Narrowing Regulatory Priorities and Increasing Jurisdictional Complexity Key Trends to Watch in the Second Half of 2026: KPMG Mid-Year Report

After a year defined by the pace and volume of regulatory change, 2026 is increasingly being defined by how organizations manage that complexity across technology, data, consumer and investor protection, risk management, and governance, according to the new KPMG US report, Ten Key Regulatory Challenges of 2026: Midyear.

“2026 is shaping up as a year of sharper focus and wider fragmentation,” said Laura Byerly, Regulatory Insights Leader, KPMG US. “Federal regulators are zeroing in on core priorities and material risk as state and global jurisdictions diverge. Managing the regulatory stack is now a strategic imperative.”

The new midyear report revisits the Ten Key Regulatory Challenges of 2026 and highlights where momentum is accelerating, where priorities are shifting, and what to watch through year end.

1. Executing Mandates

Federal agencies remain focused on core statutory authorities, material risk, and actual harm. Regarding supervision and enforcement, the agencies continue to take a “lighter touch” approach in some areas, even as they incentivize companies to self-report, remediate, and cooperate amid continued federal, state and global regulatory divergence. 

2. Adopting Disruptive Tech & AI

Regulators are working to adapt and/or revise existing guidance to define and incorporate AI models, while national policy continues to push innovation, infrastructure, and public-private collaboration. State activity remains intense, creating heightened complexity amidst speculation on the potential for federal preemption and/or convergence of federal and state laws/regulations.

3. Maintaining Cyber & Data Security

Federal regulators are coordinating efforts to advance cyber resilience, even as state and local authorities continue to drive an expanding, though more fragmented, policy landscape tied to critical infrastructure and digital services. Data governance, data security, children’s data protections, and the integration of AI-specific risks remain important areas to watch.

4. Mitigating Financial Crimes

Bank Secrecy Act (BSA), Anti-Money Laundering (AML), and Countering the Financing of Terrorism (CFT) supervision and enforcement continues to evolve toward a more modernized, risk-based approach, emphasizing national security, “higher-risk” activities, innovation, and program effectiveness. Sanctions and secondary sanctions remain an active and shifting tool to reinforce national security and policy goals.

5. Averting Fraud and Scams

The speed, scale, and complexity of frauds and scams remain elevated, driven in part by AI, digital assets, and other forms of innovation. Enforcement priorities continue to be shaped by executive directives and targeted task forces, especially in areas tied to healthcare; procurement; trade, tariffs, and customs; and vulnerable populations.

6. Protecting Fairness

Fairness laws continue in force, with ongoing attention to clear and accurate disclosures, fair access to products and services, and protections against biased or unfair model outcomes. Federal supervision and enforcement are increasingly oriented toward intentional misconduct and demonstrable harm, while AI-related consumer- and child-protection rules continue to advance at the state level.

7. Ensuring Resiliency

Regulators continue to focus on organizations’ planning and preparedness to withstand and recover from significant market stresses and disruptions to critical infrastructure and services. Regulatory overlaps are being reconsidered alongside efforts to tailor resiliency requirements to institution size and risk profile. Expectations around cyber and technology risks including third-party concentrations and cloud dependencies are evolving.

8. Driving Capital Formation & Growth

Policy momentum continues around capital growth initiatives including rising private credit, the role of nonbank finance, access to public markets, and expanded retail participation. Regulators remain attentive to anti-competitive impacts and consumer protections while taking an “open-minded” approach to innovation and market changes. 

9. Expanding Digital Assets

Regulators and policymakers are moving quickly to develop regulatory frameworks to facilitate and expand digital and other alternative assets. With active support for licensing/chartering of novel business models, organizations should expect traditional banking to be reshaped based on the integration of digital assets.

10. Enhancing Parties & Workforce

The full third-party risk lifecycle remains a major focus as organizations become more dependent on vendors, platforms, data providers, and other critical external relationships. Workforce-related expectations are also shifting, with heightened attention to skills, safety, labor practices, and the need to balance reductions in force with demand for experienced practitioners in areas such as technology, cybersecurity, and digital assets.