The global implications a new Trump administration will have on corporate compliance is something financial services organisations with an international presence are thinking about as the countdown begins until Donald Trump assumes the US presidency in just about a month. 

It’s anticipated that the inauguration of a conservative administration under President Trump will significantly reshape the regulatory environment for most companies, specifically in areas of compliance. We only have to look at Trump’s previous tenure, where his approach to governance often favoured deregulation and reduced governmental oversight. Of course, this was alongside sometimes erratic behaviour which could prompt changes in how businesses handle a range of compliance issues.

As Lisa McStay, Chief Operating Officer at Continuity2, told us, “Historically, the Trump administration leaned towards deregulation across several industries, which may suggest similar shifts if these policies are reinstated. This could lead to a relaxation in oversight, potentially altering compliance requirements in key areas.”

Short term ease, long term risks?

According to McStay, regarding the sector of financial services “while deregulation might ease short-term operational costs, it could create risks for firms managing operational resilience and compliance with global standards, particularly under frameworks like DORA in the EU or FCA/PRA in the UK.” And as McStay adds,  the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) are “high on the agenda for many financial institutions at the moment.”

There’s no doubt the FCA and the PRA have become central to the agenda of UK financial services institutions. But this is not without cause. Regulatory scrutiny is currently at an all-time high, and both those organisations have sharpened their focus on areas like operational resilience, financial crime prevention, consumer protection and governance.

A complex financial world needs more guidance 

Financial services firms are increasingly navigating the complexities of digital finance, innovations in fintech and of course cryptocurrency. To address these emerging risks, the FCA and PRA have come out with new guidance. At the same time, macroeconomic pressures like inflation, rising interest rates and geopolitical tensions have underscored the need for financial stability, which is a key focus for the PRA.

Operational resilience is also taking center stage, with firms expected to prove they can withstand disruptions to critical business services. As McStay noted, the EU is trying to get a handle on emerging technologies and resilience with its Digital Operational Resilience Act (DORA) which mandates that financial institutions and critical sectors strengthen their cybersecurity frameworks. It comes into force as of January and financial companies that use digital security need to get ready. 

DORA’s objective is to ensure “digital operational resilience” in the EU’s financial sector. This  means that banks, insurers, investment firms and even their third-party tech providers will need to withstand digital disruptions, cyber threats and operational breakdowns. It’s worth noting that DORA affects companies outside the EU if they do business with EU-based clients, rely on EU-based third-party service providers or have branches or subsidiaries operating in the EU.

For financial institutions, staying ahead of all these evolving demands is essential—not just to avoid penalties, but also to thrive in an environment where regulatory expectations can shape the future of the financial services industry.

Join us for a special webinar: The US Election and Compliance – Navigating the challenges of the second Trump Administration.