RegTech in 2024 Wrap-Up: A Year of AI, Data Standardization and Sustainability

The regulatory technology (RegTech) landscape in 2024 has been marked by significant innovation and widespread adoption, driving transformative advancements in compliance, regulatory reporting, monitoring, and risk management. The year witnessed adoption of data standards across geographies with a global push toward enhanced transparency, accountability, and sustainability. The early-year surge in Artificial Intelligence (AI) and Large Language Models (LLMs) acted as a key catalyst for innovative regtech tools, while growing global concerns about sustainability led to the introduction of several ESG mandates worldwide. Powered by the transformative potential of XBRL, RegTech in 2024 has enabled businesses to meet increasingly complex regulatory requirements with unparalleled efficiency and precision. The year also marked significant strides in digitalization, as regulators worldwide embraced RegTech to streamline processes, reduce fraud, and improve data accuracy.  

In this comprehensive wrap-up, we’ll discuss the key regulatory and sustainability updates and milestones that defined 2024, highlighting the critical role regtech played in shaping the future of compliance and governance. Together, let’s explore regional advancements and global initiatives that underscore how RegTech has evolved into a fundamental element of modern regulatory frameworks. 

AI proved instrumental in addressing challenges such as data complexity, real-time reporting, fraud detection, and regulatory compliance throughout the year. Its key applications included: 

1. Automation and Efficiency: AI-powered tools streamlined data collection, tagging, and reporting processes, significantly reducing human intervention and the risk of errors. 
2. Predictive Analytics: Advanced algorithms analyzed trends, forecasted compliance risks, and provided actionable insights to organizations. 
3. Natural Language Processing (NLP): AI enabled seamless interpretation and processing of regulatory texts, helping businesses decode complex mandates. 
4. Machine Learning (ML) for Continuous Improvement: Adaptive learning models ensured that RegTech solutions evolved with changing regulations, enhancing long-term compliance capabilities. 

US FASB Taxonomy Enhancements: 

In 2024, the Financial Accounting Standards Board (FASB) introduced proposed improvements to the 2025 US GAAP Financial Reporting Taxonomy. This initiative aims to elevate the quality, clarity, and usability of financial reporting by leveraging cutting-edge artificial intelligence technologies. 

Key among these enhancements is the integration of AI tools for taxonomy validation. By incorporating AI, FASB addresses one of the critical challenges in financial reporting—maintaining consistency and accuracy across diverse reporting scenarios. This initiative aligns with broader industry trends emphasizing automation and digital transformation in compliance and regulatory practices. 

The 2025 taxonomy enhancements represent a forward-thinking step in the evolution of US GAAP, setting the stage for more transparent and reliable financial reporting.  

 

• SEC’s EDGAR Next Initiative 

The U.S. Securities and Exchange Commission (SEC) introduced significant upgrades to its Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system through the EDGAR Next initiative. A notable feature of the same is the integration of APIs (Application Programming Interfaces) designed to enable automated interactions with the system. These APIs empower filers to automate routine tasks, such as data uploads and retrievals, significantly reducing manual effort and the potential for errors. This automation capability is particularly beneficial for high-volume filers, who can now streamline their submission processes more effectively. 

 

In addition to APIs, the SEC has incorporated AI-powered tools within EDGAR Next to assist users in preparing and analyzing filings. These tools provide enhanced capabilities to detect errors, ensure compliance with regulatory requirements, and offer insights into filing trends across industries. The AI-driven analytics also provides filers with valuable data to optimize their disclosure strategies and improve reporting accuracy. 

During its beta testing phase, the EDGAR Next initiative demonstrated robust adoption by filers, who reported improved efficiency and user experience. With full implementation anticipated by 2025, this initiative marks a transformative step for the SEC in enhancing its technological infrastructure.  

 

• SEC’s Proposed Climate Risk Disclosure Rules: 

The US SEC also made significant strides in advancing climate risk disclosures through proposed rules that require publicly traded companies to provide detailed information on their climate-related risks. These disclosures are aimed at enhancing transparency regarding the financial impact of climate change and the strategies companies are implementing to mitigate associated risks. 

The SEC’s proposed rules focus on requiring firms to disclose both physical and transition risks related to climate change, as well as their governance structures and risk management practices. The rules also address the need for standardized reporting of greenhouse gas emissions and the integration of climate-related risks into financial statements. 

European Union 

• Public Country-by-Country Reporting (CbCR): 

The European Commission mandated the implementation of Public Country-by-Country Reporting (CbCR) starting January 2025, requiring companies to disclose financial information in XHTML and Inline XBRL formats. This regulation aims to enhance transparency by ensuring that companies report their operations, profits, and taxes paid in each country they operate. To meet these requirements, AI-powered tools are being utilized to improve data tagging accuracy, ensuring consistency across borders and enhancing the quality of disclosures. This move reflects the EU’s commitment to increasing corporate transparency and strengthening tax compliance within multinational enterprises. 

