Regulatory expectations within financial services continue to rise, shaped by geopolitical tensions, new risk categories, technological disruption, and shifting consumer behavior. In this environment, governance cannot risk remaining static. Leading institutions are increasingly recognizing that outdated frameworks introduce vulnerabilities rather than mitigating them. As global supervisors push for stronger oversight, transparency, and adaptability, governance must evolve in step.
Eric Pelletier, a seasoned risk and compliance leader with experience across public and private sectors, underscores the scale of change. “The regulatory landscape is constantly shifting,” says Pelletier, who notes that regulatory expectations will continue to evolve in response to emerging risks, supervisory priorities, and broader market pressures. It is a reality that has profound implications for how organizations design and manage their governance programs, with regulatory intensity reshaping cost structures across the industry. For example, retail and corporate banks have seen operating costs spent on compliance rise by more than 60% compared with pre-financial-crisis levels.
Institutions that maintain legacy structures risk diminishing their resilience and competitiveness as updates emerge with little warning. Those able to adapt quickly report stronger operational readiness and more efficient supervisory interactions.
Legacy Governance No Longer Works
Traditional governance programs were built for slower, more predictable regulatory cycles. Today, the pace has changed. Supervisors issue guidance with greater frequency, global standard-setters coordinate more tightly, and expectations increasingly extend beyond compliance into culture, conduct, operational resilience, and consumer outcomes.
Legacy frameworks often fail because they weren’t designed for this constant movement. They struggle to integrate new rules, align with cross-border expectations, or scale across global business lines. This creates gaps that accumulate silently until they manifest as inefficiencies, audit findings, or regulatory action.
McKinsey’s 2025 Global GRC Benchmarking Survey, for example, finds that governance, risk, and compliance are still a “work in progress” for most organizations, with gaps in documentation, oversight, and risk culture all linked to weaker overall governance and risk practices. Companies with more mature frameworks, by contrast, tend to have clearer mandates, stronger board engagement, and better use of technology to support governance at scale.
The difference lies in preparedness. Governance must be built for iteration, ongoing review, and structural flexibility. “Governance is not a checkbox,” Pelletier says. “It is a dynamic, evolving discipline.” A modern program must incorporate strong evaluation mechanisms, clear ownership structures, and streamlined documentation so that updates can be implemented without operational friction.
Integration Is No Longer Optional
A defining feature of effective governance is integration. Programs that exist solely within compliance or risk teams miss critical context generated by frontline decision makers. When governance is disconnected from business operations, institutions develop blind spots that weaken oversight.
The stronger model embeds governance into the natural workflow of the organization. It ensures that expectations are translated from policy into real behaviors, and that business leaders take shared responsibility for regulatory obligations. This integration also shapes institutional culture, fostering transparency and reducing the perception that governance is a separate or punitive exercise.
“Modern governance must be embedded across business functions,” he says, pointing to how integrated governance supports better information flow, more consistent decision-making, and clearer accountability.
Agility Defines the Next Generation of Governance
The pace of regulatory transformation shows no signs of slowing. New technologies, global coordination among regulators, and increased public scrutiny of financial institutions are accelerating supervisory expectations. This makes agility a competitive advantage. Accenture’s 2024 Risk Study found that 72% of high-performing institutions cite agile governance capabilities as a core driver of operational resilience.
Governance programs must be capable of adjusting quickly, whether implementing a new regulatory requirement, responding to geopolitical developments, or interpreting updated supervisory guidance. “Agility is the new standard,” Pelletier says. However, the goal is not simple reactivity but thoughtful adaptability. Agile governance rests on strong foundations: modernized technology, structured escalation pathways, decision frameworks that allow for quick interpretation, and teams trained to understand nuance, not just policy language.
Preparing Governance Programs for What Comes Next
Pelletier’s experience designing global risk frameworks shows that institutions that succeed in navigating regulatory complexity will be those that invest not only in updated policies but in adaptable structures, integrated practices, and technology that enables real-time insight.
“As regulatory complexity grows, the institutions that thrive will be those that invest in integration, technology, and adaptability of resources,” Pelletier says. Governance must evolve with equal complexity, supported by frameworks designed to scale and built for constant refinement.
Strong governance enhances clarity across teams, accelerates decision making, and fuels innovation in areas such as digital transformation, product development, and customer experience. It becomes a strategic asset.
To explore more of Eric Pelletier’s insights on governance, regulatory transformation, and risk management, connect with him on LinkedIn.
