The majority (64%) of global regulatory leaders believe that tech-driven risks, such as the accelerated use of AI, will be the market force that is most likely to cause compliance issues in the next year.
That’s according to eflow Global, a leading provider of regulatory compliance technology, which surveyed 300 senior executives in the finance industry across the UK, US, Europe and APAC.
The findings also highlight the broader challenges financial firms face in a volatile global landscape. Economic instability, exacerbated by inflationary pressures and market unpredictability, is cited as a key compliance challenge by 58% of respondents, rising to 63% among UK-based regulatory professionals.
Geopolitical instability adds another layer of complexity, which one in four executives flagged as a growing risk. Meanwhile, 47% of participants pointed to the increasingly intricate regulatory environment as a major obstacle to maintaining compliance.
“Firms should proceed with caution and be mindful of inaccuracies,” said Ben Parker, CEO of eflow Global. “The risks associated with AI, particularly around data privacy and security, need to be carefully considered. Implementing AI without proper testing and validation can lead to unintended consequences, especially in highly regulated sectors like finance.”
“The bottom line is that human expertise remains vital,” Parker added. “AI should complement and augment human decision-making, allowing experts to focus on strategic oversight while automation manages repetitive tasks. This collaboration between AI and human professionals is critical to building efficient and compliant systems.”
Jonathan Dixon, Head of Surveillance at eflow Global, added:
“Artificial intelligence is already transforming trade surveillance by enabling real-time monitoring and predictive analytics that can foresee risks before they materialise. It is also reshaping compliance by addressing gaps in transaction traceability and making regulatory processes more efficient. However, over-reliance on AI without human oversight is like flying blind. No matter how advanced it is, a flawed algorithm or biased dataset can create blind spots that can create significant regulatory and reputational risks for firms.”
The issues are detailed in eflow Global’s upcoming Global Trends in Market Abuse and Trade Surveillance 2025 Report, launching in March 2025, which will present an extensive deep dive into the challenges that regulated firms are experiencing across global markets.
About eflow Global
Founded in 2004, eflow Global provides financial firms with technology solutions to help them comply with their regulatory requirements in a more streamlined, efficient and robust way. It offers award-winning solutions for market abuse surveillance, best execution, transaction-cost analysis, transaction reporting and eComms surveillance.
The company currently services over 130 clients across five continents, providing both buy-side and sell-side firms with highly configurable digital tools that are designed to keep them compliant and competitive in this ever-changing regulatory landscape. eflow’s regulatory solutions are delivered through a PATH, a unique digital ecosystem that offers the speed, convenience and efficiency of off-the-shelf software, combined with a level of customisation that is typically only associated with a bespoke platform.
