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How financial firms can prepare for the 2024 regulatory landscape

Financial services firms will need to prioritize both event-driven and existing regulations to capitalize on untapped opportunities.

In brief

  • Regulatory and supervisory focused priorities such as prudential developments and resolution and recovery have become heightened due to recent market events.
  • Firms still need to prioritize consumer impact, ESG, digital assets, digitalization of finance and use of AI, financial crime and operational resilience.
  • A focus on people, processes, data and technology will position firms to succeed in a tumultuous — but opportunistic —  regulatory environment.

Interpreting rapidly evolving regulations can be tricky for financial services firms. Increased geopolitical tension and economic turmoil add to the complexities and challenges, making it more important than ever to focus on priorities. Many of the issues we highlighted in our 2023 outlook are still top of mind. However, several high profile bank failures and increased scrutiny by regulators across the globe have led firms to place greater emphasis on emerging and event-driven regulations, board and management oversight, supervisory effectiveness and best practices that will enable future growth.

What are the expectations and top priorities for 2024 — and how can firms prepare and respond?

Download the full 2024 Global financial services regulatory outlook report

  1. Engage proactively with regulators on new prudential developments

    Recent non-systemic bank failures highlight the need to reassess the risk of contagion and manage threats that could present conduct and reputational challenges. Liquidity regulation in the past did not fully reflect how changes in technology impacted consumer behavior. Continued reporting of liquidity and stronger metrics will likely lead to more sophisticated and thoughtful approaches to stress testing that consider non-financial risks. These will require firms to engage with regulators and understand the potential vulnerabilities, themes and players involved.

  2. Focus on resolution and recovery strategies

    After the global financial crisis, regulators strengthened capital and liquidity standards for firms with minimum requirements intended to remove the expectations of government support. US regulators are re-emphasizing their focus on liquidity risk management, and most European banks will have internal frameworks, governance and management information systems that will enable them to forecast their net liquidity position by 2024. Firms need to continue to increase their resolution and recovery testing and review their approaches to crisis management, with minimal disruption to the market or their customers.

  3. Establish a governance framework for digitalization and AI adoption to maximize upside value and minimize risk

    As digitalization becomes more prevalent, it is critical for firms to update legacy systems. In 2024, they will seek to strengthen their operational resilience framework to meet new regulatory requirements and ensure senior management accountability. This will require enhancing their IT systems, IT outsourcing and cybersecurity and forming cross-functional teams to address risk and compliance.

    For more on establishing governance frameworks for Generative AI read Five priorities for harnessing the power of GenAI in banking.

  4. Develop a digital asset strategy taking into consideration cross-jurisdictional differences in maturity

    The digital asset ecosystem is rapidly evolving with a variety of options, including stablecoins, crypto-assets and central bank digital currencies (CBDCs). In view of the shift in consumer payments from cash to cards, digital payments and online services, it’s critical for firms to develop an overarching strategy to deal with these digital assets. They need to understand how these assets fit into existing legal frameworks and financial market infrastructure as there are clear differing jurisdictional approaches in development. 

  5. Continue to manage ESG risks through an institution-wide approach

    Financial institutions can capitalize on net-zero transition planning as regulators require firms to have transition plans in place to manage their exposure to financial risks. Net-zero targets will require organization-wide transformation; a robust plan that embeds biodiversity and climate-related risks would provide a flexible roadmap for firms to enable this change. An institution-wide approach should incorporate business strategy, governance and risk management, while setting clear targets and supporting sustainability disclosures. Firms should also invest in environmental, social and governance (ESG) training for key personnel.

  6. Shift the mindset to consumer impact

    Regulators are taking a broader, more proactive view of products, pricing and the overall impact of the environment on the consumer. To protect the best interests of the consumer, central banks are changing their consumer protection codes, emphasizing the need for firms to make a greater commitment and understand the implications of implementing new products and services. Firms should expect wider regulatory reach but a more level playing field for finance players competing in the same spaces. There is an opportunity to explore alternative marketing channels such as social media through the consumer-impact lens.

  7. Maintain vigilance in combatting financial crime and fraud and use technology to help ensure compliance

    While technology is creating new types of threats, it also offers new tools in the fight against financial crime. Fraud and investment scams are on the rise for the financial system, especially at the retail level, where economic stress is pushing customers toward risk-taking behavior. Bank transfers account for the majority of scam payments, thus requiring critical monitoring and analysis. Crypto crime prevention and regulatory scrutiny will continue to surge and firms in industries beyond financial services will need to adopt data and artificial intelligence (AI) solutions for financial crime compliance. They must also consider the use of AI and more sophisticated technology to support fraud detection.

  8. Strengthen operational resilience

    Bank failures in 2023 highlighted gaps in banks’ risk oversight and risk and resilience governance and controls. Operational resilience is no longer simply a compliance exercise, but rather should be viewed through the lens of protecting the consumer. Looking ahead, regulators will continue to focus on enforcing requirements which help to improve cyber resilience across the financial sector — reviewing weakness and remediation plans, pursuing breaches, sharing insights and issuing industry-wide guidance. Firms need to determine their risk appetite, consider a variety of scenarios and adapt their processes accordingly. 


An uncertain economic outlook and a complex regulatory environment are presenting challenges and opportunities for financial institutions. Firms  need to understand the expectations of regulators under existing rules — and actively monitor fast moving developments in areas such as digital and ESG. This requires a firm-wide commitment to setting priorities and tailoring business models that focus on people, processes, data and technology. 

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