In financial services, compliance has always been a moving target. But in 2026, it’s no longer just moving – it’s accelerating. Between the SEC’s tight disclosure timelines, NYDFS Part 500’s operational mandates, and FINRA’s expanding oversight, regulators have transformed compliance from an annual exercise into a continuous expectation.
The challenge for many firms isn’t understanding the rules. It’s proving they’re actually following them. And the root of that problem isn’t culture or intention. It’s infrastructure.
More than half of financial firms still rely on spreadsheets, internally built trackers, and aging systems to manage some of the most scrutiny-sensitive parts of their operation. Compliance has evolved. Their tools haven’t.
The result is a widening gap between what regulators expect and what firms can deliver – a gap that’s now becoming one of the biggest risks to financial organizations in 2026.
For years, spreadsheets were the backbone of compliance operations. They were familiar, flexible, and “good enough” for documenting controls, mapping frameworks, and prepping for audits. But the landscape has changed, and spreadsheets didn’t evolve with it.
According to Omega Systems’ 2025 Financial Services IT and Cybersecurity Survey, 54% of firms still rely on spreadsheets or homemade tools to benchmark controls or track evidence. In isolation, that statistic may sound benign. In context, it’s anything but.
Manual systems create blind spots. They fracture governance. They introduce delay. They force compliance teams into a cycle of perpetual catch-up. And critically, they cannot meet the evidentiary standard regulators now expect.
In a world where the SEC wants material incident disclosure within four days, where NYDFS requires provable continuous monitoring, and where FINRA is emphasizing cybersecurity testing, a spreadsheet simply cannot produce the audit trail regulators assume you have.
The danger isn’t that firms are ignoring compliance. It’s that they’re trying to meet modern expectations with pre-cloud tooling.
If spreadsheets slow documentation, legacy systems slow everything else.
Eighteen percent of financial firms – nearly one in five – say that outdated or on-premises systems directly hinder their compliance posture. That impact shows up in three critical areas:
Many firms still rely on legacy SIEMs, fragmented logs, or server-bound telemetry. Detection timelines often stretch beyond a week – which makes it impossible to meet the SEC’s four-day disclosure window or NYDFS’s 72-hour notification requirement once an incident is identified.
Older systems often can’t retain logs at the depth regulators require. Others don’t support centralized evidence capture, making documentation retrieval an archaeological dig instead of a controlled process.
Legacy platforms create drift. Policies and controls live in separate places. Changes aren’t tracked. Version history disappears. Regulators don’t just want policies; they want proof they were followed.
This is why the industry is seeing a growing divide. Firms running modern, cloud-based, integrated systems can demonstrate readiness on demand. Firms stuck in older architectures can’t – even when they believe they’re fully compliant.
In 2026, operational technology choices have become compliance outcomes.
The Cost of Falling Behind
The regulatory consequences are already here. In 2024 and 2025, the SEC issued multiple seven-figure fines for delayed disclosures, weak vendor oversight, and insufficient documentation. None of those enforcement actions centered on a groundbreaking breach. They all came down to one thing: process failure.
And process failure is exactly what manual, legacy environments produce.
Financial leaders know this. The pressure shows up in the survey data:
- 24% cite “keeping up with evolving requirements” as their top roadblock.
- 36% say they lack sufficient internal compliance expertise.
- 25% say inefficient or manual processes make compliance harder than it needs to be.
The fatigue is real – not because firms don’t care about compliance, but because the tools they rely on make compliance harder, slower, and more fragmented than regulators believe.
The gap isn’t in intent. It’s in the systems supporting the work.
Firms that are getting ahead aren’t throwing people at the problem – they’re modernizing the environment around the problem.
Automation is quickly becoming the backbone of compliance readiness. Modern platforms can classify data across environments, collect evidence continuously, centralize documentation, and benchmark control health without waiting for humans to update a spreadsheet.
That shift matters because regulators have shifted. Compliance today is a real-time discipline, not a quarterly task. Automation is how intent becomes evidence. The firms that build automation into their cybersecurity stack gain something spreadsheets can never provide: provable, timestamped, regulator-ready governance.
It’s also where managed partners begin to play a defining role.
More than half of financial organizations still run cybersecurity internally – but firms that partner with managed security service providers (MSSPs) or co-managed providers consistently show stronger audit readiness. Managed security partners play a critical role in operationalizing compliance:
This is the visibility regulators expect and the assurance investors assume. Compliance won’t reward effort. It will reward proof.
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