By Rachel Aldridge, MD, UK Regulatory and Compliance Solutions
With 2026 in full swing, it’s clear the volume of new regulation coming from the UK Financial Conduct Authority (FCA) will be far lighter than we’ve seen in recent years. After a near‑constant state implementation cycles, this shift marks a welcome change of pace. The FCA’s alignment with the government’s growth agenda – and its push to reduce the burden on regulated firms – means fewer headline‑grabbing initiatives and a rare bit of breathing room for firms to reassess how they operate.
But a quieter regulatory pipeline doesn’t necessarily translate into an easier year. In many organisations, the absence of major new rules has prompted chief financial officers (CFOs) to tighten compliance budgets, expecting teams to “take a look at how you can reduce cost and risk” without compromising standards. This creates a new challenge: how to maintain a robust approach while operating leaner, smarter and more efficiently.
Rather than treating this year as a lull, firms should seize it as a strategic opportunity. With fewer mandatory change projects crowding the agenda, compliance leaders can finally revisit long‑standing inefficiencies, modernise outdated processes and strengthen the foundations of their programmes. Some capacity must always be reserved for regulatory curveballs – they’re never off the table – but now is the moment to grasp the nettle and rethink how compliance is delivered.
Below are three focus areas where firms can make meaningful improvements:
1. Outsourcing non‑core tasks
Outsourcing gives organisations genuine opportunity to rethink processes while reducing cost and operational risk. This is especially true for labour‑intensive, repeatable activities such as know-your-customer (KYC) reviews, ongoing screening and certain monitoring tasks – all of which can be delivered more efficiently by specialist providers equipped with the right technology, scale and expertise.
The FCA’s expectations around oversight of outsourced activities remain unchanged: firms must retain accountability and ensure strong governance. But the market for high‑quality compliance outsourcing has matured significantly.
Providers now offer:
- Automated KYC refresh cycles with audit‑ready documentation
- Screening solutions with real‑time updates and configurable risk thresholds
- Scalable operational support during peak periods
- Enhanced management information and analytics that many in‑house teams struggle to produce
For firms under pressure to do more with less, outsourcing non‑core activities can free internal resource for higher‑value work, such as risk assessment, thematic reviews and advisory work. The potential to realise value, both financial and operational, has never been greater.
2. Targeted use of AI tools
2026 is also an ideal year to experiment with AI‑driven solutions that streamline routine processes. Some organisations are reporting reductions of up to 80% in the time spent on certain tasks by deploying AI tools to automate data gathering, summarise information and apply risk scoring.
The key is to start small and targeted, for example:
- Using AI to triage low‑risk activities
- Deploying natural‑language tools to summarise lengthy policies or regulatory updates
- Automating first‑line checks on financial promotions
- Introducing AI‑assisted workflows for incident logging or breach analysis
AI is not a replacement for human judgement, but it is a powerful accelerator. By piloting tools now, while regulatory demands are lighter, firms can build confidence, pressure-test governance frameworks and prepare for a future where AI‑enabled compliance becomes the norm.
3. Implementing compliance workflow tools
Many firms know they need better workflow tools but struggle to carve out the time for proper implementation. Whether it’s approving financial promotions, dealing with personal account (PA) dealing requests, managing employee attestations, documenting conflicts, or wider case management, these systems require thoughtful planning, process redesign and meaningful staff training.
Embedding these tools takes time – and that is precisely what a quieter regulatory year offers.
A well‑implemented workflow tool can:
- Reduce manual errors and inconsistencies
- Create clear, accessible audit trails
- Improve turnaround times
- Enhance transparency across teams
- Strengthen governance and reporting
Firms without effective workflow solutions are carrying unnecessary operational risk and often higher costs due to manual workarounds. Prioritising these tools now will pay dividends in resilience and efficiency for years to come.
Looking ahead
Despite the FCA’s stated mission to reduce the regulatory burden, the risks facing firms continue to evolve. Financial crime threats, operational resilience, data governance and conduct expectations remain firmly on the agenda. Compliance teams must stay alert, proactive and properly resourced.
Projects that were previously sidelined due to the relentless pace of regulatory change can now be revived, reassessed and delivered with proper attention, further strengthening frameworks to reduce future regulatory burden
2026 is not a year to coast – it’s a year to strengthen and modernise. Proactive investment in compliance not only eases regulatory demands but also empowers your teams, supporting morale and long‑term retention through clearer processes and a stronger operating environment.
Our experienced UK regulatory compliance team is ready to support you in building a compliance function fit for the next decade. Get in touch to discuss how we can help you refine your compliance strategy and make the most of this unique moment.
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