RESILIENCE UNDER REGULATION: Regulatory Pressure and Compliance Fatigue in Financial Services
For U.S. financial institutions, the compliance burden has become inseparable from cybersecurity.
From the SEC’s new disclosure rule to NYDFS Part 500 and FINRA’s expanding oversight, regulators have turned resilience into a baseline requirement – not a best practice.
Omega Systems’ 2025 Financial Services IT and Cybersecurity Survey of more than 300 executives reveals the growing strain:
- 42% cite staying current with evolving requirements as their biggest compliance roadblock.
- 36% lack sufficient internal compliance expertise.
- 29% say budgets are stretched too thin.
- 54% still rely on spreadsheets or in-house tools to benchmark security controls.
The result is compliance fatigue – where the pressure to keep pace with regulation outstrips the resources to execute. When confidence is the currency of finance, compliance is what keeps it in circulation.
About This Study
August 2025 online survey of 300+ U.S. financial services leaders — including CEOs, CIOs, CISOs, CFOs, COOs, and other senior executives at family offices, RIAs, wealth management firms, hedge funds, private equity firms, and investment advisory organizations managing less than $1 billion to more than $10 billion in assets under management (AUM).
Concerning Stat:
Keeping up with changing regulations has become the industry's biggest compliance challenge. In fact, 42% of financial services leaders say staying current with evolving requirements is their top compliance roadblock.
Regulatory Pressure Is Mounting
Over the past 18 months, the U.S. has seen an unprecedented tightening of cybersecurity oversight.
- The SEC’s Cybersecurity Disclosure Rule now requires public companies to report material incidents within four business days.
- NYDFS Part 500 mandates annual certification, executive accountability, and continuous monitoring for New York-registered entities.
- FINRA has expanded its business continuity guidance to include documented cybersecurity testing.
- The FTC Safeguards Rule and FFIEC Cybersecurity Assessment Tool continue to widen expectations for financial institutions that manage consumer data.
Together, these frameworks are redefining compliance as proof – not policy.
In fact, many firms acknowledge they’re struggling to meet these accelerated expectations. More than one-third (35%) of our survey respondents say it would take a week or longer to detect and contain a security breach – a timeline that would put firms out of step with new disclosure requirements. Detection delay has become not just a security weakness, but a compliance liability.
Compliance Fatigue Across Financial Services
Financial leaders are caught between rising regulatory pressure and operational limits. Nearly half (42%) identify evolving requirements as their top challenge, followed by limited internal expertise (36%), budget constraints (29%), difficulty translating rules into technical controls (26%), and inefficient tools or manual processes (25%).
To complicate matters further, CFOs and CIOs often see the problem differently. 53% of CFOs cite staying current with regulations as a top concern, compared to 38% of CIOs – a gap that highlights how financial and technical priorities are misaligned. CFOs view compliance as a cost; CIOs view it as a process. Neither perspective, on its own, creates resilience.
When it comes to regulatory compliance readiness, financial services firms understand the mandate – they just don’t have the bandwidth to meet it.
Top 5 Compliance Roadblocks:
Regulatory Change
Staying up to date on evolving requirements
Compliance Expertise
Limited internal compliance expertise or staff
Budget Constraints
Limited budget for compliance initiatives
Control Mapping
Translating rules into technical controls
Manual Processes
Inefficient tools or manual processes
Manual Processes: Compliance at a Standstill
Despite years of digital transformation, compliance itself remains remarkably manual across the financial industry.
54% of firms still rely on spreadsheets or internally built systems to manage security control benchmarking and reporting. Smaller firms are particularly strained – 46% of those with fewer than 500 employees depend on manual methods, compared to just 21% of larger firms.
Manual oversight limits visibility and creates risk. Without automated logging, audit trails, and version control, firms struggle to produce the documentation regulators demand.
Many discover too late that their compliance systems can’t prove readiness when it matters most.
More than half of firms surveyed (54%) rely on manual spreadsheets or processes to benchmark their security controls.
Uncertain Signals from Regulators
The SEC’s withdrawal of proposed cybersecurity rules in June 2025 added a layer of ambiguity just as expectations were tightening. Omega’s data shows a split reaction: 37% of firms believe the withdrawal weakened their posture, while 32% say it strengthened it by providing more flexibility.
Split Reaction to SEC’s Cybersecurity Rules
Withdrawal:
of firms believe the withdrawal strengthened their posture
of firms believe the withdrawal weakened their posture
In practice, this divide has created inconsistent maturity across the industry. Some firms are doubling down on documentation and governance, while others have paused investments until new clarity emerges. The risk, as regulators continue to enforce under existing laws, is that firms mistake uncertainty for relief.
Compliance in Practice
Recent enforcement trends underscore how regulators are interpreting these rules. In 2024 and 2025, the SEC levied multiple fines exceeding $1 million for delayed incident disclosure, weak vendor oversight, and insufficient documentation. The message is clear: process failures are now governance failures.
Omega’s survey mirrors those vulnerabilities – 20% of firms lack a defined incident response plan, and 18% say legacy systems hinder their ability to meet modern compliance standards. Documentation and testing are no longer optional; they’re the proof points regulators expect when resilience is questioned.
From Manual to Managed: The MSSP Advantage
More than half of financial firms (52%) still manage cybersecurity internally, but those working with managed security service providers (MSSPs) or co-managed models (17%) demonstrate stronger audit readiness and faster response times.
