Energy prices pivot on a tweet, the EU Artificial Intelligence Act rolls out in stages from 2025, and under the EU Instant Payments Regulation fraud windows shrink to seconds. Static control stacks won’t keep pace and so governance must move at market speed and firms need a truly nimble compliance framework. Consider the current context.
The volatility we’re really in:
Policy whiplash and rule phase-ins
From the outset, compliance in the EU and the UK is no longer about setting and forgetting. The EU Artificial Intelligence Act entered into force on 1 August 2024, but its obligations roll out over time (for example bans on certain AI practices and general-purpose AI model requirements). Corporates that deploy large‐language models or high-risk AI systems must already reassess governance, documentation and monitoring frameworks. Meanwhile, the Digital Operational Resilience Act (DORA) became applicable from January 2025, imposing strict ICT-risk, incident reporting and third-party-provider rules on financial entities. And then there’s the NIS2 Directive, where transposition by member states hit October 2024 yet uptake remains uneven, creating asymmetric obligations across the bloc. The result: firms must version their control stacks rather than rely on monolithic frameworks.
Trade, sanctions and supply chains
Supply-chain and trade risks are accelerating too. The EU recently adopted its 19th sanctions package against Russia, targeting energy imports, banks, crypto providers and third-country intermediaries and meaning that compliance teams must refresh measurement and screening rules almost mid-quarter. Simultaneously, the Carbon Border Adjustment Mechanism (CBAM) moves from transitional reporting (to end-2025) to certification and embedded data obligations in 2026. Carbon intensity now sits firmly in the compliance domain. These shifts underscore that compliance is as much about trade-strategy and supply-chain transparency as it is about internal controls.
Payments, consumers and culture
Even payments and consumer-regulation aren’t immune. The Instant Payments Regulation obliges euro-zone credit-transfer service-providers to offer instant credit transfers and embed fraud-screening in seconds, not days. In the UK, the Consumer Duty now covers closed products (July 2024), and the UK’s Critical Third‑Party (CTP) regime took effect in January 2025 elevating supplier risk to board-level. Broadly, culture, speed and third-party dependencies are no longer peripheral, they’re central to the compliance landscape.
If the environment iterates weekly, compliance must iterate continuously.
In the following section, a nine-point possible blueprint is offered for a way in which this rapid iteration might operate.
What a nimble compliance framework looks like
- “Two-speed” governance: durable guardrails + flash rules
In today’s EU/UK landscape, management must differentiate enduring guardrails (such as ensuring fair customer outcomes, data minimisation and resilience) from flash rules which are temporary, tactical directives triggered by specific events. For example, a firm may have a permanent principle of “we will not tolerate sanctions-breach exports” (guardrail), but when the EU Artificial Intelligence Act phases in new requirements for general-purpose AI models, a flash rule may be drafted, approved and retired within days to enforce new logging obligations.
Each flash rule should carry an expiry date to prompt review, and a changelog must map each directive against obligations (e.g., AI Act staging, DORA RTS updates, national transposition variances of NIS2 Directive). This dual-speed model ensures governance remains both stable and responsive.
2. Compliance-as-Code (CaC) for real-time adjustability
The concept of Compliance-as-Code means codifying key policies into machine-readable, testable workflows. For example, under DORA a firm might tag all ICT assets by criticality, then enforce via automated tests that no high-criticality asset remains without recovery-time documentation. Similarly, for the CBAM, data-lineage controls can block a transaction from proceeding if the embedded-emissions mark-up is missing or fails a schema validation. A firm’s CI/CD pipeline can deploy a compliance rule at the same time as a functional update. To keep traceability, maintain a mapping dictionary that links each control to the source obligation (e.g., “AI Act Art 10 – training data quality”, “DORA Art 28 – third-party risk”), enabling quick impact analysis when regulators issue new guidance.
3. Regulatory change radar powered by AI — but auditable
To scan regulatory changes efficiently, firms can deploy large-language models (LLMs) to ingest regulatory texts (e.g., ESAs guidelines, Financial Conduct Authority Dear CEO letters, export-control updates) and triage into categories: No change, Flash rule required, or Board alert. But given the risk of black-box AI, each output must be accompanied by a model card and traceable prompt to align with the transparency ethos of the AI Act. Additionally, firms should score “jurisdictional drift risk” (for example, if one EU Member State interprets NIS2 differently, or the UK diverges post-Brexit) so that rollout priority is aligned with the greatest regulatory delta.
