Responses reflect uncertain regulatory environment, increased risk challenges, and appetite for technology that enhance industry practices

Wolters Kluwer Financial & Corporate Compliance today announced the results of its latest Regulatory & Risk Management Indicator (“Indicator”) survey, revealing a third consecutive year of declining concern levels among U.S. banking industry respondents regarding the management of their risk and regulatory compliance obligations. The 2025 Indicator measure of U.S. lender concern levels fell from an index of 117 in 2023, to 99 in 2024, and now to 88 in 2025 -- marking a significant downward trend in perceived compliance risk.

This year’s survey results were primarily influenced by sharp declines in several regulatory factors tracked annually by the Indicator compared to 2024. These include a 61-point drop in the dollar amount of fines imposed on banks, a 48-point decrease in the number of new major regulations introduced, and a 26-point reduction in the number of enforcement actions. Together, these declines outweighed increases in perceived risk management concerns, resulting in an overall lower Index score.

“The current pullback of regulatory actions undoubtedly impacts respondents’ concerns as to measuring their ability to comply with regulatory obligations and risk management challenges,” notes Jason Keller, Director, Market Strategy, Compliance Analytics, Wolters Kluwer Financial & Corporate Compliance. “However, findings point to a number of persisting pain points facing financial institutions in managing risk and regulatory compliance.”

Shifting Risk Landscape

While this year’s Indicator shows declines in concern over several economic factors -- such as inflation, interest rates, and recession fears -- there are notable increases in other risk areas that weigh on enterprise risk planning. Specifically, concerns about ransomware attacks rose by 9 points, operational resiliency increased by 7 points, and loan defaults climbed by 6 points. Looking ahead, respondents identified cybersecurity and credit risk as priorities likely to receive heightened attention over the next 12 months, up 5 and 2 points respectively. In contrast, anxiety over managing compliance risk in the coming year dropped significantly, down 20 points.

Compliance Program Challenges and Technology Adoption

Manual compliance processes remain the biggest obstacle to implementing and maintaining effective compliance programs, increasing by 5 points in this year’s survey. While competing business priorities and staffing challenges continue to rank among the top three obstacles, both edged downward compared to last year. Despite ongoing efforts to accelerate digitization, automation, and AI adoption, manual processes and spreadsheets still dominate, with 88% of respondents reporting their use “often” or “sometimes.” Planned investments in automation are led by digitizing lending processes (66%), automating regulatory change management (63%), and deploying AI, machine learning, and robotics (56%).

Top Compliance Concerns

On the compliance front, keeping track of regulatory changes remains the most persistent challenge. Implementing the Small Business Data Collection Rule, known as Section 1071, emerged as a top issue, with concerns over accurately capturing data fields up 12 points, and concerns in upgrading systems to meet requirements up 9 points. Compliance with Section 1071 ranked as the highest concern overall, with 69% of respondents citing it as a high or moderate priority, followed by fair lending laws and regulations (64%) and Bank Secrecy Act/Anti-Money Laundering requirements (56%).

Conclusions

“It’s important to note that our survey was completed prior to the announcement of a proposed rule that postponed and revised Section 1071 implementation. This development, together with the significant volatility of the overall regulatory environment, would likely have affected respondents’ answers to certain survey questions,” notes Keller. “While the impact of these changes is not yet known, we recognize that banks operate in a highly dynamic and disruptive regulatory environment. We continue monitoring developments from Washington while engaging with our customers and other stakeholders nationally to better understand and respond to potential industry impacts.”

In 2025, attitudes toward regulatory burdens shifted dramatically. A majority of respondents (67%) now expect a reduction -- an increase of 49 points from 2024. To address these burdens, technology solutions remain critical, led by workflow automation (41%), e-signature tools (32%), and lending automation (24%).

About Wolters Kluwer

Wolters Kluwer (EURONEXT: WKL) is a global leader in information, software solutions, and services for professionals in healthcare, tax and accounting, financial and corporate compliance, legal and regulatory, corporate performance, and ESG. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with technology and services.

Wolters Kluwer reported 2024 annual revenues of €5.9 billion. The group serves customers in over 180 countries, maintains operations in over 40 countries, and employs approximately 21,600 people worldwide. The company is headquartered in Alphen aan den Rijn, the Netherlands.

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“The current pullback of regulatory actions undoubtedly impacts respondents’ concerns as to measuring their ability to comply with regulatory obligations and risk management challenges,” notes Jason Keller, Wolters Kluwer FCC.