Risk and compliance functions across financial services are being asked to do more than track regulatory change, according to CUBE’s latest fortnightly briefing, The CUBE Read.
Teams are now expected to extract obligations, map them to source law, separate proposed rules from enacted ones, and make applicability calls, often long before a final rule exists.
CUBE reports that the operating reality is falling behind that expectation. Its Cost of Compliance Report 2025, drawn from over 2,000 senior compliance and risk officers, found that at 74% of institutions, moving from identifying a regulatory change to full implementation takes more than a year.
CUBE notes this isn’t a lack of effort but a workload that has outgrown available capacity. The consequences of misjudging that interpretation are already visible: SEC commissioner Hester Peirce warned this month that crypto vaults and onchain lending could fall under federal securities law depending on structure, while Hong Kong’s SFC fined an asset manager HK$6.8m for failing to flag red flags in a dubious fund arrangement.
A second shift CUBE highlights is firms setting AI governance policies ahead of formal regulation. Sign-off requirements before AI touches sensitive data, and caution around AI-assisted output, are becoming standard even as the EU AI Act’s high-risk obligations for financial services are pushed back to December 2027 under the Digital Omnibus. CUBE frames this as a live workstream already shaping tooling decisions, well ahead of any legal mandate.
The third pressure point, per CUBE, is that fixed, jurisdiction-count coverage models are straining under the volume and irregularity of change. In the past fortnight alone, the US Treasury removed 84 names from its SDN list, the Wolfsberg Group extended its financial-crime framework to non-bank payment providers, and ESMA credited BaFin and CySEC with progress on cross-border supervision while pushing for calibrated enforcement. None of this, CUBE stresses, follows an annual planning calendar.
For more, read the full report here.
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