Following the Rules

What happens when regulators become so close to the industries they oversee that they stop questioning the assumptions those industries make?

It's a risk that goes well beyond lobbying or conflicts of interest. Regulators can gradually adopt the perspectives of the firms they're supposed to scrutinise, until protecting the industry's interests starts to feel indistinguishable from serving the public interest.

It's known as cultural capture. And with UK financial regulators under mounting pressure to support growth and competitiveness, the question of how they maintain independent judgement is particularly pressing.

Joining me are Alex Chesterfield, a former Principal Behavioural Scientist at the Financial Conduct Authority and former Group Head of Behavioural Risk at UK lender NatWest, who is now researching regulatory culture and AI at the London School of Economics.

And Professor Tom Reader, also of the London School of Economics, whose research focuses on organisational culture, risk and institutional failure.

We discuss whether the FCA's pro-growth agenda could influence supervisory decisions, the dangers of regulators “flip-flopping” between political priorities, and how cultural capture contributed to failures before the global financial crisis.

We also explore whether AI could help uncover the early warning signs of regulators becoming too close to the industries they oversee and what it takes to ensure they remain capable of challenging the firms they're there to hold to account.

Today’s episode is a special one. It’s brought to you in partnership with Smarsh, the technology firm that helps regulated organizations of all sizes, including financial institutions, capture, govern, and monitor their communications.

This episode forms part of a Following the Rules series, focused on practical guidance for firms navigating legal, regulatory and technological change.

Today we're examining how artificial intelligence is transforming communications compliance, and why the biggest challenge for financial institutions may no longer be the technology itself, but how they put it to work.

After years of regulatory scrutiny over off-channel communications, firms are now confronting a much broader challenge. AI is creating new forms of communication that need to be governed, while offering opportunities to make surveillance more effective, reduce false positives and extract greater value from the data firms already hold.

So how can compliance teams distinguish genuine AI innovation from hype? What does it take to deploy these tools responsibly? And how might AI fundamentally change the role of compliance?

Joining me to discuss this is Kim Crawford Goodman, Chief Executive Officer of Smarsh.

We explore the company's own AI transformation, the barriers to smarter surveillance, and what compliance leaders should be doing now to prepare their programmes for the next five years.

Today’s guest warns that financial services’ boards that place too  much emphasis on compliance risk making their firms less well governed, by crowding out strategic debate and encouraging executives to focus on proving they have ticked the right boxes rather than exercising good judgment.

She also makes the case for preserving the UK’s Senior Managers and Certification Regime, arguing that dismantling it now could ultimately damage the market, even as she calls for parts of the regime to be streamlined.

And, as AI and better data transform both financial firms and their regulators, she considers whether technology could eventually support a simpler rulebook, with greater reliance on judgment and individual accountability.

Sally Dewar’s has spent her 35-year career working across regulation, financial services and corporate governance. A former senior regulator at the Financial Services Authority, she went on to lead international regulatory affairs at JPMorgan Chase before spending six years as CEO of A&O Consulting, the law firm’s regulatory advisory business. Since 2024, she has advised firms, boards and senior executives across the industry, on governance, culture, conduct and regulatory risk as a director at Adelstow Advisory.

The UK crypto industry is approaching a fundamental regulatory shift. Firms that have operated under relatively limited oversight by the UK’s Financial Conduct Authority are preparing to become fully regulated financial services businesses, bringing much broader expectations around governance, consumer protection, capital and conduct.

Today’s episode is part of a Following the Rules series delivering practical guidance on legal, regulatory, technological and cultural change.

In this episode, we explore what the FCA will really be looking for when its crypto authorisation gateway opens, including why using AI to produce policies and controls won’t compensate for senior managers who don’t understand them, and why the FCA’s growth objective will not mean lowering the authorisation bar.

Joining me is Dominic Cashman, the FCA’s Director of Authorisations and one of the people at the heart of determining which firms meet the regulator’s standards for entry. He spent 25 years in senior operational and transformation roles across major financial firms, including TP ICAP, Nomura and Deutsche Bank, before joining the FCA in 2022

We discuss how the FCA will judge whether firms are genuinely ready for regulation, the red flags that can reveal deeper problems with culture and leadership, and why Cashman believes a young crypto industry needs to prepare for the existential crises it has yet to face.

Today’s guest cautions that regulators face a growing gap in understanding and managing the scale and complexity of AI risks and asks whether traditional, technology-neutral regulation can keep pace as adoption accelerates.

He also discusses how Dubai International Financial Centre is weathering conflict in the Middle East. Firms and capital continue to flow into the Centre, but he says that the impact could become more pronounced as businesses reprice a conflict many expected to be short-lived.

And, amid disruption to cloud infrastructure in the region, he discusses operational resilience, technology concentration, and whether regulators themselves fully understand their exposure to critical infrastructure.

Mark Steward is one of the most experienced international regulators of his generation. He previously held senior roles at the Australian Securities and Investments Commission and Hong Kong’s Securities and Futures Commission, before spending seven years at the UK’s Financial Conduct Authority, where he led Enforcement and Market Oversight and latterly also oversaw its International Division.

Since May 2025, he has been Chief Executive of the Dubai Financial Services Authority (DFSA), leading the regulator for one of the world’s fastest-growing financial centres.

He spoke with Following the Rules on 26 August.

