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Perspectives

2025 banking regulatory outlook: Gearing up for change

What banking changes will the new administration introduce?

In 2025, the banking industry faces a dynamic regulatory landscape shaped by a new administration and evolving supervisory priorities. Even with potential deregulatory efforts that may be considered by the new administration, banks should prioritize governance, risk management, and compliance to manage uncertainties, address outstanding issues, and remain competitive. Explore insights that can help banks thrive amid change.

Despite a shift in administrations, the banking industry will likely remain focused on addressing outstanding supervisory issues and demonstrating sustainable remediation in 2025. Institutions should prioritize governance, risk management, and compliance programs while remaining competitive and innovative to meet customer expectations. Failure to execute strong remediation and regulatory compliance could lead to higher remediation costs and extended time in the regulatory “penalty box.”

For our 2025 banking regulatory outlook, we’ve identified four key topics affecting the industry:

  • Navigating an uncertain regulatory environment
  • Evolving supervisory focus on issue remediation
  • Financial resilience remains top of mind
  • Keeping an eye on non-financial risks and internal controls
2025 banking regulatory outlook

US elections and consequences for personnel and policy

A new presidential administration and changes in party control across both chambers of Congress are expected to affect the regulatory environment for banks and other financial institutions in 2025. A second Trump administration will introduce new regulatory leaders and is likely to focus on deregulatory efforts, including rolling back of—or even potentially overturning—several of the previous administration’s regulatory initiatives. While a more permissive regulatory environment is expected, changes to financial supervision typically come more slowly. Banks will still need to address their existing supervisory findings and should continue to prioritize improving their risk management and controls.

President Trump could revoke executive orders from President Biden on mergers, climate risks, and artificial intelligence (AI) and revive prior deregulatory orders. The new administration might also look to ease regulations on bank mergers and nonbank entries.

Future in focus: The four key themes

Bank supervision in 2025 will likely entail a continued emphasis on issue remediation from supervisors. Despite the new administration, firms will continue to have examinations with regular interaction, and ongoing monitoring with their supervisors and banks will still be expected to close outstanding issues and enforcement actions and improve or sustain their risk management and controls. In recent years, supervisors have adopted a more assertive stance in identifying and escalating supervisory concerns. This change is evident in the trends of supervisory ratings and enforcement actions, prompting many banks to refocus their efforts on remediating outstanding findings and “clearing their deck” as they position themselves for their next examination cycle.

Our experience shows supervisors are closely examining banks’ financial vulnerabilities and their ability to appropriately respond to changing financial conditions. The new administration is likely to focus on balancing core financial resilience within the banking system and promoting financial market growth. The impact of policy direction change will likely not be applied evenly to all regulations, with some proposals potentially being softened in regulatory approach and others delayed, significantly revised, or not finalized. The future direction of capital requirements, including Basel III Endgame and new long-term debt requirements, will significantly affect banks’ capital and funding structures.

While changes to any presidential administration may create some uncertainty about the direction and priorities of incoming leaders, there are some important areas we believe banks should focus on across administrations. These areas include strengthening operational resilience and cybersecurity, proactively addressing evolving financial crime and fraud typologies, and effectively managing third-party relationships. Additionally, banks should consider the emerging development of AI and how it may fit within the institution’s risk management framework.

Seizing new opportunities and achieving sustainable growth

Banks are entering 2025 with numerous regulatory challenges and opportunities. A new administration provides a chance to reshape banking regulations and create new business avenues. However, the year will be marked by complexity and uncertainty as recent Supreme Court decisions and industry-led legal challenges create an unpredictable regulatory environment. Banks should be cautious of regulatory fragmentation, which could result in inconsistent requirements across federal agencies.

The regulatory focus will likely be on issue remediation and financial resilience. Changes to bank capital and liquidity rules may have an impact on cost structures, while non-financial risks such as operational resilience, cybersecurity, third-party risk management, financial crime, and AI are expected to remain priorities. Given this, banks should prioritize regulatory engagement and strong governance frameworks. Staying responsive to supervisory feedback, addressing supervisory findings, and maintaining agility will be crucial to navigating the fast-evolving landscape.

The financial services industry has much to prepare for in 2025. Discover how financial services organizations can integrate regulatory considerations into their strategy, keep pace with regulatory changes and enforcement priorities, and anticipate the regulatory impact on their current or future operating model. 

2025 Financial Services Regulatory Outlooks

If you are interested in learning more about the banking industry, check out our recently released 2025 banking and capital markets industry outlook here.

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