Regulatory scrutiny around data is intensifying, and for many financial services firms, it’s reshaping how security priorities are set. Rules governing privacy, disclosure, and resilience aren’t just bureaucratic overhead, they’re influencing the day-to-day decisions about how organizations protect their most sensitive information.
“Data security regulation is accelerating many firms’ data protection processes,” said Karl Schimmeck, Executive Vice President and CISO of Northern Trust, on the FinCyber Today podcast. “However, complying with multiple jurisdictions’ reporting regimes around privacy, incident disclosures, and decision process documentation can be tough.”
That tension between acceleration and complexity defines the regulatory environment in 2025. The question for leaders is how to move beyond box-checking to real risk reduction, without letting compliance paralyze innovation.
Compliance Beyond the Checklist
The challenge with regulation is that it can tempt organizations into narrow thinking: meet the disclosure timeline, file the report, and move on. But compliance alone is not resilience.
Organizations that thrive in demanding environments understand that compliance requirements should be viewed as a floor, not a ceiling. The real goal is protecting data in motion, at rest, and in use and being able to demonstrate that protection to regulators, customers, and the public.
That’s where governance and control come into play. If you don’t know who has access to which data, if you can’t restrict or monitor use in real time, and if you lack confidence in how data flows through your environment, you’ll struggle not just to comply but to operate securely in practice.
Regulation as a Catalyst
While navigating multiple reporting regimes can feel burdensome, regulation often provides the push needed to modernize. Security leaders know they need stronger controls over access, over sensitive fields, over data sharing across cloud platforms, but budget or business alignment can stall those efforts. Regulatory mandates change the conversation.
As Schimmeck put it on FinCyber Today: “Leaders need to understand the key pieces of regulation — especially cybersecurity, data protection, and resilience — impacting financial services, because management is more involved than ever.”
In this way, compliance becomes a tailwind. By demanding higher standards of reporting and governance, regulators are indirectly accelerating modernization across sectors like financial services. The outcome isn’t just a stronger compliance posture but a more resilient organization overall.
What Regulators Really Want
Strip away the dense language of most regulatory frameworks, and the message is simple: protect continuity and safeguard trust. Regulators want assurance that if something goes wrong, organizations understand how it happened, can contain the impact, and can continue to operate responsibly.
That requires more than an incident plan. It requires clarity on data itself, where it resides, who touches it, how it’s being used, and how quickly you can restrict access when risks arise. Without that level of control, organizations are left scrambling when regulators come calling.
This is where modern approaches to policy unification, data protection controls and database activity monitoring become indispensable. By governing sensitive data down to the field level, applying consistent policies across databases and cloud platforms, and maintaining robust audit logs, firms can prevent misuse but also demonstrate accountability when regulators demand proof.
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Risk Management as a Shared Responsibility
One of the most meaningful shifts in recent years is the recognition that data security is no longer a siloed function. It’s an enterprise-wide risk issue.
That means responsibilities are expanding: CISOs and security teams must safeguard systems and enforce access controls; data teams must classify sensitive information, manage its quality, and ensure it’s accessible under the right policies; and GRC teams must interpret regulatory obligations, monitor adherence, and prepare the organization to demonstrate compliance. Business leaders, meanwhile, need to understand how their processes expose or protect data, and boards must evaluate cyber resilience alongside financial and operational risk.
The CISO may lead the charge, but durable resilience requires collective ownership. Strong governance frameworks with clear visibility and standardized controls across security, data, and compliance functions are what bridge technical and business domains.
Or as Schimmeck noted: “At the end of the day, we’re all risk managers.”
Setting the Right Bar
For global organizations, one of the hardest questions is where to set the standard. Do you aim for the strictest jurisdiction and apply it everywhere? Or do you patch together varying levels of compliance depending on geography?
The first option adds cost but brings consistency and clarity. The second may save money upfront but risks confusion and gaps when regulators or auditors dig in.
The smarter approach is to anticipate the highest bar and build governance frameworks that can stand up anywhere. That doesn’t mean overengineering, but it does mean designing access and monitoring systems flexible enough to align with evolving requirements whether they come from GDPR, U.S. regulators, or emerging AI-focused oversight.
The Coming Wave: AI and New Technologies
The next regulatory frontier is already here. AI is drawing scrutiny, not only for its outputs but for how it ingests and uses sensitive data. Financial institutions, in particular, face questions about explainability, bias, and data provenance.
The lesson is clear: whether you’re managing customer data today or training algorithms tomorrow, regulators care less about the technology and more about risk. Organizations that have invested in field-level governance, policy-based access control, and transparent monitoring will be better positioned to adapt to whatever oversight emerges.
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And this isn’t a one-off challenge. It’s the same tension that defined the start of this conversation: accelerating innovation while navigating mounting regulatory complexity. AI is simply the next arena where financial services firms will be pressed to prove they can do both.
Wrapping Up
Regulatory pressure should be seen as an opportunity to align security practices with what really matters: reducing risk and maintaining trust. Compliance may spark the conversation, but governance and protection sustain it.
Three commitments stand out for organizations navigating this environment:
- Go deeper than compliance. Build controls that govern data at the level regulators — and customers — actually care about.
- Leverage regulation to modernize. Use mandates as justification to implement controls you already know you need.
- Treat trust as the ultimate metric. At the end of the day, what regulators, boards, and customers all want is assurance that data is safe and resilience is real.
The regulatory environment will only grow more complex, but that complexity doesn’t have to be paralyzing. With strong governance, consistent controls, and a mindset that puts risk reduction over box-ticking, organizations can turn compliance from a burden into a competitive advantage.