As the regulatory technology (RegTech) landscape changes rapidly, 2025 promises to be a transformative year
Predictions indicate that AI will make its way from hype into tangible, embedded solutions, changing how organizations tackle compliance and financial crime prevention. Here’s a closer look at some pivotal trends that shape the future of RegTech in the upcoming year.
AI hype becomes reality
2025 will be the year of proof for AI. No longer just a buzzword, AI will be deeply embedded across compliance processes, delivering real, measurable value. We expect to see:
- Generative AI Pilots: More companies will pilot generative AI use cases, exploring how advanced models can transform compliance workflows.
- Production Deployments: A significant move toward deploying AI solutions in live environments, marking an essential move from experimentation to execution.
- Regulatory Hesitation: While the pace of adoption accelerates, regulators remain cautious, grappling with how AI use cases are implemented and the value they bring. This ongoing scrutiny will shape the pace of innovation.
AI Use Cases: Efficiency Meets Effectiveness
Organizations are discovering that AI’s value lies not just in improving efficiency but in enhancing effectiveness. The use cases gaining traction include:
- Quality Control Assurance: AI tools are being deployed to improve control mechanisms, ensuring compliance systems operate with greater precision.
- Multi-Jurisdiction Risk Insights: Across jurisdictions, Advanced AI models are revealing risk patterns that would not have been possible to detect previously. This goes beyond reducing false positives, providing firms with a more granular view of risk patterns that wouldn’t be noticed otherwise.
- Agentic AI: Instead of large-scale integrations across the organization, firms are adopting agentic AI — one piece at a time. This incremental approach allows businesses to realize value without system overhauls.
Tackling Emerging Risks with New Technologies
The dynamic risk landscape, driven by macroeconomic and geopolitical uncertainties, requires innovative solutions. While replacing legacy risk management processes will take time, wider adoption of advanced technologies is inevitable. These advancements will address both new and emerging threats, providing firms with the agility to adapt to shifting regulatory requirements and economic pressures.
Data Sharing and Collaborative Intelligence
One of the most significant shifts in 2025 will be the changing paradigm around data sharing. Historically, public-to-private data sharing has been limited to identifying bad actors, such as sanctioned entities. However, private sector can now leverage technologies such as federated learning to share insights – a powerful way for identifying new financial crime risks and threats might otherwise go unnoticed, without compromising data privacy. Generative AI models can further facilitate this collaborative environment by helping firms analyze data and share actionable intelligence seamlessly.
Gradual Transformation of Risk Management
While the transformation of risk management systems will take time, 2025 represents a turning point. More and more companies are beginning to adopt new technologies to address previously unmanageable risks. By employing AI and other advanced tools, firms can transition from traditional methods to agile and forward-looking strategies, ultimately staying ahead of the curve.
Conclusion
As we step into 2025, the RegTech sector is set to embrace a new era of innovation. From embedding AI solutions to promoting better collaboration between the private and public sectors, the future promises immense opportunities in handling the complex challenges of compliance and financial crime prevention. Investment in these technologies today will ensure that organizations are better prepared to navigate tomorrow’s regulatory landscape and uncertainties.
Hear more at SymphonyAI‘s webinar
SymphonyAI is hosted a webinar on ‘Global FinCrime Prevention: Key Takeaways from 2024, Predictions for 2025 (Regulation, Tech, AI)’ with top resident subject matter experts who explored the evolving landscape of financial crime prevention and transformative role of gen AI technology. Join us for the insightful session, gain expert guidance and practical strategies to prepare your organization for the 2025 financial crime prevention challenges.