Regulatory Pressure Is Rising
Financial institutions in Europe face an unprecedented wave of compliance obligations. MiFID II demands transparency in investor protection and transaction reporting. EMIR requires detailed derivatives trade reporting. SFTR extends transparency to securities financing transactions. On top of this, the Digital Operational Resilience Act (DORA) has been applicable since January 2025, tightening oversight of ICT risk and incident reporting.
For banks, asset managers, and service providers, these frameworks create complexity and rising costs. Manual processes and legacy systems are no longer sufficient to keep pace.
From Manual Burden to Automated Workflows
This is where “embedded compliance” enters the picture. The concept refers to integrating compliance controls and reporting capabilities directly into core systems—trading platforms, fund administration software, client portals. Instead of running compliance as a parallel process, rules are built into daily workflows.
RegTech solutions are accelerating this shift. Deloitte’s 2024 Regulatory Compass highlights automation and RegTech as central to addressing rising compliance complexity in Luxembourg and across Europe.
MiFID, EMIR, SFTR: Case Studies in Reporting Automation
- MiFID II: Natural language processing (NLP) tools now extract data from client communications to ensure suitability and best-execution checks.
- EMIR: Automated trade repositories leverage APIs to reconcile transactions in real time, minimizing errors.
- SFTR: Asset servicers deploy automated matching engines for repo and securities lending data, reducing manual workload and error rates.
In Luxembourg, compliance automation is high on the agenda. The CSSF’s guidelines on ICT and cyber risk under DORA highlight automation as a tool to improve resilience and transparency.
Data Act and Future Implications
The EU Data Act, applicable since September 2025, reinforces this trend. By mandating data portability and interoperability, it creates new opportunities for RegTech providers to connect compliance data across systems and jurisdictions. Financial institutions that adapt early can transform compliance from a cost centre into a competitive advantage.
Expertise and Execution
Embedding compliance requires more than software. It demands governance, change management, and deep knowledge of both regulation and technology. This is where external consultants play a crucial role. Platforms such as We Put You in Touch give access to independent experts in compliance, data, and IT architecture. Their diversity of skills allows institutions to integrate compliance seamlessly into operations without losing agility.
Compliance by Design: The New Standard
The future of compliance in financial services will be embedded, automated, and data-driven. Institutions that implement compliance by design will gain resilience, efficiency, and trust. Those that delay risk rising costs, regulatory sanctions, and reputational damage.
References
- Deloitte Luxembourg – 2024 Regulatory Compass (compliance priorities)
- Deloitte Luxembourg – Digital resilience from a banking regulation standpoint
- CSSF – ICT and cyber risk guidelines under DORA
- European Commission – Data Act (entered into force September 2025)
- European Banking Authority – Analysis of RegTech in the EU financial sector