Financial institutions face mounting pressure to keep their governance, risk, and compliance frameworks aligned with constantly shifting regulatory expectations. Yet many organisations still operate with policies shaped by outdated obligations, exposing them to unnecessary risk and avoidable penalties.
According to AscentAI, as regulatory change accelerates across global markets, the challenge of maintaining accurate, up-to-date information has become a defining issue for compliance teams.
Regulatory bodies issue updates at a pace that outstrips traditional manual review processes. Thomson Reuters estimated that in 2022 alone there were 234 regulatory alerts every day, spanning 1374 regulators across 190 countries. The stakes are rising too. In 2024, US regulators issued $4.6bn in fines, accounting for 95% of all penalties globally. According to the XLoD 2025 survey of G-SIB and D-SIB institutions, more than half of respondents expect a similar level of fines this year, while almost one in five anticipate the figure will increase.
Operational hurdles continue to undermine firms’ attempts to streamline compliance processes. The same survey found that 70% of respondents view poor-quality data as a major obstacle to building a robust control environment.
A further 72% highlighted technology limitations as the biggest barrier to implementing regulatory change across the first line of defence. As the volume of obligations continues to surge, the ability to keep pace manually becomes almost impossible without scaling teams indefinitely or tolerating higher levels of risk.
One of the biggest dangers lies in the lag between regulatory change and internal updates. Many organisations still operate on policy review cycles of six to 12 months, while procedural reviews may take up to two years. Off-cycle reviews often only occur in response to incidents or audit findings. Meanwhile, regulators publish new obligations daily, creating a widening gap that can leave institutions exposed long before updates finally take effect.
Some firms have turned to general-purpose AI platforms to bridge this gap, but these tools carry significant drawbacks. Large language models are not built specifically for regulatory interpretation and often generate inaccurate or distorted outputs. A BBC assessment of AI-generated news summaries found that 51% contained notable issues, 19% introduced factual errors, and 13% misquoted their sources. With LLMs trained on vast quantities of unrelated data, even subtle distortions can cascade into flawed policy decisions.
Even the largest AI companies acknowledge the limitations. Entrepreneur magazine recently reported that OpenAI has recruited more than 100 former investment bankers from institutions such as JPMorgan Chase, Goldman Sachs, and Morgan Stanley to improve the accuracy of its financial task automation capabilities.
Purpose-built systems are now emerging to address these gaps more reliably. AscentAI has developed an approach trained solely on regulatory information, using proprietary datasets labelled by financial compliance experts. This enables the platform to interpret regulatory text with greater precision and consistency, reducing the risk associated with inaccurate AI outputs.
For institutions looking to strengthen their compliance posture, the priority is clear: regulatory obligations must be maintained continuously, not revisited months after the fact. This requires real-time monitoring, lifecycle tracking of obligations, instant regulatory alerts, and rapid mapping of obligations to risk categories, processes, and products. Faster identification of required updates can prevent minor mismatches from escalating into costly breaches, while improved clarity enables policy exceptions to be applied more accurately across jurisdictions.
Ultimately, accurate and current regulatory obligations form the foundation of effective compliance. Relying on outdated manual processes or unsuitable AI tools can leave organisations dangerously exposed. Purpose-built solutions such as AscentAI offer the speed, specificity, and accuracy needed to keep pace with regulatory change and ensure that policies, controls, and decision-making remain aligned with the latest requirements.
Copyright © 2025 RegTech Analyst
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