• EFRAG’s XBRL Taxonomy: 

The European Financial Reporting Advisory Group (EFRAG) introduced its XBRL taxonomy for the European Sustainability Reporting Standards (ESRS) and Article 8 disclosures. This taxonomy facilitates standardized and transparent sustainability reporting for companies across industries. To enhance accuracy, AI-assisted validation mechanisms are employed to ensure correct tagging and seamless integration of sustainability data. These advancements support consistent and reliable disclosures, aiding companies in meeting regulatory requirements while improving the overall quality of sustainability reporting within the European Union. The initiative aligns with the EU’s goal of fostering sustainable business practices and increasing transparency. 

• Greenwashing Supervision: 

The European Supervisory Authorities (ESAs) have enhanced their oversight of greenwashing, focusing on ensuring the integrity of ESG claims made by companies. AI tools play a key role in monitoring and detecting inconsistencies in sustainability disclosures, enabling regulators to identify misleading or false claims. These tools improve the accuracy and reliability of ESG reporting, fostering greater trust in the market. By leveraging AI for more effective supervision, the ESAs aim to protect investors and consumers from deceptive practices while promoting genuine sustainability efforts within the European Union. 

 

• Court of Auditors’ Online System 

Italy’s Court of Auditors implemented an XBRL-based system for the submission of financial statements, streamlining the reporting process for government entities. This digital transformation allows for more efficient collection and analysis of financial data, improving overall transparency and accountability. The system is supported by AI-powered analytics, which enhances comparative reporting capabilities by allowing auditors to analyze trends and discrepancies across multiple reports. Additionally, AI tools help improve enforcement by flagging inconsistencies and ensuring compliance with regulatory standards. This innovation contributes to more accurate public financial reporting and strengthens the auditing process in Italy. 

• Digital Taxonomies for Mutual Guarantee Institutions  

Italy’s Agency for Digital Italy has introduced XBRL taxonomies tailored to the needs of smaller institutions, particularly Mutual Guarantee Institutions (MGIs), as part of its push to modernize financial reporting. This initiative provides a structured framework for these institutions to submit their financial data in a consistent and standardized format, aligning with national regulatory requirements. AI tools play a crucial role in supporting the adoption of these taxonomies by assisting early adopters in validating and submitting their data. These AI-driven tools help ensure accuracy and compliance, reducing the risk of errors in reporting. The digital taxonomies not only streamline the submission process but also improve the efficiency of financial monitoring for regulatory bodies. By leveraging advanced technology, Italy is facilitating a more transparent and reliable financial reporting environment, which is particularly beneficial for smaller institutions that may lack the resources for more complex systems. 

 

• IFRS Sustainability Disclosure Taxonomy: 

South Africa has adopted the International Sustainability Standards Board (ISSB) taxonomy for sustainability reporting, aligning with global standards for environmental, social, and governance (ESG) disclosures. This adoption is part of South Africa’s commitment to enhancing corporate transparency and driving sustainable business practices. To ensure real-time compliance and accurate reporting, AI-powered tools have been integrated into the process. These AI tools enable automated tagging of sustainability data, making the reporting process more efficient and reducing the risk of errors. Additionally, AI supports compliance verification by cross-referencing submitted data with regulatory standards, ensuring that companies adhere to both local and international ESG reporting requirements. By leveraging the ISSB taxonomy and AI technologies, South Africa is strengthening its commitment to sustainable development while improving the reliability and accuracy of ESG disclosures for businesses operating within the country. 

Egyptian Exchange (EGX) 

• XBRL Adoption: 

The Egyptian Exchange (EGX) adopted XBRL (eXtensible Business Reporting Language) to enhance financial transparency and streamline reporting processes. By integrating AI-driven platforms, EGX enabled seamless data submission, efficient categorization, and real-time analysis of financial reports. These platforms facilitate more accurate and standardized disclosures, ensuring compliance with regulatory requirements while improving accessibility for stakeholders. The adoption of XBRL also supports more effective decision-making and boosts investor confidence, as it ensures the integrity and consistency of financial data. This move positions EGX as a leader in adopting advanced technologies to improve financial reporting and transparency in the region

Australia 

• Draft ESG Reporting Law: 

Australia’s draft ESG reporting law mandates climate-related disclosures in alignment with global standards, aiming to enhance transparency and accountability in sustainability practices. The law requires businesses to report on their climate risks, greenhouse gas emissions, and transition strategies. AI-powered reporting platforms play a crucial role in helping organizations meet these new requirements by automating data collection, analysis, and compliance verification. These platforms ensure accurate emissions reporting, streamline the disclosure process, and enable businesses to efficiently adhere to the evolving regulatory landscape, driving greater environmental responsibility and transparency across sectors. 

India 

• RBI’s Climate Risk Framework: 

On 28 February 2024, the Reserve Bank of India (RBI) introduced a draft framework for climate risk disclosures, aiming to enhance financial institutions’ preparedness for climate-related risks. This framework requires entities to disclose their climate governance, strategy, risk management practices, and associated metrics. AI-powered tools assist in streamlining data collection and analysis, ensuring compliance with the RBI’s guidelines. These tools help businesses align with the framework’s objectives, enabling them to accurately report on climate risks and integrate them into their decision-making processes, thereby fostering greater financial sector resilience against climate challenges. 

