Compliance predictions for 2023

As 2023 gets underway, RiskScreen explores some of the most likely trends that compliance departments across a wide range of sectors will face over the coming year.

‘If we learned anything from 2022, the unpredictability of geopolitics can turn the world upside down in just a matter of days.’

They have compiled a list of our predictions for the most likely compliance trends that will emerge over the coming year.

1. Increased coordination between regulatory authorities
2. Greater self-regulation
3. Tightening of regulations for the crypto sector
4. Greater scrutiny of global supply chains
5. ESG programmes face major challenges
6. The fate of publicly available beneficial ownership registries hangs in the balance
7. The increasing use of Artificial Intelligence.

With the prospect of a global recession uppermost in the mind of many decision makers, it’s crucial that any budget cuts don’t impact the ability of the compliance department to protect the business.

History has shown that during times of economic uncertainty and hardship financial crimes inevitably increase. It also shows us that cutting back on compliance spending, results directly in an increase in the number and size of fines levied on organisations by financial regulators.

Read the Full RiskScreen report here

Notes by Compli-Serve

It is difficult to make specific predictions about financial services compliance for 2023, as it will depend on a number of factors such as regulatory changes, emerging technologies and global economic conditions. However, we can provide some general trends that may have an impact on financial services compliance in 2023:

• Increased regulatory scrutiny: Financial regulators are likely to continue to focus on ensuring that financial institutions have robust compliance programs in place to protect against money laundering, terrorist financing, and other financial crimes.
• Cybersecurity: Cybersecurity will continue to be a major concern for financial institutions, as the number and sophistication of cyberattacks continue to increase. Compliance programs will need to include measures to protect against cyber threats and to respond quickly to any breaches that occur.
• Artificial Intelligence (AI) and Machine Learning (ML): More financial institutions will be using AI and ML in their operations, and this will raise new compliance challenges. Regulators will likely provide guidance on how institutions should use these technologies and how to ensure that they are used in compliance with regulations.
• Data protection: The use of data analytics and data sharing will become more prevalent in financial services, bringing new challenges in terms of data privacy and data protection. Institutions will need to ensure that they are compliant with data protection regulations and that they are able to protect customer data from unauthorized access or breaches.
• Climate risks: Climate risks will be a big focus for compliance as regulators will be requiring financial institutions to disclose and manage their exposure to climate risks and opportunities.In summary, financial institutions will have to keep up with the new technologies, adapt to the changing regulations and keep a close eye on the compliance risks while they continue to perform their core operations.