How Microsoft 365 innovates under evolving regulations

Artificial intelligence (AI) promises to herald a new era of productivity, in which professionals can spend more time on the creative essence of their roles. Microsoft is investing deeply in this future, with tens of thousands of engineers building AI-powered products that enable businesses. As Microsoft 365 builds these products at scale, maintaining customer trust through compliance governance is an essential cornerstone of its strategy.

The challenge lies in leveraging compliance as a strategic enabler that enhances customer trust, strengthens security and privacy and drives continuous improvement. In an era where corporate governance, risk and compliance functions often struggle to keep pace with the demands of AI innovation, industry leaders like Microsoft are not merely adapting — they are setting a new standard on how to meet compliance expectations.

To unlock AI’s full potential, Microsoft 365 is not only enhancing its existing tools but also transforming how those tools are governed. Anchored by capabilities delivered through Copilot, the Microsoft 365 suite is unveiling new products to help organizations navigate AI adoption.

The regulatory landscape is also evolving, with new compliance standards emerging globally. Microsoft 365 engineers adhere to over 80 frameworks and certifications, including ISO 42001 which guide system development and maintenance. By embedding automated compliance checks throughout the engineering lifecycle, engineers can focus on creating AI-driven features that enhance user experience while upholding rigorous standards.

These certifications span a wide range of domains, from security, processing integrity, availability, privacy and confidentiality to responsible AI. For Microsoft 365 engineers, this means navigating more than 500 controls and documenting evidence across systems — often mapping new certifications and compliance requirements into existing workflows or, ideally, defining new ways to embed them from the start. The stakes are high because meeting these standards isn’t just about passing audits.

Microsoft 365 engineering teams have established robust technical solutions to navigate the complexities of evidence collection, monitoring and audits. However, the company recognized quickly that compliance requirements should be embedded from the outset of the development lifecycle to drive compliance by design. This requires not only technology but the ability to scale and evolve in step with business and regulatory changes.

To achieve this, Microsoft 365 harnessed its own existing internal tools to automate compliance configurations, monitoring and remediation across its infrastructure. These tools automate the majority of compliance controls up front; they also gate deployments based on compliance signals, and they enable continuous monitoring. This makes sure that adherence to regulations is not an afterthought but a foundational aspect of product engineering.

EY teams helped the Microsoft team scale those capabilities even further. Drawing on extensive experience automating compliance activities in the technology sector, EY professionals collaborated with Microsoft to define essential change control configurations and embed them into the audit readiness process. This approach streamlined evidence generation for the teams building new products. And the ongoing managed services relationship means Microsoft engineers benefit from consistent access to talent, tools and evolving best practices, without needing to reinvent processes each time regulations shift.

In addition to driving compliance by design, automated data collection and rule-definition capabilities enable real-time monitoring and deliver deeper insights into Microsoft 365’s control footprint, facilitating effective demonstrations of compliance to regulators and auditors. Microsoft 365’s proprietary solution connects to upstream data sources, providing a systematic reflection of compliance status with defined controls. Building on this foundation, EY professionals developed metrics and rules to provide greater visibility for compliance governance.

Microsoft 365 centralizes these notifications, streamlining actions for engineers. The system features over 100 key performance indicators (KPIs) that empower service teams by streamlining alerts and enhancing efficiency. This unified tool scales seamlessly as commitments evolve, providing a positive and productive experience for engineering teams who are building new business products.

In the age of AI, Microsoft’s ambitions are enormous, with tens of billions of dollars of planned investments. However, these ambitions bring a complex array of compliance requirements, from traditional well-established regulatory audits to evolving standards in areas like responsible AI. To effectively manage these at scale, Microsoft requires more than just technical capabilities; it needs an adaptive, centralized compliance engine and a trusted partner to provide regulatory insight, operational experience and a proven ability to scale compliance governance using technology.

Working together in a managed services partnership gives Microsoft 365 and EY teams more opportunities to codesign innovative solutions that deliver trust and lasting value. For example, a joint team is currently developing policy-driven automation built on Microsoft AI infrastructure to enhance risk management efficacy and efficiency, backed by transparent controls and subject matter resources in the loop. This is not a one-off engagement, but a continual journey of improvement aimed at delivering bolder business outcomes.