The experimental adoption of novel tools no longer defines the Regulatory Technology (RegTech) landscape of 2026, but rather the industrialised execution of compliance infrastructure.
As financial institutions navigate the full implementation of the EU’s Digital Operational Resilience Act (DORA) and prepare for the delayed but inevitable Basel 3.1 standards, the focus has shifted from “having AI” to “governing AI”.
The era of pilot programmes is over; in its place is a disciplined demand for systems that not only flag risks but also resolve them. With the global RegTech market projected to reach between US$19.5 billion and $33.1 billion this year, the industry is no longer novel.
2026 is the year of ‘Agentic AI’, where autonomous agents replace static rules, and compliance becomes a real-time operational layer rather than a retrospective reporting function. This article explores the critical shifts defining the sector today.
From ‘Check-Box’ to ‘Execution’
For the better part of a decade, financial institutions treated RegTech as a procurement exercise, a way to digitise manual checklists.
In 2026, that mentality has become obsolete. Regulators are no longer impressed by the mere existence of sophisticated software; they are scrutinising the outcomes those systems produce.
The Financial Conduct Authority (FCA) and European supervisors are increasingly penalising firms that have the right tools but fail to stop financial crime due to poor integration or slow decision-making.
This evolution is best captured by Brad Levy, CEO and Board Member at ThetaRay:
“Regulators now care less about what tools banks buy and more about how AML cases actually get resolved and reported. That shift toward execution is healthy. It is pushing RegTech to deliver intelligence at machine speed, embedded in how investigations actually work. This is the moment AI stops being a tool and starts becoming compliance infrastructure.”
The distinction is critical. In 2026, ‘infrastructure’ means that compliance is not a sidecar application but the engine itself. Banks are moving away from batch-processing transaction monitoring to sub-second, streaming decision-making, ensuring AML checks occur during the transaction rather than hours later.
The Governance of AI: Beyond the Black Box
As reliance on artificial intelligence deepens, the regulatory spotlight has turned to the ‘black box’ problem. The implementation of the EU AI Act’s high-risk rules has forced firms to prove exactly how their algorithms reach decisions.
It is no longer sufficient to deploy a model that reduces false positives; firms must now demonstrate a clear lineage of decision-making, data privacy, and bias mitigation.
Alex Layng, Vice President of Product at RadarFirst, argues that this has fundamentally changed the role of governance:
“AI governance is becoming the connective tissue between regtech and operational risk. Regulations are no longer just about whether a rule was violated. They are about whether an organisation can demonstrate responsible design, oversight, and accountability for automated systems. Regtech platforms must evolve to support this by embedding governance frameworks directly into workflows. That means linking policies, risk assessments, incident response, and reporting into a single operational system rather than treating them as separate compliance exercises.”
This “connective tissue” approach is evident in the rise of platforms that automate compliance documentation as much as the compliance itself, automatically generating the audit trails required by the EU AI Act.
Agentic AI: The New Workforce in AML
If 2024 was the year of Generative AI, 2026 is the year of Agentic AI. Unlike passive chatbots that summarise text, AI agents are autonomous systems capable of planning, reasoning, and executing complex workflows. In the realm of Anti-Money Laundering (AML), these agents are revolutionising the role of the investigator.
Rather than a human analyst manually gathering data from five different systems to investigate a suspicious activity report (SAR), Agentic AI systems now autonomously retrieve the data, analyse the transaction history, cross-reference it with adverse media, and draft the SAR for human review.
Industry analysis suggests that this shift is driven by the need for predictive defence, moving compliance from a reactive stance to a proactive one. However, as these agents become more autonomous, the demand for “explainability” has skyrocketed, with regulators requiring that every “agentic” decision remains transparent and traceable.
DORA: Operational Resilience as the New Compliance Standard
With the Digital Operational Resilience Act (DORA) now fully enforceable, 2026 sees financial entities grappling with the reality of mandatory incident reporting. DORA has elevated ICT risk management from an IT concern to a board-level compliance obligation.
The regulation requires firms to report major ICT-related incidents to competent authorities within strict timeframes. This has spurred a wave of “ResilienceTech” adoption, platforms designed solely to map critical third-party dependencies and stress-test digital operations.
It is no longer enough to have capital buffers; firms must prove they can withstand a cyber-attack or a cloud outage without destabilising the wider financial system.
Basel 3.1: The ‘Parallel Run’ Year
While the UK’s Prudential Regulation Authority (PRA) has delayed the full implementation of Basel 3.1 to January 1, 2027, 2026 has become a critical “parallel run” year. Banks are using this time to overhaul their data granularity.
The new capital requirements demand a level of data precision that legacy systems struggle to provide. RegTech solutions in 2026 are heavily focused on “calculation engines” that can run the new standardised approaches alongside internal models to identify capital inefficiencies.
The delay has provided breathing room, but it has also removed any excuse for unpreparedness. The focus is now on data lineage, proving to the regulator that the data used to calculate capital is accurate at its source.
The Cost of Compliance: 2026 Statistics
The financial burden of compliance continues to rise, but the nature of the spend is changing. The global market for financial crime compliance alone is projected to grow from US$26.52 billion in 2025 to $29.23 billion in 2026, according to Fortune Business Insights.
However, a “simplification” trend is emerging. Rather than adding more tools, firms are consolidating their stacks. The goal for 2026 is to reduce the “cost of bad compliance”, the fines and remediation costs, by investing in higher-quality, integrated platforms. This value-driven approach sees organisations prioritising efficiency over volume, cutting through the noise of alert fatigue.
Crypto’s ‘Grown Up’ Phase: MiCA and Beyond
2026 marks the end of the “Wild West” era for digital assets. The EU’s Markets in Crypto-Assets (MiCA) regulation is in full swing, and the UK is set to establish its comprehensive stablecoin regime by July 2026.
RegTech for crypto has consequently matured. Solutions are no longer just about wallet screening; they now encompass full prudential reporting, travel rule compliance at scale, and market abuse surveillance that rivals traditional equity markets. The “regulatory exceptionalism” for crypto is over; in 2026, a crypto asset service provider faces the same rigorous scrutiny as a traditional investment bank.
Case Study: Central Bank of Brazil’s SupTech Transformation
It is not just commercial banks that are upgrading; regulators are too. A prime example in 2026 is the Central Bank of Brazil (BCB). The BCB has prioritised the use of advanced data analytics and AI in supervision, moving towards a “SupTech” (Supervisory Technology) model.
By investing in an institutional cloud platform and training staff in data science, the BCB is transitioning from periodic, manual oversight to continuous, automated supervision. This allows the regulator to ingest vast amounts of granular data from financial institutions and to run AI models to detect systemic risks in real time.
For banks, this means the regulator is now as technologically sophisticated as the firms they supervise, raising the bar for data quality and reporting speed.
The Rise of ‘RegOps’
Finally, 2026 sees the crystallisation of RegOps (Regulatory Operations), a discipline inspired by DevOps. Just as DevOps merged development and operations to speed up software delivery, RegOps merges compliance and operations to accelerate regulatory compliance.
This approach utilises “Compliance-as-Code,” where regulatory rules are translated into machine-readable code that is integrated into the software development lifecycle.
By catching compliance issues during the coding phase rather than after deployment, firms are drastically reducing their regulatory debt. In 2026, RegOps is a methodology that enables rapid Fintech innovation to coexist with the rigid demands of regulators.