The financial services industry is experiencing dramatic transformation, challenging both regulators and traditional financial services firms to keep pace.

Fueled by rapid emerging technologies, global interconnectedness, changing economic and jurisdictional factors, competition and consumer demand, firms are innovative—embracing new business models and adopting automation to support their operations and regulatory obligations. As firms pursue greater agility and resiliency, they are expanding their use of advanced data analytics, artificial intelligence, and innovating technologies, triggering further risk governance adjustments and regulatory attention in areas including safety and soundness and consumer protections.

In 2019 and beyond, regulators will assess how firms are adapting to market pressures and managing the associated risks, focusing on firms’ operational resilience, governance and controls, data security, and consumer protections – and expecting all to align with ethical and sound conduct practices.

KPMG highlights the key drivers and actions for firms in the following Key Ten Regulatory Challenges for 2019:

1. Divergent regulation
2. Risk governance and controls
3. Data privacy
4. Compliance processes
5. Credit management
6. Cybersecurity
7. Ethics and conduct
8. Consumer protections
9. Financial crimes
10. Capital and liquidity