FinregE executive says compliance is becoming a competitive asset

FinregE’s Paul Lyon said financial firms are reframing compliance as a source of customer trust and operating speed, rather than only a defence against fines. In a Finextra expert opinion post, Lyon argued that regulatory technology can reduce friction in onboarding and retention by embedding controls into digital systems.

Lyon, chief marketing and communications officer at FinregE, wrote that compliance teams have often been treated inside financial institutions as a brake on product development and brand work. He said that approach can delay launches, weaken collaboration between brand and risk functions, and leave technology firms treating regulatory obligations as secondary to growth.

The post was published by Finextra as external contributor content and was not edited by the platform, according to Finextra’s disclosure. Lyon described the piece as based partly on his experience across listed banking, professional services technology firms and financial journalism.

Trust as a commercial factor

Lyon said the industry is shifting away from checklist-style compliance toward what he called a “Trust Economy”, in which stronger regulatory capability becomes a market differentiator. He linked that shift to weakening public confidence in financial institutions and cited the 2026 Edelman Trust Barometer as suggesting that trust remains volatile, with consumers sceptical about data handling and governance.

According to Lyon, younger consumers, including Gen Z and millennials, increasingly treat institutional integrity as part of the product itself. He argued that a firm able to show stable, technology-enabled regulatory processes can lower the perceived risk of becoming its customer, which he described as a “trust dividend”.

Onboarding and monitoring

Lyon identified customer onboarding as a central pressure point. He said manual know-your-customer checks and fragmented documentation can lead to customers abandoning applications, while older systems can make compliance more costly and harder to manage.

Know-your-customer processes require financial firms to verify a client’s identity and assess risks such as fraud, sanctions exposure or money laundering. Lyon said RegTech changes the operating model when firms move from manual, retrospective reporting to real-time monitoring supported by artificial intelligence. In that structure, regulatory checks sit inside the technology stack rather than being added after a product or customer process is designed.

Lyon cited McKinsey research as indicating that smooth digital onboarding is an important driver of acquisition, while many firms still face drop-offs during compliance checks. He did not provide a quantified estimate for the cost of those drop-offs.

He also said industry trends show AI-integrated compliance frameworks can reduce false positives in anti-money laundering screening. False positives occur when legitimate customers or transactions are flagged for review, adding delay and manual work. Lyon argued that fewer unnecessary reviews can improve the customer experience as well as internal efficiency.

Marketing a function built to prevent crises

Lyon said communications and brand teams face a challenge in presenting compliance because its best outcomes often involve events that do not happen, such as avoided penalties, clean audits or a lack of public failures. He argued that firms should present modern compliance as a source of speed and reliability, rather than only as risk control.

His central contention is that regulation can support sustainable innovation when it is built into operating systems early. Lyon said firms that align brand, technology and compliance are better placed to scale products without treating regulatory review as a last-stage obstacle.

This story draws on original reporting from Finextra Research.