Regulatory and compliance risk has never been more consequential for the financial services industry. From sweeping consumer protection mandates to escalating exam scrutiny and rapid-fire regulatory change, compliance leaders are being asked to do more than ever before with greater accuracy, speed, and transparency. For chief compliance officers, chief risk officers, regulatory relationship leaders, and their teams, the pressure is not simply to keep pace. It’s to build compliance programs that are resilient, defensible, and ready for what comes next.
In this two-part blog series, part one explores the key drivers of regulatory compliance risk, while part two outlines how to build more resilient, future-ready compliance programs.
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Why regulatory compliance risk is at the top of the agenda
Financial institutions must innovate at speed while effectively managing regulatory compliance risk and strengthening operational resilience. For global financial services providers and adjacent institutions, this challenge is compounded by the need to align compliance frameworks across jurisdictions.
Several converging forces have elevated regulatory and compliance risk to a board-level concern across the financial services industry:
- A reorientation of regulatory focus – not a relaxation: The current regulatory environment reflects a recalibration toward lighter-touch regulation and a risk-based approach, but compliance leaders should not mistake this for reduced scrutiny. The Office of the Comptroller of the Currency (OCC), Federal Deposit Insurance Corporation (FDIC), and Federal Reserve have each signaled a renewed emphasis on material risks and consumer “safety and soundness” execution—with Matters Requiring Attention (MRAs) framework revisions and supervisory rating changes designed to concentrate regulatory attention where it matters most. Institutions that respond by loosening compliance infrastructure rather than re-prioritizing it are misreading the moment.
- Rapid regulatory change and new entrants: The volume and velocity of new rules, guidance, and enforcement actions have made regulatory change management a strategic capability rather than an administrative function. Consumer protection regulations (Unfair, Deceptive, or Abusive Acts or Practices (UDAAP), fair lending, Fair Credit Reporting Act (FCRA)), digital banking requirements, and emerging rules around AI-driven products are creating compliance obligations that cut across every business line. Fintechs, BaaS investments, and tech-driven financial services are driving demand for guidance on meeting U.S. regulatory marks. The Consumer Financial Protection Bureau’s (CFPB) recent de-prioritization of certain BNPL enforcement in payments is a case in point: the underlying consumer protection risk hasn’t gone away—it has simply shifted, and compliance programs that don’t track and respond to that shift remain exposed.
- AI governance as a regulatory imperative: Rapid AI adoption across financial services is outpacing existing risk and compliance frameworks, prompting heightened scrutiny of AI-driven functions. Regulators across the Securities and Exchange Commission (SEC), OCC, Financial Stability Oversight Council (FSOC), and Financial Industry Regulatory Authority (FINRA) have each named AI governance as a top 2026 examination and supervisory priority. Expectations are specific: model explainability, robust data lineage, auditability of technology-driven decisions, and evidence that AI-assisted processes are accurate and fair. Institutions that have deployed AI in customer-facing or risk management functions without a corresponding governance framework are carrying material regulatory exposure.
- Consumer protection focus: The regulatory spotlight on fair banking, fair lending, and transparency in customer interactions has intensified. Federal fair lending deregulation is shifting enforcement to states attorneys general who are helping to bridge the regulatory oversight gap. Institutions must demonstrate that their products, services, and customer-facing processes treat consumers fairly—across the entire product lifecycle. Regulators are placing particular emphasis on marketing practices, fee transparency, investment suitability, and oversight of digital and influencer-driven channels.
- Intensifying exam scrutiny and remediation backlogs: Regulators have sharpened their expectations for compliance program maturity, documentation quality, and management accountability as evidenced by recent enforcement actions and supervisory guidance from the OCC, FDIC, CFPB, and Federal Reserve. Additionally, many institutions are managing legacy findings from prior exams alongside emerging risk areas, creating competing demands for compliance resources and increasing the risk of chronic, unresolved issues. Institutions that cannot demonstrate a robust, evidence-based compliance infrastructure that prioritizes timely remediation face heightened risk of MRAs, Matters Requiring Immediate Attention (MRIAs), consent orders, and supervisory commitments.
- Digital assets and financial crime enforcement: Recent regulator activity continues to signal that digital asset compliance is firmly in enforcement territory and under heightened scrutiny. Across the Financial Crimes Enforcement Network (FinCEN), Commodity Futures Trading Commission (CFTC), and OCC, regulators are scrutinizing AML program effectiveness, SAR quality, sanctions controls, and the compliance readiness of institutions engaging with crypto intermediation, tokenized collateral, and digital payment platforms. For institutions with any digital asset exposure, digital asset risk must be identified, prioritized, and remediated before implementation.
Taken together, these pressures mean that compliance is no longer a back-office function. It is a core operational discipline that demands dedicated leadership, scalable infrastructure, and a commitment to building future-ready compliance organizations.
Stay tuned for part two, where we’ll explore how to address these pressures and build resilient, future-ready compliance programs.
To start transforming your institution’s approach to regulatory and compliance risk, contact CrossCountry Consulting