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In 2024, the character of change is more foundational – or fundamental – in nature than ever before. From ESG to AI, the shape of the world we live in is changing in a radical way. In this, our annual Global Outlook, we look at the paths through the shifting landscape for firms seeking solid ground.

The shape of regulatory change, as ever, is influenced by geopolitical, technological, and socio-economic factors. As those factors move at speed, financial services regulators are under pressure to keep ahead of the game. We look at how effectively they are doing this globally: juggling the competing demands of financial stability, consumer protection, market confidence, competition and innovation – and, in some cases, economic growth and competitiveness.

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Without question the regulatory expectations are getting higher. This applies to individuals as well as firms. We see how individual accountability regimes are evolving and where change is afoot in 2024 – even in the most established of regimes.

While regulatory enforcement cases can be slow to deliver a public outcome, when they do appear (and we anticipate we may well see more cases in respect of senior individuals this year), they provide useful insights. We've started to see this coming through in the operational resilience arena where the relationship between parent and subsidiary has come to the fore. 

When it comes to clarity about their expectations, however, some regulators are doing better than others. Regulators tend to reward proactivity and co-operation, but how they calculate that 'reward' can be oblique.

An apparent focus on new risks – ESG, AI, cryptoassets – should not be understood as casting old friends aside – financial crime risk, for one, continues to evolve, presenting novel challenges for firms.

Within the big trends, regulatory approach can be a bit of a patchwork, making interpretation and implementation challenging for global business, not least in respect of ESG, which remains high on the enforcement risk watchlist, with regulators examining whether actions accord with words. 

Global Bank Review 2023

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