Q&A With Ed Probst: Turning Regulatory Compliance into a Strategic Enabler

Today's financial institutions are at a pivotal crossroads. As regulatory frameworks grow increasingly intricate and technological advancements accelerate, organizations must harmonize compliance requirements, business strategies and operational efficiencies to generate value rather than friction.

Modernization is no longer a mere competitive edge—it's a necessity for survival in an environment where regulatory technology is integral to business operations.
 

Compliance is shifting from a regulatory obligation to a driver of business value, with emerging technologies like AI, cloud computing, and advanced analytics revolutionizing how firms approach surveillance.
 

To delve deeper into this transformative journey, we spoke with Ed Probst, Senior Vice President of Regulatory Technology at Nasdaq. He shares how visionary financial institutions are adeptly managing these converging priorities and transforming compliance challenges into strategic opportunities.

One theme unites both the challenges and opportunities facing banks today: technology. What we're seeing across the industry is a perfect storm of fragmented control structures, insufficient automation and underutilized data assets. These gaps, however, present heightened opportunity for optimization and innovation amid a pro-growth undercurrent driving the current climate.

Financial institutions are operating in an incredibly complex and dynamic environment. During such periods, when banks are growing, resources and time can be spread thin. The crunch makes it all the easier for the full needs of regulatory compliance and risk management to go underserviced. But this makes it all the more important to take a proactive, strategic stance in assessing controls, obligations and infrastructure, and determining where improvements can be made to reduce technical debt or help the organization better manage the rapid pace of change.

Many organizations still maintain siloed approaches to compliance, with different teams managing different regulatory regimes using disconnected systems. This creates redundancies, increases error risk and makes it nearly impossible to gain a holistic view of compliance status and risk exposure.
 

What's particularly concerning is that many firms continue to allocate substantial resources to compliance activities that deliver little strategic value beyond meeting minimum requirements.

The opportunity cost is significant; resources that could drive innovation are instead consumed by inefficient compliance processes. The path forward requires organizations to reimagine their infrastructure and process cohesion.

This isn't just about technology implementation—it's about rethinking how compliance functions as a strategic enabler rather than a cost center.
 

Centralized control is the foundation of modern regulatory compliance. When properly implemented, it becomes a catalyst for broader organizational transformation.

The growing intensity of regulatory scrutiny across regions is prompting a profound rethink in the way regulated institutions approach regulatory compliance. Countries across the globe are embarking on a fundamental shift in the way they view financial services regulation, from both a legislative and day-to-day compliance perspective.

A centralized approach allows organizations to establish consistent data governance frameworks that ensure information is accurate, complete and properly controlled throughout its lifecycle. This reduces compliance risk while also creating a single source of truth that can be leveraged across multiple regulatory requirements.
 

We're seeing regulators increasingly dictate detailed, extensive and precise data requirements, signaling a gradual move from a “push” to a “pull” collection model based on consistent industry-wide APIs. Such models enable regulators to download, interrogate and interpret data in real-time. 

When compliance processes are centralized, organizations can align regulatory reporting across teams, reduce redundancies and enable faster, smarter decisions. The key is implementing a platform that can integrate disparate data sources without requiring massive infrastructure changes—this allows firms to preserve their existing investments while creating a more cohesive compliance ecosystem.
 

Automation is transforming compliance from a reactive, manual process to a proactive, strategic function. The shift is dramatic and necessary.

Many institutions still rely heavily on manual processes and spreadsheets for regulatory calculations and reporting. This approach is not only inefficient but also introduces significant risk of errors and inconsistencies. As regulatory requirements become more complex, manual approaches become increasingly untenable.
 

Technologies like AI and cloud have the power to enhance strategic insights and dramatically improve efficiency, but require a workforce able to understand, develop and deploy the capability. We're seeing firms increasingly turn to regulatory technology platforms and supplement their workforce with data scientists and other specialists to handle the changes and challenges of regulatory compliance.

Our recent Global Compliance Survey revealed that 35% of respondents expect technologies like AI to be the biggest driver of compliance process change over the next year, compared to just 9% last year and 0% the year prior. This shift marks a move away from simple workflow tools towards more data-driven investigative approaches.
 

Automation not only reduces manual dependencies but also improves audit readiness and supports next-generation compliance needs. The right automation strategy creates a virtuous cycle where compliance becomes more efficient, more accurate and more valuable to the broader organization.
 

This is where the real transformation happens. Compliance data contains invaluable insights that can drive strategic decision-making across the organization.

Modern platforms allow institutions to analyze data beyond compliance, turning regulatory requirements into business intelligence opportunities. When properly structured, the same data that satisfies regulators can provide insights into customer behavior, risk exposure and market opportunities.

The combined impact of new regulatory requirements is giving rise to a balanced, partnership approach where institutions are increasingly looking to outsource their technology and systems to service providers. This allows for leaner teams, while also maintaining sufficient in-house skill and capacity, to oversee implementation programs and provide day-to-day support.

Organizations that successfully leverage their compliance data gain a significant competitive advantage—they're able to identify risks earlier, respond to market changes faster and make more informed strategic decisions.
 

Scalability isn't just a technical consideration—it's a leadership imperative. The regulatory landscape will continue to evolve, and organizations need flexible platforms that can adapt without requiring complete overhauls.

Basel III reforms are having a significant impact on credit, market, operational and liquidity risk requirements. Regimes such as BCBS 239, Basel III and IV, FRTB, MiFID II and others exemplify the explosion of intricacy, change and scope in regulatory requirements.
 

Flexible, scalable platforms allow firms to adapt to new regulations while optimizing resource use. They provide the foundation for continuous improvement rather than point-in-time compliance. This approach is particularly important as we see regulators around the world adopting more advanced regulatory reporting regimes with improved supervisory oversight.

To turn regulatory drivers into key business drivers, financial institutions should implement a data and process-driven platform that delivers scalability to operate on larger data sets, improves data management, provides flexible infrastructure to adapt quickly to new mandates, reuses and leverages data and processes, and provides comprehensive data lineage.
 

The shift from viewing regulatory compliance as a cost center to recognizing it as a strategic enabler is no longer theoretical—it's a business imperative. Organizations that adeptly balance business, regulatory and technological priorities gain significant advantages in efficiency, insight and adaptability.

Success in this evolving regulatory landscape requires seamless collaboration between business, compliance and technology teams. It demands modernization efforts that empower rather than constrain, and a proactive mindset that sees regulatory change as an opportunity for broader organizational improvement.

As we navigate this transformative era, the organizations that will thrive are those that embrace these challenges as catalysts for positive change—turning compliance requirements into strategic advantages that drive sustainable growth and resilience.
 

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