RegTech in 2025: The Year AI Dominated the Conversation, and Why 2026 Will Redefine the Entire Landscape

If I look back at 2025 and the trends shaping the RegTech space, one thing stands out above everything else: AI became the centre of gravity. It was the headline topic at every event, every roundtable and every industry conversation I had. It’s clear AI has the potential to completely transform the sector.

But if we’re being honest, the practical impact of AI on RegTech in 2025 has been small compared to its potential. Most organisations have experimented with AI, usually through tools like Gemini or Copilot, but we’ve barely scratched the surface of what’s possible. Skills gaps remain, adoption is uneven and, in many cases, progress hasn’t moved much beyond talk.

That will change in 2026. I’m confident AI will become something no organisation can avoid next year. But AI wasn’t the only driver in 2025. When I step back and reflect, I see six major industry trends that shaped the RegTech space this year.

Six Defining RegTech Trends of 2025

1. SaaS Becomes the Default — Even for the Biggest Institutions

Five years ago, the big debate was on-premise vs cloud. Today, cloud is largely a non-issue. Even Tier 1 banks are increasingly comfortable with public cloud.

Now, the conversation has shifted to whether organisations are ready to fully embrace SaaS.

We’re seeing a clear trend:

• Less desire to maintain systems they don’t own
• Recognition of lower costs through SaaS
• Faster delivery
• And interestingly, the realisation that SaaS can actually be more secure than on-premise

Vendors understand the nuances of their own software better than anyone else, and with proper data transmission security, SaaS is often the lower-risk option. That recognition is finally becoming mainstream in RegTech.

2. Customer Experience Moves to the Forefront

In previous years, compliance due diligence was an afterthought in onboarding. If a customer submitted incorrect documentation, it could take weeks before the issue was identified. That slowed down onboarding and frustrated customers who had to resubmit everything.

This year I saw a major shift.

Organisations are moving due diligence into near real-time, and many are even restructuring reporting lines so account-opening teams and compliance teams work in one flow.

The result?

• Faster onboarding
• Lower costs
• And a significantly improved customer experience

Compliance is no longer “the slow part of onboarding”. It’s becoming a CX advantage.

3. The Push for Operational Efficiency

Speed and accuracy are driving innovation across compliance operations. In 2025, I saw:

• A strong drive toward straight-through processing
• Automated checks becoming more sophisticated
• A focus on improving human productivity where people remain in the loop
• Significant R&D investment to modernise and streamline compliance workflows

Large organisations are taking a hard look at what it actually takes to remain compliant, and optimising it end-to-end.

4. Vendor Management Becomes More Challenging

This is a trend that worries me.

Vendor questionnaires are becoming longer, more complex and more time-consuming, especially for smaller RegTech firms. That increases the cost of sales, and those costs eventually get passed back to clients.

Vendor management is critical, of course, but if the process becomes too heavy, we risk stifling innovation in the very industry we're trying to evolve.

It’s definitely something to keep an eye on moving into 2026.

5. Technical Modernisation Accelerates

A few clear patterns emerged on the technical side:

• Integration conversations are now API-first
• Excel-based data transfers are dying out
• Organisations expect near-fully automated deployments, no humans in the loop
• Architecture simplification projects are on the rise
• Many institutions are consolidating systems and identifying one golden data source

And importantly, AI is giving organisations new confidence that legacy data problems, which have felt unsolvable for decades, may finally be within reach.

6. Oversight and Regulatory Harmonisation Expand

Authorities are moving toward more cross-border alignment. CARF is one major example, but I’m seeing the broader trend everywhere.

Regulators are also beginning to seriously consider what AI oversight will need to look like. We haven’t seen concrete frameworks yet, but the conversations have started, and that alone signals change ahead.

2026: The Year AI Goes From Talk to Transformation

If 2025 was the year the industry talked about AI, 2026 will be the year it actually implements it, at scale.

Here’s what I expect to see next year.

1. AI Will Run Real, Production-Level Workflows

I’m confident that AI agents will take over many of the repetitive, manual tasks still handled by humans today.

That means:

• Greater accuracy
• Faster turnaround times
• Lower costs
• And people being redeployed to more meaningful work

Early adopters will gain a major competitive advantage. They’ll deliver better customer experiences while reducing operational costs, and in a price-sensitive world, that matters.

But there’s a clear distinction we’ll see in 2026:
Having an impressive AI demo is very different from running AI at enterprise scale with compliance, security and performance baked in.

Only vendors with a proven track record will thrive in this environment.

2. Integrations Will Become Out-of-the-Box

Integrating systems today often requires lengthy projects, large teams and months of coordination.

Technologies like MCP are about to change all of that.

In 2026, I expect integrations to become:

• Off-the-shelf
• Configurable
• Much faster
• And dramatically easier

This will increase interoperability across the industry, unlocking new opportunities for data sharing and ecosystem building.

3. AI Governance Will Become a Regulation in Itself

Once AI begins running compliance workflows (and it will), regulators will face new questions:

• How do we certify AI's decisions?
• What does AI auditability look like?
• What are the standards for AI-managed compliance?

I expect the foundations of AI oversight to appear in 2026, and it will reshape the industry.

4. AI Will Become a Core Competency

Tools aren’t enough anymore. Organisations will need to invest in:

• AI education
• Upskilling their teams
• Embedding AI into everyday processes
• And adjusting culture to support AI-driven ways of working

AI will change “how things are done around here”, and that will affect organisational culture at every level.

Indirect AI Impacts That Will Redefine the Market

1. Fully Connected Ecosystems

With integrations becoming easier, I expect cross-institution connectivity to flourish.

Imagine:

• Deutsche Bank instantly retrieving a tax form from UBS
• Barclays requesting documentation from J.P. Morgan in real time

These are the types of connections that were painfully difficult in the past but will soon feel effortless.

2. More SaaS Adoption

Running production-grade agentic flows is not a core competency for most organisations.
They will increasingly rely on SaaS providers who specialise in secure, scalable AI operations.

3. Data Quality Returns to Centre Stage

I’m hopeful, and confident, that organisations will no longer accept poor data quality.

AI provides the tools to finally fix:

• Legacy data
• Dirty data
• Inconsistent data sources

What was once considered “just the way it is” is now entirely solvable.

4. Regulations Will Evolve

With greater cross-border harmonisation and new AI capabilities, I anticipate:

• More frequent regulatory reporting
• New frameworks
• And potentially higher penalties for poor data quality or insufficient remediation

Regulatory expectations will rise sharply in 2026.

2026 Will Be a Breakthrough Year

To summarise:

• 2025 was a year of industry-wide conversation and structural groundwork.
• 2026 will be the year AI becomes real, embedded, scaled and productionised.
• Agentic systems will free up people for more valuable work.
• Data quality will matter more than ever.
• Integrations will become seamless.
• Regulations will adapt to the new world.

By this time next year, if you ask me the same question about AI’s impact, I have no doubt my answer will be completely different. Because 2026 is the year AI truly changes the game for RegTech.

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