Top Compliance Issues In 2025

Cyberattacks are likely to focus on extortion, critical service disruptions, and massive data theft. Employees and customers should be informed about the ease with https://officialbet365.com/ which all devices can be compromised. The UK has finalized the Sustainability Disclosure Requirements, investment labeling regime, and its anti-greenwashing rule while moving forward on changes to the new Listing Rules. Also, the UK government is reviewing the ISSB sustainability reporting standards, and the FCA plans to consult on incorporating these standards into its existing climate-related disclosure rules for listed issuers. Although AI tools have been used in financial services for years, 2023 saw a significant acceleration.

Data Privacy Infringement

The penalty amounts may change, but all in all the enforcement environment remains remarkably consistent. After all, issues such as consumer protection and fraud prevention are popular goals no matter who is in the White House or leading regulatory agencies. The database, created under the Corporate Transparency Act (CTA), was designed to combat longstanding abuses of shell-company structures.

• Larger organizations typically have more compliance resources; however, their size, complexity and global reach introduce a unique set of challenges.
• Disrupting cybercrime requires a resilient culture that distributes security responsibility throughout the organization.
• The auditing process is underway at the Health Resources and Services Administration (HRSA), which primarily is seeking to ensure providers have met reporting requirements in the $178 billion program.
• Similar to privacy, there is a complex series of state laws on the legalization of cannabis in its various forms, and a resolution of the ongoing conflict between federal and states’ laws would be welcomed.
• The latest numbers show a remarkable change in how organizations handle risk management.
• Save time by monitoring all regulatory compliance activities, providing insights into key risk areas, and then focusing resources on addressing regulatory concerns.

Experts expect the United States to add 23,000 regulatory compliance jobs between 2016 and 2026. Perhaps the most compelling reason to remain compliant is that it keeps the organization out of legal trouble. When companies break laws and regulations, they can face legal problems such as large fines or lawsuits. If they are hit with lawsuits, companies lose an average of more than $7 million when they fail to comply with regulations due to legal fees and fines.

In the U.S., state insurance departments are the primary regulators, supported by national bodies like the National Association of Insurance Commissioners (NAIC). Additionally, the volume of laws, regulations, industry standards and requirements has risen exponentially over recent years. Simply put, regulation now touches every sector and every area of business in today’s corporate landscape. The current compliance concerns with which they struggle hold some of the same concerns that other industries are facing in 2024, but these are not simply a rehashing of 2023 concerns. As that technological revolution continues to remake the compliance sphere, there are a number of concerns that need to be observed by compliance professionals across the globe over the course of 2024. Financial organizations often struggle to ensure that regulatory compliance and regulatory change related tasks are completed on time throughout the organization.

Regulatory compliance examples refer to the common types or categories of standards, regulatory requirements, or laws organizations can abide by. Businesses across sectors and industries must adhere to unique regulations, which is why it’s important to understand these examples and know which ones affect their operations. Looking ahead to 2025, several new trends are expected to evolve leading to further changes in the regulatory landscape. Digital transformation will continue to be a key theme, with regulators likely to leverage technology for more efficient oversight and reporting. Organizations would be looking at increasing their tech budgets to meet compliance requirements by automating tactical tasks.

Beyond cyber GRC, Louis enjoys reading and spending time with his friends and family. Based on Kroll’s 2023 Fraud and Financial Crime Report, money laundering amounts to more than $800 billion annually, and 68% of risk analysts and global leaders expect financial crime to increase next year. Companies operating in multiple jurisdictions must navigate numerous local, regional, and international regulations. That often requires a localized approach to compliance, making GRC efforts more resource-intensive. Emerging technologies like artificial intelligence (AI) and blockchain present new compliance challenges. The European Union released the EU AI Act to regulate the use of artificial intelligence in the region through a risk-based approach in categorizing AI systems based on their risk levels, from minimal to unacceptable risk.

Non-compliance with SOX can result in severe penalties and reputational harm. To avoid these risks, businesses should implement robust data validation processes, conduct regular audits, and provide comprehensive employee training. Prioritizing data accuracy helps organizations maintain compliance and avoid unnecessary legal scrutiny. Regulatory compliance refers to an organization’s adherence to laws, regulations, and guidelines set by government authorities or industry bodies. It ensures companies operate within legal frameworks relevant to their sector, such as data privacy laws in technology or safety regulations in healthcare.

