This requires clear justifications, detailed logs, and visual tools such as link analysis to support human oversight and regulatory confidence.
Automation to support scale and consistency
Automation continues to play a vital role in modern compliance strategies. Automated sanctions screening and watchlist monitoring help institutions maintain accuracy and consistency across jurisdictions, particularly as lists change rapidly in response to geopolitical developments.
Automated regulatory reporting also enables teams to adapt more quickly to evolving frameworks, including the global adoption of ISO 20022. Its structured data requirements demand upgraded systems and stronger data interoperability, making automation essential for both compliance and operational efficiency.
Importantly, automation and AI also help mitigate the ongoing talent shortage, allowing less experienced teams to operate more effectively while focusing human expertise on complex, high-value tasks.
The future of compliance
In an increasingly fragmented regulatory world, compliance can no longer be treated as a tick-box exercise. It must evolve into a dynamic, intelligence-led capability that enables institutions to manage risk proactively, respond to regulatory change with confidence, and operate seamlessly across jurisdictions.
Achieving this requires a fundamental rethink of how compliance is structured, resourced and embedded within financial operations. Institutions that invest in the right technologies, data foundations and skills today will be far better positioned to meet regulatory expectations tomorrow – and to turn compliance into a source of resilience rather than risk.