APAC firms are doubling down on compliance investments amid rising enforcement pressures. A new report from Regtech firm SteelEye underscores this trend, while ongoing debates around GDPR and MiFID II highlight the intricate balance between data retention and privacy.
These developments seemingly signal a pivotal moment for financial institutions striving to stay ahead of regulatory scrutiny.
According to SteelEye’s 2025 Annual Compliance Health Check Report – APAC Snapshot, 84% of APAC firms have boosted their compliance budgets over the past year.
This surge marks an acceleration in spending, outpacing global averages and reflecting the region’s proactive stance against intensifying regulatory demands.
Conducted by Censuswide and surveying 300 senior compliance decision-makers across APAC, Europe, and the US between January and February 2025, the report paints a picture of strategic reinvestment driven primarily by technology.
The core catalyst? A push toward advanced surveillance tools to close persistent gaps in monitoring.
Firms are channeling funds into AI, voice analytics, and encrypted communications oversight, areas where blind spots could invite hefty fines.
Matt Smith, CEO of SteelEye says,
“APAC firms are leading the way in compliance investment, but the picture is far from uniform. Regulators in the region are stepping up enforcement, and firms cannot afford to let these gaps undermine their progress.”
Yet, challenges abound.
Regionally, 39% of respondents struggle to transform raw surveillance data into actionable board-level management information, hampering strategic decision-making.
Staff resourcing emerges as another pain point, particularly in Australia, where talent shortages exacerbate operational strains.
The report reveals stark differences across key APAC hubs, underscoring the need for tailored strategies.
Singapore stands out as a global leader in AI adoption, with 97% of firms integrating it into surveillance workflows—96% of those users report tangible improvements in efficiency and accuracy.
However, it lags in monitoring off-channel communications, with only 31% tracking WhatsApp usage, leaving potential vulnerabilities in employee-client interactions.
Hong Kong, meanwhile, excels in encrypted messaging surveillance, boasting a 49% WhatsApp monitoring rate—the highest in the survey.
Yet, AI uptake trails at 39%, suggesting a reliance on traditional methods that may not scale with rising data volumes.
Australia prioritizes foundational compliance, with 79% investing in archiving solutions and 66% in regulatory reporting tools.
Alarmingly, though, just 11% monitor WhatsApp, the lowest globally, compounded by acute staffing woes.
These disparities highlight a broader imperative: viewing compliance as “competitive infrastructure,” as Smith puts it, rather than a mere cost center.
Winners will leverage tech to not only meet but exceed regulatory expectations, turning compliance into a differentiator.
While APAC firms ramp up budgets, European regulations like GDPR and MiFID II continue to influence global practices, especially for multinational operations.
A recent SteelEye analysis delves into the tensions between MiFID II’s exhaustive record-keeping mandates and GDPR’s stringent personal data protections, offering a roadmap for harmonization.
MiFID II, the EU’s Markets in Financial Instruments Directive II, enforces a “save-everything” ethos.
It requires financial firms to retain vast troves of client and employee data—communications, orders, and transactions—for up to seven years, ensuring audit trails for market abuse prevention and transparency.
This breadth is non-negotiable, with non-compliance risking multimillion-euro penalties.
GDPR, the General Data Protection Regulation, flips the script with a privacy-first lens.
It governs the processing of personal data—any information identifying individuals, from emails to transaction details—demanding explicit consent, data minimization, and swift erasure rights.
Retention must be justified and limited, clashing head-on with MiFID II’s archival demands.
The overlap is inevitable: MiFID records often contain GDPR-protected personal information, creating a compliance tightrope.
Firms must retain for regulatory audits while anonymizing or pseudonymizing data to safeguard privacy.
Failure here invites dual jeopardy—fines from both the European Securities and Markets Authority (ESMA) under MiFID II and data protection authorities under GDPR.
Practical navigation starts with robust documentation.
Firms should map data flows, procedurize retention policies, and integrate tools that automate redaction and access controls.
SteelEye advocates for unified platforms that handle surveillance while embedding GDPR-compliant features, like automated data lifecycle management. ”
Balancing these regimes isn’t optional—it’s essential for sustainable operations,” the analysis concludes, urging demos of integrated solutions.
For APAC firms, these updates converge on one truth: compliance is no longer siloed but a holistic enterprise.
The 84% budget hike signals readiness, but success hinges on addressing regional gaps and mastering transatlantic regulatory nuances like GDPR-MiFID II.