Navigating regulatory change and market dynamics in 2024

Navigating regulatory change and market dynamics in 2024

The power of technology and AI

As 2023 draws to a close, we look towards a new year that will continue the transformation of financial services, driven by technological innovation and regulatory change. 


The implementation of T+1 in the US and Canada will serve as a benchmark for financial institutions globally. Successful adaptation requires readiness and a proactive approach to leveraging technological advancements. Less a transition; it’s an opportunity for organizations to rethink and revamp their operational frameworks.

The impact will ripple across the financial services industry, compelling institutions in other regions to accelerate their technological integration. The agility and adaptability of firms will be tested as they align with evolving market dynamics, and success will be crucial for maintaining global market connectivity and competitiveness.

The regulatory landscape in 2024

The regulatory landscape is poised for substantial changes in 2024, with AI regulations leading the charge. New regulations such as the EU’s new AI Act and the US AI Bill of Rights, will set precedents in AI governance, pushing organizations to adopt more transparent and responsible AI practices. The impact of these regulations will be far-reaching, affecting everything from algorithm design to data management.

Separately, the proposed changes to capital management rules under Basel III will require institutions to assess how they implement an expanded risk-based approach (ERBA). These changes are more than mere compliance requirements; they represent a fundamental shift in how financial risks are managed and reported, and how some firms do business. Meeting the updated criteria for capital requirement calculations and the subsequent steps of accurate reporting and concise reconciliation is expected to pose additional burdens for financial institutions.

Ultimately, regulators expect robust controls, high levels of transparency and complete accountability. For financial institutions, this means high quality data, excellent data management and total workflow auditability.

2024: where technology, AI and regulatory change collide

Everyone’s talking about AI and in 2024, the conversation around AI in financial services will undoubtedly mature. There is already much scrutiny of AI's role in enhancing decision-making and operational efficiency and this will continue as the market considers both the theoretical and practical implications. The industry is set to witness AI's growing influence in core business areas, yielding promising outcomes in specific use cases.

Regulatory changes play an important role in shaping the industry's trajectory, making the interplay between technology, including AI, and regulatory compliance critical, and core to innovation and growth.

Fresh impetus is also expected in discussions on market interoperability as an enabler of operational efficiency and standardization. We already see standards such as ISO20022 gaining traction, now moving into the derivatives reporting space as part of the EMIR/UK Refit and CFTR rewrite programs in 2024. Overall, market dynamics see the value in a joined-up approach that realizes true inter-connectedness between market participants. 

Tackling data quality challenges

The issue of data quality is more pressing than ever. In 2024, financial institutions must prioritize data integrity to maintain operational excellence and regulatory compliance. The challenge is managing data and transforming it into a strategic asset that drives informed decision-making and innovation.

AI is an important ally in the battle against data quality issues. It can supercharge financial institutions’ ability to quickly identify and extract the right data, at the right time, to fuel optimized business practices.

Looking ahead

As we progress through 2024, the financial services industry is poised to undertake one of the most dramatic transformations in its history. The successful navigation of this new landscape will require a blend of technological savvy and regulatory acumen. Financial institutions that can effectively integrate the right technologies and AI to enhance their operations and adapt to regulatory changes will emerge as leaders.


Learn more about the Xceptor platform that is designed specifically to meet the needs of the financial services industry.