Most industries are passive recipients of artificial intelligence. Financial regulation is not. Regulators are both being transformed by AI and acting as the gatekeepers deciding how much of its gains reach the financial industry. That dual position will define the next decade of finance more than any single technology, firm or policy. It will separate the financial centres that lead from the ones that get bypassed.
I know this because I have spent the last several years building one of those regulators from scratch.
Before VARA, I spent over a decade advising financial institutions on cybersecurity and technology risk. What I see now from the other side is that the infrastructure through which oversight is delivered matters as much as the rules themselves. That is where real transformation is happening.
An uneven starting point
Tier 1 banks spent more than a decade and billions of dollars on regulatory technology, with mixed results. Thomson Reuters’ annual Cost of Compliance surveys show compliance budgets and headcount climbing steadily, with productivity gains linear at best. The 2023 wave of large-language-model adoption produced widespread experimentation but very little production deployment in compliance-critical workflows, because the cost of a wrong answer in regulation remains higher than the cost of a slow one.
