Five Regulatory Reporting Market Trends to Watch:

Author:

Kathleen Keenan
Chief Product Officer at Confluence

Key Takeaways

• The rise of alternative investments is contributing to increased compliance considerations for some firms, leading to increased demand to centralize data infrastructure, automate filings, and leverage managed services.
• AI is becoming increasingly important in compliance workflows, helping firms manage complex reporting requirements, enhancing efficiency, speed, and accuracy.
• Co-sourcing has become a proactive strategy, enabling firms to scale operations, access specialists, and improve compliance outcomes while maintaining process transparency and control of their data.
• Many firms are consolidating technology vendors to reduce complexity, eliminate data silos, and improve governance, with modular platforms becoming more popular.

The regulatory landscape is complex and constantly evolving. Across financial services, firms are facing a wave of change: tighter deadlines, deeper disclosures, and shifting expectations from regulators and clients. Balancing deregulation in some jurisdictions while obligations expand in others, today’s compliance leaders are challenged to keep up and adjust faster than ever before.

Many firms aiming to stay competitive are exploring ways to strategically simplify operations by turning to automation, managed services, vendor consolidation, artificial intelligence (AI), and flexible platforms that can handle new asset classes and investor types. The result is better compliance and more resilient, cost-effective operations that scale.

Here are five regulatory reporting marketing trends driving this transformation, and what forward-looking compliance leaders are doing about them.

1. Growth of Private Funds: More Assets, More Complexity

The rise of alternative investments can have significant ramifications from both portfolio and compliance perspectives. Private market assets are projected by some analysts to exceed $25-$30 trillion by 2030, with private debt currently accounting for over $1.6 trillion or about 10% of the alternative investment universe. And the growth isn’t slowing: 85% of private fund managers plan to launch new funds in the next three years, further amplifying compliance burdens.

This expansion brings a host of new reporting demands. The democratization of access via fractional ownership and hybrid retail/institutional products means firms must meet different regulatory standards simultaneously. Add in the impact of updated Form PF requirements, AIFMD II, and cross-border disclosure regimes, and legacy systems and workflows may face challenges adapting to new demands.

Alternative investment management firms and service providers preparing for this future are centralizing their data infrastructure and leveraging managed services to scale without adding overhead. Consolidated platforms that can flex across jurisdictions and asset classes will be essential for navigating this next wave.

2. AI in RegTech: From Experimental to Essential

AI has moved beyond innovation labs and pilot programs, making its way into compliance workflows. AI is on track to act as a foundational tool, especially as reporting becomes more frequent, complex, and time-sensitive.

According to KPMG, 68% of financial services firms say AI for compliance and risk management is a top priority. In addition, McKinsey & Company says 40% of companies expected a boost to labor productivity from AI, enabling employees to focus on more strategic tasks. And while AI adoption is growing rapidly (Gartner says 76% of mid-sized enterprises are either investigating new AI products or exploring AI business models), questions about governance, transparency, and trust remain front and center.

In regulated environments like financial services, AI must be applied with discipline; but when deployed responsibly, it can transform workflows. For example, in SEC-mandated Tailored Shareholder Reports (TSRs) and similar requirements in Canada, AI may help teams speed up report quality and review cycles by intelligently reconciling information between TSRs and annual financial reports. The most mature firms are pairing AI with rigorous human oversight and model governance frameworks to bolster accuracy and accountability.

3. Data Management & Automation: From Bottleneck to Backbone

Data sits at the heart of every regulatory report. However, for too many firms that data is fragmented, manually processed, and difficult to trace, which can slow down compliance teams and increase the risk of errors. According to a Regnology survey, 53% of capital markets firms cite manual effort and lack of automation as top regulatory reporting challenges. At the same time, a Cappitech report found 56% of firms plan to increase their automation over the next 12 months.

As reporting data requirements grow more granular, manual processes struggle to keep up. Leading firms are now investing in platforms that automate the full regulatory reporting process, from ingestion and normalization to calculation and filing, to reveal only exceptions for review. This approach can improve efficiency and give compliance professionals much-needed focus on analysis, oversight, and strategic value.

4. Co-Sourcing: From Back-Office Fix to Strategic Advantage

Co-Sourcing has evolved in the regulatory reporting world. What was once a reactive solution for capacity shortfalls is now a proactive strategy to scale operations and improve compliance outcomes. A recent Carne Group study found that 79% of firms expect to increase their use of third-party fund management administration, while 91% say they expect regulatory complexity to grow, leading them to further accelerate their shift to outsourcing.

This growing reliance on managed services is shifting from simply reducing headcount pressure to gaining access to experienced specialists, improving response time to regulatory changes, and deploying robust processes that may be difficult or inefficient to maintain in-house. The most effective compliance teams now treat external partners as extensions of their organization—integrated into workflows, aligned with goals, and accountable for outcomes.

5. Vendor Consolidation: The Push for Platform Efficiency

Firms are also taking a hard look at their technology stack, where many find too much complexity. In a CIO.com study, 95% of IT and business leaders said they plan to consolidate vendors within the next 12 months, while 80% acknowledged an overreliance on disconnected point solutions.

This fragmentation comes at a cost in terms of overlapping functionality, data silos, inconsistent controls, and slower implementations. Unsurprisingly, more firms are shifting to modular, flexible, and scalable platforms capable of handling multiple reporting regimes and use cases under one roof. These platforms can offer greater efficiency while supporting better governance, easier change management, and a unified view of compliance risk.

Turning Regulatory Complexity into an Operational Advantage

Regulatory obligations have become more demanding but meeting them doesn’t have to mean operational chaos. Firms that adopt these five core pillars may be better positioned to navigate future regulatory challenges:

1. Infrastructure built for the unique demands of private funds and alternatives

2. AI-enabled workflows that enhance speed and consistency

3. Data-first architectures with embedded automation

4. Co-Sourcing with managed services that extend internal capabilities

5. Strategic vendor consolidation for simplified tech stacks

For compliance executives, the mandate is clear: simplify, scale, and stay ahead. The firms that do will reduce risk and cost, while creating a future-ready foundation for navigating whatever comes next.

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