MSSP-supported firms test more frequently (56% conduct continuous or monthly testing vs. 38% of internally managed firms), detect and contain breaches faster (16% vs. 25% requiring two to four weeks), and maintain stronger documentation through continuous monitoring and audit logs. These capabilities give firms the verifiable evidence regulators now expect – turning compliance from a reactive obligation into a measurable operational discipline.
🔧 Internal IT (Shared Resources)
☁️ MSSP-Supported Firms
Partnering with a managed provider doesn’t just fill resource gaps – it operationalizes compliance, translating regulatory expectations into daily, measurable practice.
The glaring need for professional support (MSSPs) in the financial services industry
MSSPs deliver the skilled resources and advanced security infrastructure needed to reduce the operational, financial, regulatory, and reputational risks associated with cyberattacks through proactive threat detection, rapid incident response, and strategic cybersecurity planning. By strengthening cyber resilience, MSSPs help financial services firms protect investor trust and respond more effectively to evolving threats.
Furthermore, MSSPs can help alleviate the compliance burden by automating core security functions and standardizing security monitoring and reporting, enabling firms to more effectively address SEC, FINRA, and other regulatory requirements while adapting more quickly to change.
Modernization as the Compliance Multiplier
Compliance readiness depends on modernization. But half (50%) of firms admit they rely on outdated or on-premise systems today. Legacy systems can’t sustain the control visibility regulators now require. Modern platforms streamline compliance by centralizing logs, automating backups, and producing verifiable audit data on demand. But with such a heavy reliance on legacy IT within the industry, it’s become clear that technology debt is now a compliance risk in itself.
50% of firms admit they rely on outdated or on-premise systems today.
Call to Action: Modernize security to protect investor trust, assets, and compliance.
Omega Systems’ 2025 Financial Services Compliance Report highlights key priorities for financial services leaders seeking to improve cyber resilience, strengthen compliance, and reduce operational risk.
Investor trust increasingly depends on the resilience of digital systems. As financial firms become more reliant on cloud platforms, client-facing applications, and interconnected technologies, a cyberattack can quickly disrupt operations, impact client confidence, and attract regulatory scrutiny. Financial services leaders should view cybersecurity as a business imperative, ensuring critical systems remain secure, accessible, and resilient at all times.
In a heavy regulated industry like healthcare, compliance never gets easier. Regulatory standards will continue to evolve, and organizations must be prepared to implement IT security controls that prioritize data privacy and operational resilience. Healthcare leaders should look to modernize technology stacks, allowing them to stay agile in the face of changing requirements.
Investor trust increasingly depends on the resilience of digital systems. As financial firms become more reliant on cloud platforms, client-facing applications, and interconnected technologies, a cyberattack can quickly disrupt operations, impact client confidence, and attract regulatory scrutiny. Financial services leaders should view cybersecurity as a business imperative, ensuring critical systems remain secure, accessible, and resilient at all times.
What Firms Want from Compliance Technology
Financial firms are signaling that technology – not headcount – will close the compliance gap. The most valued features in a managed compliance platform include:
- Data discovery & classification (51%) – Helps firms locate sensitive information across cloud and on-prem environments to ensure nothing escapes regulatory scope.
- Automated evidence collection (45%) – Gathers audit logs, test results, and policy documentation continuously, eliminating manual proof-gathering at exam time.
- Organized document management (45%) – Centralizes controls, policies, and reports for easy retrieval during audits or investor due diligence.
- Control benchmarking & progress tracking (41%) – Enables firms to measure improvement, identify compliance drift, and demonstrate governance maturity.
These capabilities transform compliance from an administrative burden into a measurable operational discipline. Automation turns effort into evidence – and evidence into trust.
Top-Rated Compliance Platform Features
Data discovery & classification
Automatically identify and classify sensitive data across your environment.
Automated evidence collection
Continuously collect audit-ready evidence without manual effort.
Organized document management
Keep policies, controls, and reports organized in one place.
Control benchmarking & progress tracking
Track compliance progress and measure control maturity over time.
Conclusion: Proof Over Promises
In 2025, compliance has become the true measure of cyber resilience – and resilience has become the foundation of trust. Regulators, investors, and clients are aligned: show the evidence.
Firms that modernize systems, automate documentation, and partner strategically won’t just meet obligations – they’ll lead with confidence. The next wave of compliance will reward those who can prove readiness, not just claim it.
As we move into 2026, documentation will carry the same weight as defense. The firms that build transparency into their technology and partnerships will be the ones investors trust most.
Evidence, not promises, defines resilience.
Survey Methodology
Findings are based on an Omega Systems survey conducted in August 2025 of more than 300 U.S. financial services executives, including CEOs, CIOs, CISOs, CFOs, COOs, and other senior leaders. Respondents represented firms operating in the financial services sector including family offices, RIAs, wealth management firms, hedge funds, private equity, and investment advisory firms, with assets under management (AUM) ranging from less than $1 billion to more than $10 billion. Percentages are rounded to the nearest tenth.
About Omega Systems
As a multi-award-winning MSP and MSSP, Omega Systems is passionate about delivering the security and compliance expertise today’s businesses need alongside the responsive and reliable managed IT support they deserve. Omega’s service-driven IT solutions portfolio includes 24×7 managed IT support, cybersecurity risk management, managed detection & response (MDR), backup and disaster recovery, multi-cloud connectivity, and much more. Omega Systems supports customers across the U.S. in key regulated industries such as financial services, healthcare, and professional services.
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