The compliance manual of 2025 ushers in AI-enabled compliance and real-time audits through which financial teams must be ready to demonstrate their regulatory readiness against the increasing pressure levels. Besides, supervisory authorities across the EU, the UK, and the U.S. demand that companies not only understand the rules but also contain verifiable proof of compliance in a digital audit trail. Therefore, for a financial institution, it must not only do annual checks anymore, but also maintain continuous machine-verifiable compliance.
The real challenge as of today is continuous machine-verifiable compliance rather than just annual checks. Financial institutions, fintech, and asset managers will have to drive technology-based controls to keep pace with developing expectations from regulators. Here are nine Regtech checks every finance team must pass in 2025 for operational transparency, resilience, and preparedness for audit.
List of 9 Regtech Checks Finance Teams Must Pass
1. KYC and KYB Orchestratio
Know Your Customer and Know Your Business are still the first parts of essential financial compliance. In 2025, regulators require orchestrations and not static screening. Data from various verification sources must interact with customer profiles that are dynamically updated as the customer’s persona transforms.
A well-orchestrated shell detection system reduces redundancy in work processes and quickens the identification of shell entities. It also affords the compliance function the ability to demonstrate continuous due diligence rather than just a one-time verification process.
Technology has made the exercise easier for those forward-thinking organizations that pair customer data against global watchlists and beneficial ownership registries instantly. Documentation of all regulatory compliance checks would also determine audit readiness. Evidence supports this, for a regulator will no longer ask the compliance officer if these checks were carried out.
2. Model Risk Documentation
Model governance forms a significant compliance rule as the age of AI and algorithmic decision-making deepens. It has opened the doors for such detailed model risk documentation from now on, providing answers to model design, input variables, validation procedures, and model performance.
Finance teams must also document the approval of who approved model deployment and what entails building bias or drift controls. This qualifies every decision-making mechanism in finance that comes from an algorithm for being open.
The documentation should include model cards or technical sheets that set out the assumptions, sources of data, and limitations. Validation cycles, coupled with peer reviews for control and specially developed teams or support services, show that a given institution is committed to responsible AI.
3. Due Diligence for Vendors on AI and Cloud Tools
Now that finance functions are becoming increasingly more dependent on the use of AI-driven Regtech-as-a-service and Cloud Analytics, vendor due diligence has become quite salient in these periods.
Regulators outline expectations that such firms should have considered the documented extent to which third-party technologies process data, manage security, and ensure compliance. For example, certifications such as SOC 2 or ISO 27001 may be obtained along with checks on subprocessor transparency.
A good due diligence process ensures that the possible compliance gaps in third-party tools do not translate into internal liabilities. An example is Abacus, an investment management company that reports transparently and has technology-enabled governance for alternative assets. Their open vendor documentation and audit-ready controls provide an example of how transparent communication can foster trust.
4. Data Lineage Mapping
Data lineage, meaning the ability to trace financial data from origin to report, is one of the most scrutinized audit domains. In 2025, teams are supposed to complete end-to-end traceability, starting with data ingestion through transformation and calculation to final reporting.
Without a clear lineage map, one could only consider this a joke because a regulator wants to confirm each figure published on the balance sheet or risk report with a source. These automated lineage-mapping tools give visual representations of the relationships to editors, keep people from manually filling errors, and accelerate action in data verification.
Bridging compliance extends the confidence in operations. When finance teams can screen the data flow across systems, there are fewer contract audits, disputes over the report, and quicker anomaly detection. Regulators always demand to have a “single source of truth” for financial reporting, and lineage documentation provides auditors with evidence.
5. PII Minimization and Privacy Governance
Most likely, with the tightening enforcement of GDPR and the proliferation of analytics based on artificial intelligence, PII minimization has become one of the main audit concerns. Finance teams need to demonstrate that sensitive personal information is only collected when required, encrypted when at rest and in flight, and retained for justified durations. Automated classification tools will be able to detect PII across databases, enabling teams to redact or tokenize unnecessary data.
The privacy governance framework should have policies for the limitation of data usage, anonymization protocols, and training workers to handle client data appropriately. These controls, for example, data deletion logs, consent documents, and policy violations automated alerts, are expected now from regulators.
6. NIST and DORA Alignment for Cyber Controls
Regulators expect that finance will align internal controls along frameworks like those recognized in the NIST Cybersecurity Framework and the EU’s Digital Operational Resilience Act. It shows how incident response, patch management, and network monitoring processes meet or exceed framework standards. Failing to demonstrate this means a penalty risk and loss of trust from regulators.
Audit evidence should include security logs, vulnerability scans, and reports showing incident resolution timelines. The finance team must also demonstrate that business continuity and disaster recovery plans are regularly tested and updated to reflect digital dependencies.
7. Immutable Audit Trails
Regulators now expect unalterable audit trails in the operations of finance and compliance. Undoubtedly, a timestamped and tamper-proof record should exist for every transaction, approval, and modification. Such immutable trails encourage verification of actions by auditors without depending on modifiable spreadsheets or handwritten records. Furthermore, it will give an edge over internal manipulation or tampering with records.
Adoption of either distributed ledger or cryptographic logging solutions would enhance data integrity in financial workflows. Regulators increasingly solicit hash-verification methods so that logs are ensured not to have been altered post-event. By maintaining immutable audit trails, finance can quickly provide verifiable evidence of compliance activities, thus saving a lot of time during unexpected regulatory inspections.
8. Real-Time Regulatory Reporting Readiness
Firms move away from quarterly reconciliations as real-time regulatory reporting requires them to be near-immediate in capital adequacy, liquidity, and transaction submissions. This is because supervisory bodies want these reports as close to real-time submission as possible. There should be integrated data pipelines to validate, format, and transmit data along a schema approved by the regulators.
Automating these reporting processes will ensure accuracy while freeing compliance teams to deal mainly with exception-handling tasks. Audit checks are increasingly probing into how pipelines are maintained for reporting purposes.
Regulators expect teams to provide testing logs, API documentation, and failover mechanisms that ensure uninterrupted submissions. Close collaboration between finance, IT, and compliance, the triad that ensures both operational efficiency and regulatory confidence, is a prerequisite for real-time readiness.
9. Timelines, Templates, and Continuous Audit Preparation
Even the most sophisticated Regtech tools are worth nothing if they aren’t audit-ready. These days, regulators expect timelines, which document when every compliance control is reviewed, tested, and validated. Evidence templates also need to be standardized across audits to demonstrate maturity in compliance operations and boost confidence in responding to regulatory requests.
Being audit-ready continuously is in itself also creating resilience. Keeping evergreen documents updated, dashboards, automated risk logs, and recurring control attestations helps finance teams turn audits into routine exercises rather than causing stressful fire drills. Passing Regtech checks in 2025 is no longer a scramble ahead of the inspection but rather a demonstration of everyday, continuous data-backed compliance.
Endnote
Compliance excellence is becoming a strategic advantage and regulatory necessity as finance and technology converge. The backbone of modern compliance architecture comprises the top Regtech checks around orchestration, data integrity, AI oversight, and cyber resilience. Passing these checks means not only assuring regulators of compliance but also building the backbone of client, investor, and partner trust. Companies that incorporate these even in their daily workflows keep far ahead of the regulatory curve.