Regulation has never been under greater scrutiny. Around the world, governments are asking regulators to support growth and innovation while continuing to protect consumers, preserve financial stability and prevent the next crisis, and increasingly, to do all of it at once, as if the trade-offs between them didn't exist.

Today’s episode is part of a Following the Rules series delivering practical guidance on navigating legal, regulatory, technological and cultural change.

Joining me are Lyndon Nelson, former Deputy CEO of the Prudential Regulation Authority and Executive Director at the Bank of England, where he spent more than 30 years in senior regulatory and supervisory roles, and Gavin Stewart, a former senior leader at the Bank of England, the Financial Services Authority and the Financial Conduct Authority, including serving as the FCA's Chief Risk Officer. Together, they are the authors of Building Better Regulators: The Art of the Impossible.

In this episode, we discuss why regulation is fundamentally about managing trade-offs rather than eliminating risk, why regulators remain among the least understood public institutions, and what happens when political pressure demands growth, competitiveness and stability all at once, without acknowledging that something has to give.

Whether you work in regulation, financial services or public policy, this episode offers a practical and timely perspective on what it really takes to build better regulators.

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You can pre-order Building Better Regulators: The Art of the Impossible here.

Today's episode is a special one, produced in association with Smarsh, a technology firm that helps financial institutions capture, govern and monitor their communications.

This episode forms part of our Following the Rules: How To series, focused on practical guidance for firms navigating legal, regulatory and technological change.

Today we're discussing Smarsh's new 2026 AI Trends Study, conducted by FTI Consulting, which argues that communications data is moving from being a regulatory obligation to one of an organisation's most valuable strategic assets. But it also highlights a growing challenge. While firms are racing to deploy AI, governance is struggling to keep pace. Communications data remains fragmented, shadow AI is creating new blind spots, and many compliance teams are being asked to manage risks they were never designed to oversee.

So what does good AI governance actually look like? How do firms unlock the value of communications data without creating new regulatory risks? And what should compliance leaders be doing now to build the right foundations for AI?

Joining me to discuss this is Goutam Nadella, Chief Strategy Officer at Smarsh. We explore the report's findings, why AI governance starts with data governance, and why the firms that get this right may find compliance becoming a competitive advantage, rather than simply a control function.

Today’s episode is a little different to normal. It’s a recording of a panel discussion I was Invited to moderate a recent event convened by the Managed Funds Association or MFA, the global trade body for the alternative asset management industry, and organised by POLITICO.

The discussion brought together senior figures from across financial services, regulation and policymaking to explore one of the  biggest questions facing the UK today: how to balance growth, competitiveness and financial stability. We discussed whether the UK’s regulatory reforms are delivering on their ambitions, the role of regulators in supporting innovation, the future of UK capital markets, and what it will take for the UK to remain a leading global financial centre.

I hope you enjoy it.

Today’s guest argues that one of the biggest risks facing financial services isn’t market volatility or even regulatory complexity. It’s the growing politicisation of the rulebook around the world.

As geopolitical tensions rise and regulatory regimes increasingly diverge, he warns that firms are being forced to navigate a world where consistency and predictability can no longer be taken for granted. From the UK’s search for competitiveness to deregulation in the US and a different trajectory in Europe, he explains why fragmentation is becoming a strategic challenge for legal and compliance teams.

He also reflects on how the role of legal and compliance is changing. Increasingly, it is about helping businesses navigate uncertainty, exercise judgment and build cultures where challenge, escalation and accountability are embedded long before problems emerge. And as AI reshapes the way firms identify risk, he discusses how new technologies could transform compliance functions while also raising expectations of what firms should be able to see and prevent.

Chris Barlow’s 30-year career includes more than two decades at international bank Nomura, where he now guides its Europe, Middle East and Africa business through regulatory change, market disruption and evolving risk landscapes as a Managing Director, and Nomura’s General Counsel for EMEA, Joint Wholesale Chief Compliance Officer and Head of Legal and Compliance for the bank’s EMEA operations.

Today’s episode is produced in association with Willis, one of the world’s leading risk advisory, broking and solutions businesses.

It is also part of a Following the Rules series delivering practical guidance on navigating legal, regulatory, technological and cultural change.

Insurance has traditionally been viewed as a way of transferring risk. But for financial institutions facing rising regulatory scrutiny, growing cyber threats and the rapid emergence of AI, insurance is now becoming a much more strategic board level issue. Boards are increasingly expected to understand exactly what they’re buying, what it covers and how it fits into the firm’s wider resilience strategy.

So what does good insurance governance actually look like? How should firms decide what cover they need? How much is enough? And as risks become more interconnected, where are the biggest gaps beginning to emerge?

Joining us to discuss these questions are three experts in the field.

Claire Nightingale is a former bank General Counsel and Head of Global Banking Compliance who now helps financial institutions navigate and recover complex insurance claims as Global Head of FINEX Financial Institutions Claims Advocacy at Willis. Andrew Hill is a former insurance lawyer who now leads Willis’ Cyber Coverage and Innovation team alongside its AI coverage strategy. And Paul Search is a Managing Director at Willis, specialising in operational risk, insurance strategy and capital optimisation.

Together, they unpack why insurance is becoming a board-level issue in entirely new ways, and what firms need to do now to stay ahead.