What is Compliance?

The very landscape of crime has constantly evolved, from traditional threats to cyber-related frauds.  As a result, states witnessed complete paradigm shifts in their compliance priorities post both the World wars and the Cold War, that divided the world into two questionable parts with the iconic Iron Curtain as well as the catastrophic events of 9/11 that resulted in a dramatic change in the global world order and modern warfare tactics.

There currently exists a web of international regulations that govern the interconnectedness of the globe. As nations, organizations and businesses navigate their way through this mesh, compliance emerged as an anchor in the rise of global competitiveness, it became a key to unlocking opportunities in an increasingly regulated world.

Post 9/11 more compliance related laws were passed like that of the USA Patriot Act. At its core the act aims to strengthen American measures to halt and identify international money laundering.

Similarly, the Second EU AMLD of 2001 was an extension of the original 1991 directive, thus expanding its scope by moving beyond banks and including designated non-financial business and professions (DNFBPs).

What is Compliance and what it Means for Businesses?

Compliance in its literal dictionary definition means to follow the rules, laws and standards set by authorities, organizations or industry benchmarks in order to demonstrate adherence to applicable laws/regulations and rules.

In practice, compliance includes documented policies, customer and third-party checks, staff training, monitoring, reporting, and evidence that controls are working during audits and regulatory reviews.

Main Compliance Categories

While the administration levels of compliance may vary and differentiate from industry to industry and other specific businesses. Following are the different types of compliance:

Regulatory Compliance

It essentially indicates the duties, rules and laws that have been imposed by the governments and regulatory bodies like SEC, FinCEN etc. The EU AMLD  and the Sarbanes Oxley Act of 2002 are all examples of regulatory compliance that financial institutions and other relevant organizations must adhere to.

Corporate Compliance

Refers to the inner policies of a workplace this includes but is not limited to employee conduct, administrative ethics and adherence to HR policies. It also includes “whistleblowing”  especially with reference to compliance programs where whistleblowing typically would cover fraud, breaches of law, policy or regulations.

Environmental Compliance

With the adverse effects of global warming on climate change, it is now mandatory on companies to ensure that their working or functioning does not harm the ecosystem in any way.

This can include but again is not limited to emissions control, waste release control and smart, environment-friendly, lasting and sustainable sourcing.

Industry-Specific Compliance

As self-explanatory as its name, industry -specific compliance is basically company-specific compliance that covers the relevant and exact standards that are designed for those specific sectors like insurance, healthcare etc.

Which Industries Face the Most Regulations and Why?

The regulation requirements between industries can differ from one another meaning that some are more heavily regulated than most.

Banking Sector

The banking sector, fintechs and other financial institutions top the list for most heavily-regulated sectors this is because they are the most susceptible to inhibiting money-laundering and fraud despite transparency. It is necessary for  these industries to comply with AML regulations.

Healthcare Sector

It is a responsibility upon the shoulders of the healthcare sector to ensure the confidentiality of the patients’ sensitive information and maintenance of moral practices while complying with laws like HIPAA (Health Insurance Portability and Accountability Act)  a US federal law that protects  patients’ sensitive health information.

Insurance Sector

The insurance sector maintains market trust and credibility, ensures financial stability of the insurers; this results in the insurance sector becoming one of the most highly-regulated industries.

They have to safeguard personal information confidentiality and maintain cordial terms with the law.

Capital Markets

Capital markets must comply with a range of regulations that are built to make sure that investor protection, market integrity, transparency and financial stability are all maintained.  They are the largest source of financing for non-financial companies that typically include bonds, stocks, shares of investment.

They are required to license and register brokers, dealers, workers of securities exchange etc with appropriate authorities to operate. Further, they are expected to demonstrate maintenance of a minimum amount of capital  and have enough financial resources to ensure stability.

The Ultimate Consequences of Non-Compliance

Laws, rules and regulations are all meant to be followed, however, in cases where following them is not prioritized the businesses/organizations have paid the ultimate price for their negligence. Regulatory fines have in many occurrences financially immobilized businesses/organizations.

Some relatively smaller violations can lead to suspension, revocation of licenses halting operations inevitably. The current status quo of the world is that of latest reviews and trends, therefore, opinions once lost can be lost for a long time and regaining trust can take up a lifetime of hard work and time.

Therefore, for any serious business or operations hoping to thrive and prevail for long times must be compliant to all relevant rules and regulations.

The Financial Conduct Authority fined Nationwide Building Society for 44 million pounds in 2025. The Nationwide Building Society between the period of 2016 to 2021 had ineffective systems for keeping up-to-date due diligence and risk assessments for its personal current account customers and for monitoring their transactions.

How AML Watcher Helps Financial Institutions Cut Compliance Costs

Financial institutions continue to absorb rising AML compliance costs driven by high alert volumes, manual screening reviews, and slow onboarding decisions.

AML Watcher’s TruRisk prioritises alerts that are based on risk and separate any possible false matches in screening results. Moreover, it supports structured reasoning that explains why an alert is considered a false positive. This particular feature, reduces unnecessary manual reviews, assists compliance teams to focus on genuine risk exposure, and shortens alert review and onboarding timelines through faster, well-documented decisions.

Request a demo to understand how AML Watcher helps financial institutions lower AML operational costs while maintaining defensible, regulator-ready compliance outcomes.