Major Regulatory Milestones on the Horizon for 2025
As we approach 2025, the regulatory landscape for financial institutions is poised for significant transformation. Several key regulations will shape the way banks and financial entities operate, emphasizing stability, cybersecurity, sustainability, and anti-money laundering measures. Here are the major developments to watch:
1. CRR III / CRD VI Banking Package
Built on the Basel III framework, the CRR III / CRD VI Banking Package introduces updated capital requirements, enhanced risk assessments, and stringent reporting obligations. These changes aim to bolster the financial stability and resilience of EU banks.
2. Digital Operational Resilience Act (DORA)
Effective January 2025, DORA sets a new benchmark for IT resilience across financial institutions. It emphasizes robust cybersecurity measures and stringent data protection protocols to safeguard against operational risks in an increasingly digital financial ecosystem.
3. Payment Services Directive (PSD3)
PSD3 aims to enhance customer authentication and improve data-sharing standards between banks, payment providers, and third-party services. This directive is expected to foster a safer and more interconnected financial ecosystem across the EU by 2026.
4. Sustainable Finance Disclosure Regulation (SFDR)
ESG compliance continues to be a priority under SFDR. Financial institutions and market participants are required to disclose detailed information about the sustainability of their investment products, pushing the industry toward greener practices.
5. Anti-Money Laundering Authority (AMLA)
The AMLA Regulation establishes a dedicated European authority to oversee high-risk financial entities and harmonize anti-money laundering standards across the EU. This initiative is a significant step toward a unified approach to combating financial crime.
Additional Regulations to Watch
In addition to these major changes, updates such as BIRD/IREF, MiCAR, and DAC8 are also on the horizon. These regulations will further impact reporting requirements, digital assets, and tax transparency.
Navigating Compliance in a Complex Landscape
While these regulations present challenges, they also highlight the critical role of RegTech solutions in enabling financial institutions to adapt effectively. As the demand for robust compliance tools grows, organizations equipped with innovative technologies will be better positioned to navigate these changes and thrive in an evolving industry.