4. Operational resilience by design: test, don’t trust
Under DORA (EU) and the UK’s mirrored regime, firms must demonstrate resilience, not just document it. For example, a bank might schedule quarterly “kill-switch” drills on its cloud-provider environment, mimicking the failure of a core payments node, to evidence readiness. A good practice is to keep playbooks for severe but plausible events: (i) major AI model takedown following a transparency breach, (ii) rapid sanction redesignation of a key supplier, (iii) a surge in instant-payments fraud. Highlighting the UK, regulators required firms to set impact tolerances by 31 March 2025; now the focus is on continuous improvement. Resilience must be embedded in infrastructure, process and culture – not left to audit alone
5. Third-party and fourth-party concentration: a sharper lens
A nimble framework treats third-party concentration as a dynamic hazard. Build a dependency graph that visualises not only your direct suppliers but their suppliers (fourth-parties) and flags those at risk of designation under EU/UK regimes. For example, the UK’s CTP Regime applies from 2025 to firms whose failure could threaten financial-system stability. Treat “CTP-like” providers even if not formally designated: run resilience attestations, exit-drills and recovery-time tests. This sharper lens ensures you spot systemic risk early.
6. Sanctions intelligence that looks for evasion, not just names
Effective sanctions compliance now demands more than list-matching. Use network-analytics (ownership/control inference, payment-flow anomalies, shadow-fleet heuristics) to detect evasion patterns. For instance, when the EU adopted its 19th package against Russia, compliance teams needed to detect circumvention via third-country banks or crypto corridors. Incorporate contracts with “no-Russia clause” templates for high-risk regions and centralise derogation tracking so that flash-rules can be issued quickly when new sanctions emerge.
7. Carbon at the border: CBAM-ready data pipelines
Under CBAM, embedded-emissions data must be collected, verified, reconciled and stored with the same rigour as KYC. Create supplier data-contracts with schema validation and audit trails so that when quarterly CBAM reporting hits, you are ready, not scrambling. Use synthetic data in testing to validate transformation logic without exposing sensitive counterpart-data. Treat latent-carbon as a compliance input, not a sustainability afterthought.
8. Instant payments and the 60-second control
The acceleration of payments, especially under the EU Instant Payments Regulation, shrinks fraud-windows from days to seconds. For example, pre-transaction risk controls might inspect device-fingerprint, anomaly-score and Confirmation-of-Payee friction before approving a transfer, while post-transaction recovery playbooks align with counterpart banks. Maintain a KPI such as decision-latency budget ≤ 200 ms so fraud-controls play in real-time, not lag behind. Nimble compliance means your instant-payments guardrail can be updated in hours, not months.
9. Culture and accountability without bureaucracy
In the UK, the reform of the Senior Managers & Certification Regime (SM&CR) signals that culture and individual accountability will remain front-and-centre. Replace sprawling “policy forests” with single-page standards and embed micro-training nudges in day-to-day tools (e.g., chat-ops, workflow alerts) rather than vast manuals. Assign clear owners for flash-rules, include escalation ladders visible to all, and make control refreshes part of the team’s sprint backlog. A culture aligned with nimble governance is the final piece.
Operating Model
In our agile framework a small, empowered ‘Change Authority’, comprising Legal, Risk, Technology and Operations. meets weekly to review the regulatory radar, decide on flash-rules, approve change-and-control pull-requests, and schedule resilience drills. At the quarterly board meeting, the compliance team presents key metrics, including rule cycle-time, percentage of controls encoded in software, supplier-concentration scores, sanctions false-negative test results, and fraud‐loss on instant payments per million. This operating model embeds compliance into the operational fabric, ensuring the function remains both dynamic and measurable. The compliance function that thrives now treats regulation as living software, which is continuously integrated, testable, auditable and capable of pivoting with geopolitics, technology and markets. In the EU and UK, the winners will evidence agility as much as adherence.
And what about you…?
- How adaptable is your current compliance framework when faced with rapid regulatory or geopolitical change?
- What indicators or metrics would best demonstrate agility as well as adherence in your own compliance reporting?
