10 Common Regulatory Compliance Challenges

Regulatory compliance is a dynamic domain that responds to the regulatory environment and anticipates the organization’s future needs. The challenges faced by compliance managers keep evolving based on regulatory pressure.

We have compiled ten regulatory compliance challenges being faced by compliance teams across the financial industry.

1. Inefficient Task Management

Financial organizations often struggle to ensure that regulatory compliance and regulatory change-related tasks are completed on time throughout the organization. Key pain points include:

• No visibility into tasks being undertaken by other departments
• Lack of transparency leading to unexpected delays
• Poor coordination across business units on compliance timelines

The task management solution built into a modern compliance management platform simplifies task management throughout the organization with automated workflows and notifications.

2. Increased Documentation Requirements

Regulatory bodies want better documentation and audit trails. Regulators focus on using data to understand the system and its weaknesses and expect businesses to have stronger documentation standards in their compliance management frameworks. This documentation needs to be readily available for:

• Regulatory exams
• External audits
• Internal compliance reviews and reporting

Modern compliance management solutions alleviate this issue by automating much of the documentation process.

3. Issue Resolution Inefficiency

The compliance management team can detect non-compliance and provide the corrective measures required to fix it. The problem is that there is often a delay in issue resolution because:

• The task may not be given high enough priority by other departments
• Compliance teams lack an easy way to track all open and closed issues
• Cross-departmental handoffs create communication gaps

A compliance management platform enables all stakeholders to quickly collaborate throughout the enterprise, resulting in faster issue mitigation.

4. Executive Visibility

The board of directors and other executive members rely on reporting from the regulatory compliance team. Without real-time dashboards, they have no other way to monitor or assess the performance of the current regulatory compliance framework or any of the activities within it.

The dashboards built into compliance management systems provide executives with:

• A real-time view of all compliance activities
• Important compliance metrics across the organization
• At-a-glance status updates on key regulatory obligations

5. Regulatory Exams

Regulatory examinations consume a considerable amount of resources and often do not go smoothly. Common challenges include:

• Significant effort required to organize and prepare documentation
• A lack of coordination between different departments
• Stress and disruption for employees involved in the process

Compliance management platforms provide a separate regulatory exam workflow that streamlines the process throughout the enterprise, resulting in a smoother experience for all stakeholders involved.

6. Lack of Training

Recent regulatory reforms have highlighted an enterprise-wide knowledge gap on regulatory compliance. Regulatory compliance is only possible if the whole business understands and adopts compliance standards into its processes. While enhancing monitoring capability is critical, so is building a culture of compliance awareness. Key gaps include:

• Employees unaware of regulatory requirements specific to their roles
• Inconsistent training across departments and seniority levels
• Infrequent updates to training content as regulations change

Learning management systems within compliance platforms ensure that all employees have the required compliance training based on their job roles.

7. Lack of Alignment

Compliance with regulatory requirements is only possible if the entire organization is committed to ensuring it. Each business unit has its own objectives that align with the overall goals of the corporation, but compliance can appear to be an impediment — while it is a necessity for all departments, it is not the primary aim for those outside risk and compliance.

Compliance management platforms make it easier for all stakeholders to:

• Understand how they contribute to the compliance framework
• See the big picture across the organization
• Increase alignment between departments and the compliance team

8. Budgeting Concerns

Compliance and risk management departments recognize the critical nature of using the appropriate regulatory compliance technologies. The issue is that they frequently struggle to communicate this relevance to other organizational stakeholders. Key budgeting challenges include:

• Difficulty securing budget approval for compliance technology initiatives
• Competing priorities across departments for limited resources
• Instability in the business environment making investment decisions harder

9. Accounting Concerns

Budgeting for regulatory compliance is also a source of contention. Organizations may wish to better distribute the expense of regulatory compliance across the firm. It is unfair to consider regulatory compliance expenditures in isolation from the budgets of other departments — each department within the firm must adhere to regulatory requirements. Therefore, it is fair to budget compliance accordingly and allocate costs proportionally.

10. AI Governance and Emerging Technology Risk

Rapid artificial intelligence adoption in financial services is outpacing regulatory oversight, creating a significant new compliance challenge. More than 70% of banking firms report using agentic AI to some degree, yet there is a general lack of robust governance frameworks.

Financial institutions must now address several AI-specific compliance demands:

• Producing audit-ready evidence across AI-driven processes and decisions
• Ensuring transparency and explainability of AI model outputs
• Managing third-party AI vendor concentration risk, with many firms relying on the same top vendors
• Monitoring AI interactions in real time to detect risks or non-compliant outputs
• Adapting to evolving regulatory frameworks such as the EU AI Act

Boards are increasingly making AI oversight a standing agenda item and investing in explainability, auditability, and third-party risk controls ahead of formal regulation. For compliance teams, this means treating AI governance not as a future concern but as a strategic imperative that requires immediate attention.

A platform like Predict360 consolidates compliance activities, automates workflows, and provides the visibility that financial institutions need to stay ahead of regulatory demands. Speak to our team about a custom solution or request a demo for your organization.