The probability and potential impact of disruptions has increased driven by evolving technologies and a growing interconnectedness between financial and nonfinancial companies. Maintaining compliance can be challenging for small organizations and large enterprises alike due to distinct but equally complex factors. Before a new drug reaches a pharmacy shelf, it must undergo years of clinical trials, rigorous testing and regulatory review. The FDA enforces strict protocols, including GMP, to ensure every pill or injection is safe, effective and properly labeled.

Today, banks and investment firms must follow rigorous rules from agencies like the SEC, Federal Reserve and FINRA to prevent fraud, strengthen transparency and protect consumers. Payment Card Industry Data Security Standard (PCI DSS), which regulates transaction data, may also fall into this category. Additional frameworks include NIST, SOC 2 and ISO/IEC 27001, which are often used in regulated industries or mandated by clients and partners. Failure to meet cybersecurity compliance can lead to breaches, lawsuits and reputational damage. The insurance industry is subject to federal and state regulations that govern solvency, rate-setting, consumer protection and claims handling.

In the UK, proposed DEI rules are likely to come into force in 2025; and in the EU, the European Banking Authority (EBA) is consulting on guidelines for benchmarking diversity practices. Meanwhile, the European Commission is reviewing the Sustainable Finance Disclosure Regulation (SFDR), and there are pending regulations for ESG rating providers that aim to improve the reliability of ESG information. Sustainable investments account for more than $35.3 trillion, and ESG assets are projected to exceed $53 trillion by 2025, potentially representing more than one-third of all assets under management, Reuters found. BlackRock and its CEO, Larry Fink, have become some of the crypto sector’s biggest supporters after previously urging caution and voicing skepticism.

Auditing for compliance helps to implement controls to ensure the institution is compliant and monitoring those controls to ensure they remain effective. 6clicks combines both workflows to automate risk and compliance activities with intelligent AI to expedite the compliance process and garner more informed decisions. Organizations must establish policies to monitor regulatory developments continuously. That can include understanding enforcement trends to anticipate areas of heightened scrutiny better. Dependent on leadership, the National Institute of Standards and Technology released the NIST AI Risk Management Framework (AI RMF) — a regulation emphasizing the importance of organizational structure in managing AI risks.

The 3 pillars that support AI’s data deep undercurrents

The auditing process is underway at the Health Resources and Services Administration (HRSA), which primarily is seeking to ensure providers have met reporting requirements in the $178 billion program. Outline the implications of non-compliance and consistently enforce them to deter violations and promote accountability. The compliance officer can establish confidential reporting mechanisms to allow workers to report concerns without fear of retaliation. The initial assessment result will give the compliance officer the information they need to develop clear and comprehensive procedures.

Financial institutions must be mindful of regulations such as the Dodd-Frank Act, Comprehensive Capital Assessment and Review regulatory framework and the Large Bank Pricing Rule. Legislation that regulates business is often devised in an effort to reinforce ethical and safe behavior in organizations. When organizations follow these regulations, it helps keep employees, customers and the general public safe. After you have been penalized for violations, it takes significant time to recover as you remediate any issues.

Regulatory compliance varies between business sectors and geographical regions. Region-specific laws and frameworks may change the regulatory environment. For example, the actions required of health organizations differ from the responsibilities of e-commerce merchants. Businesses of all sizes and in every industry have laws and regulations they must adhere to. Regulatory compliance is the act of keeping an organization in line with all international, federal, state, and local laws and regulations that apply.

The Securities Exchange Act of 1934 mandates clear and accurate reporting for publicly traded companies to ensure transparency and protect investors. Non-compliance with these requirements can result in regulatory scrutiny and financial penalties. Businesses should establish clear reporting frameworks, ensure employees understand their roles, and appoint chief compliance officers to promote accountability.

President Trump has sent strong signals that there will be significant changes, both in policy as well as leadership, starting on day one. However, it’s important to remember that changes to the laws and regulations that impact banks on a day-to-day basis move at a much slower pace. As compliance professionals boldly move through 2024, they must be careful navigating this precarious terrain. As elections come to a close, technology continues to develop, and nefarious actors do what they do, it is more important than ever that today’s compliance professionals stay tuned in. Indeed, they need to remain the first line of defense, protecting institutions from financial crimes and major losses.