EY flags localization as the defining regulatory shift for financial firms

Global financial regulation is moving from fragmentation toward localization, creating a more complex operating environment for cross-border financial services firms. National regulators are increasingly rewriting rules around domestic priorities, with the US focused on deregulation and innovation, the EU on simplification and competitiveness, the UK on growth, Asia-Pacific on fintech and market development, and Latin America on financial inclusion and consumer protection.

AI adoption is advancing faster than oversight. More than 70% of banking firms report using agentic AI to some degree, with 16% having fully deployed solutions and 52% running pilot projects. Regulators in the US, EU, UK and Asia-Pacific are taking different approaches, pushing firms to strengthen AI governance, model management, data security, audit trails, employee-use controls and third-party risk oversight.

Digital assets and payments are also becoming more regionally defined as stablecoin rules develop across the US, Brazil, the EU, Hong Kong, Japan, South Korea, Singapore, the United Arab Emirates and the UK. Cybersecurity and operational resilience are gaining urgency as supervisors scrutinize critical third-party technology providers, while consumer protection standards are shifting as customer expectations rise and regulators examine fairness, fees, fraud exposure and accountability across partner networks.