Compliance under pressure: one in three flags regulation
Compliance functions are turning to data and technology to anticipate risks, but still need to strengthen the skills required to manage them. This is the picture emerging from the 2026 KPMG Global Chief Ethics and Compliance Officer Survey, which surveyed 725 ethics and compliance leaders at large companies across six sectors and eight countries. While respondents’ assessments of artificial intelligence are predominantly favourable, evolving regulatory requirements remain the leading challenge ahead.
Regulation and security shape priorities
New regulatory requirements feature among the main challenges their organisations will face over the next two years for 33% of respondents. That figure rises to 41% in the United States, compared with 30% in other markets. The next most frequently cited challenge, identified by 31% overall, is using data analytics and predictive modelling for compliance monitoring and risk management.
Investment priorities reflect these needs. Asked which areas would drive additional investment in the event of a budget increase, 77% point to data analytics and 75% to cybersecurity and data privacy. Process automation follows at 50%, alongside upskilling at 49%. AI and large language models rank lower, at 34%, suggesting that technology investment also encompasses the tools and capabilities needed to support their adoption.
A cautious endorsement of AI
Respondents’ experience of artificial intelligence is broadly favourable, although the strength of that assessment varies. Some 68% describe their experience as mixed but leaning positive, having seen more benefits than challenges. A further 24% report significant improvements in compliance efficiency and effectiveness.
Adoption varies considerably by activity, however. Across automation, AI and machine learning, 50% of respondents use these technologies for compliance risk assessment and management. Data visualisation and predictive analytics account for 44%, as do employee training and awareness. Regulatory change management follows at 43%.
The figures fall to 17% for drafting and reviewing legal documents and contracts, 12% each for anti-money laundering and contract compliance, and just 4% for reporting hotlines and investigations. KPMG interprets this pattern as reflecting caution towards more sensitive applications requiring human analysis and oversight.
The skills gap
People and skills remain a vulnerability. Only 21% of respondents consider themselves very well prepared to upskill compliance professionals, while 20% report the same level of readiness to strengthen their organisation’s compliance culture.
The report also highlights a potential consequence of automation: as machines take on more entry-level tasks, junior professionals may have fewer opportunities to develop the experience needed to critically assess AI outputs.
Transformation also depends on collaboration across the business. Some 67% are confident in their organisation’s ability to identify synergies and duplication across compliance, legal, human resources, investigations, internal audit and operations. Meanwhile, 81% express confidence in working with cybersecurity teams.
These findings point to a function seeking a more strategic role. The challenge identified by the research is to turn that ambition into practical capabilities: integrating information and controls, developing people’s skills and ensuring that technology-supported decisions can be scrutinised.
