Breaking Down the Walls: Tackling Compliance Silos in Financial Services

As financial institutions across the globe deepen their commitment to compliance, many still find themselves grappling with a persistent internal challenge: siloed departments. These silos, whether cultural, technological, or structural, not only slow down the compliance process but can also introduce costly inefficiencies and increase risk exposure. At the recent

Global RegTech Summit in London, experts from around the world gathered to explore this very issue, offering valuable insights for banks, fintechs, and regulators—particularly in rapidly evolving regions like Asia-Pacific.

A Shift in Mindset: Compliance as Culture, Not a Checkbox

In recent years, compliance has evolved from a tick-box obligation to a central, strategic pillar within financial institutions. This cultural shift is driven by increasing regulatory complexity, public scrutiny, and the growing importance of customer trust. Today, forward-thinking organizations are embedding compliance into their corporate DNA. No longer relegated to back-office functions, compliance now commands board-level attention.

Panelists at the Summit, including leaders from Rabobank, Hivemind Capital, and Tide, emphasized that successful compliance isn't just about regulatory adherence—it’s about instilling a culture where every employee understands their role in safeguarding the institution. For instance, in emerging markets like Indonesia and the Philippines, digital banking adoption is surging, and regulators are demanding stronger controls. Here, fostering a compliance-first mindset from top to bottom is vital to sustaining trust and avoiding punitive measures.

The Mystery House Analogy: Compliance Without Architecture

To describe the chaos of unstructured compliance programs, one panelist used a striking metaphor: the Winchester Mystery House. This historic mansion, constructed over decades without a master blueprint, is filled with nonsensical architecture—staircases to nowhere, doors that open into walls, and disconnected rooms. Similarly, many financial institutions operate with fragmented compliance systems, built reactively rather than strategically.

One global insurance firm revealed it discovered 28 separate policy portals during an internal audit—many outdated, misaligned, or duplicative. This scenario is not uncommon in Asia-Pacific, where banks often face country-specific regulatory requirements across multiple jurisdictions. Without a unified framework, these organizations struggle to maintain version control, consistency, or real-time oversight across compliance operations. The result: duplication of effort, conflicting policies, and blind spots that fraudsters and auditors can exploit.

Leadership Sets the Tone: The Crucial Role of the C-Suite

True compliance unification begins at the top. Senior executives must clearly define expectations, support structured processes, and demonstrate personal accountability. “Tone at the top” isn't just a governance catchphrase—it's a functional prerequisite.

When C-suite leaders fail to prioritize compliance, the ripple effect can lead to apathy, misalignment, and even reputational damage. Conversely, when executives champion a proactive compliance agenda, it fosters a culture of integrity. Firms that invest in training, set up internal escalation paths, and actively engage in transparent reporting typically experience fewer incidents and smoother regulator relationships.

This is especially relevant in APAC, where regulatory scrutiny is rising fast. In Hong Kong, for example, the new stablecoin licensing regime coming into effect in August 2025 will require institutions to show documented risk frameworks and robust compliance ownership at the executive level. Without clear leadership, navigating such regulatory shifts becomes a minefield.

Communication and Connection: Dismantling Silos One Process at a Time

One of the root causes of siloed compliance is lack of cross-departmental communication. HR compliance, IT compliance, financial reporting, and ethics oversight often operate independently, each using its own systems, templates, and terminology. Without centralized oversight or coordination, the result is regulatory fragmentation.

To break down these walls, firms need both organizational redesign and improved communication infrastructure. This includes implementing centralized policy repositories, conducting cross-functional training, and forming compliance steering committees that include representatives from all relevant departments. Shared language, regular updates, and consistent reporting formats also help ensure alignment.

In regional contexts like Singapore and Australia, where financial institutions must manage both domestic and cross-border compliance regimes, this connectedness is even more critical. For example, APRA (Australia's banking regulator) and MAS (Monetary Authority of Singapore) have both issued guidelines on operational resilience that require clear internal coordination across cybersecurity, third-party risk, and business continuity planning—areas that often sit in separate silos.

Integrity Audits: Aligning Values With Conduct

A unified compliance function should not just be operational—it must reflect a firm’s core values. This is why many experts now recommend “integrity audits” as part of regular compliance reviews. These audits go beyond checking boxes; they compare stated policies with real-world behavior. Do employees follow procedures in high-pressure situations? Are whistleblower hotlines functional and trusted? Are disciplinary actions fair and consistently applied?

Such integrity-driven audits are especially important in emerging fintech hubs like Vietnam, Thailand, and Malaysia, where regulatory frameworks are evolving rapidly, and consumer protections are still maturing. Financial institutions in these markets must ensure that their internal culture matches their public commitments, or risk losing both consumer confidence and regulatory goodwill.

Technology as a Catalyst: Breaking Barriers with RegTech

As compliance landscapes become more complex, technology is emerging as the great unifier. RegTech platforms that offer centralized dashboards, automated policy tracking, real-time transaction monitoring, and AI-powered alerting systems are helping institutions overcome internal fragmentation.

By aggregating data from across departments and jurisdictions, modern RegTech tools can provide a single source of truth. They also allow compliance teams to shift from reactive firefighting to proactive risk management. Tools like natural language processing (NLP) and machine learning (ML) are increasingly being used to scan employee communications, identify policy violations, and flag emerging risks—functions that previously required weeks of manual review.

In APAC, where the digital transformation of banks and insurers is accelerating, RegTech adoption is on the rise. Regulators in Hong Kong, Singapore, and Japan are even encouraging financial institutions to explore supervisory technology (SupTech) partnerships, and some central banks now offer sandboxes for testing RegTech solutions in live environments.

Toward a Unified Future: Building Compliance by Design

In conclusion, tackling compliance silos is not merely a process improvement initiative—it’s a strategic imperative. As financial crime becomes more complex and regulatory expectations intensify, institutions must move beyond fragmented, legacy systems and build compliance “by design.” This means embedding compliance into every layer of the organization—from employee onboarding and product design to data governance and executive decision-making.

For firms in Asia-Pacific and beyond, the road ahead includes investment in integrated systems, cross-functional training, clear communication protocols, and a leadership team that champions integrity. As the financial industry continues to evolve, those who embrace a unified, tech-enabled compliance culture will be best positioned to grow confidently—and compliantly—into the future.