Singapore 

• ISSB Standards Implementation: 

Singapore’s mandatory climate reporting initiative incorporated AI to simplify Scope 1, 2, and 3 emissions reporting, boosting transparency and accountability. AI tools streamline data collection, improve reporting accuracy, and ensure compliance with ISSB standards, boosting accountability in the corporate sector. This move underscores Singapore’s commitment to fostering sustainable business practices and promoting climate transparency across industries.     

Malaysia 

• e-Invoice Implementation 

In another significant development, Malaysia has rolled out its mandatory e-invoicing system in 2024. The move towards e-invoicing is part of the country’s broader efforts to digitize its tax administration and streamline the collection of tax revenues. This system mandates that all businesses issue and report invoices electronically, significantly reducing manual processes, enhancing data accuracy, and promoting compliance with tax regulations. The adoption of e-invoicing will provide the Malaysian tax authorities with real-time access to transactional data, improving the efficiency of tax audits and reducing opportunities for fraud and tax evasion. Additionally, this initiative will align Malaysia with global best practices in digital tax administration, providing businesses with more streamlined processes and enabling better data exchange between companies and regulators. 

MBRS 2.0 Went Live: 

Malaysia’s Companies Commission (SSM) launched MBRS 2.0 on September 25, 2024, mandating digital submissions from December 1, 2024. Built on XBRL, it enhances compliance accuracy and efficiency for over a million businesses. MBRS 2.0 offers tools like taxonomy mapping, digital signatures, and validation checks, streamlining filings such as annual returns, financial statements, and exemption applications. Phased implementation spans December 2024 to June 2025, easing the transition 

• IPSASB Climate Disclosure Standard 

The International Public Sector Accounting Standards Board (IPSASB) introduced a draft climate disclosure standard aimed at enhancing sustainability reporting within the public sector. This standard provides guidelines for public entities to disclose climate-related risks, financial impacts, and strategies for mitigating these risks, ensuring greater transparency and accountability in government operations. To streamline this process, AI-driven solutions were employed to help public sector entities prepare feedback, ensuring the alignment of their disclosures with evolving global norms. These AI tools assist in automating the collection, categorization, and validation of data, significantly improving the efficiency and accuracy of reporting. By leveraging AI, public entities can stay abreast of the latest climate disclosure requirements, thus enhancing their ability to make informed, sustainable decisions while fostering trust and transparency in their financial reporting practices. The proposed standard marks a significant step in integrating sustainability into public sector financial frameworks. 

• Global Progress in Climate-Related Disclosures 

A new report highlights advancements towards mandatory and voluntary climate-related corporate disclosures worldwide. Over 1,000 companies have referenced the International Sustainability Standards Board (ISSB) in their reports, with 30 jurisdictions working towards incorporating ISSB Standards into their regulations. 82% of companies disclosed information aligned with at least one of the TCFD recommendations, yet fewer than 3% fully met all 11 recommendations. Many companies lack disclosures on climate-related governance, strategy, risk management, and metrics, which, if omitted, prevent investors from receiving the necessary information to assess and price climate-related risks and opportunities effectively. 

• Nature and Human Capital Disclosures  

The ISSB initiated research into disclosures on nature, ecosystem services, and human capital, expanding the scope of sustainability reporting. This expansion arises from consultations on future priorities and reflects the increasing demand for a comprehensive approach to sustainability reporting. While human rights disclosures were not pursued, the ISSB aims to enhance the SASB Standards in response to market feedback, broadening the scope of sustainability reporting to include critical environmental and social dimensions. 

2024 has been a landmark year for RegTech, with technology continuing to reshape how businesses and regulators approach compliance, reporting, and risk management. The growing complexity of the regulatory environment, particularly in the realm of sustainability, has led to the adoption of more advanced technologies, including Artificial Intelligence (AI), taxonomies, and data standards. These innovations are not only streamlining compliance processes but also driving transparency and accountability in corporate sustainability efforts. 

2025 and Beyond 

The fusion of AI and RegTech has reshaped the regulatory landscape in profound ways. From AI-enhanced financial reporting taxonomies to the integration of machine learning in real-time compliance and climate risk disclosures, the momentum is undeniable. 

However, the journey is far from complete. As we move into 2025, the emphasis will continue to shift toward refining AI-powered tools for greater precision, adaptability, and scalability in regulatory processes. More and more jurisdictions are expected to adopt AI-driven frameworks, as regulatory technology becomes an essential component of business strategy in both the public and private sectors. 

2025 will likely see an acceleration in the adoption of AI-powered RegTech solutions, especially as companies and regulators navigate new ESG disclosure requirements, climate-related regulations, and the growing demand for transparency in financial reporting. 

Read our Regtech Trends to look out for in 2025 here. 

 As businesses continue to embrace sustainability and digital transformation, AI’s role in regulatory compliance will only become more central, helping organizations meet the evolving needs of both regulators and stakeholders. 

The future of RegTech is bright, with AI continuing to shape how compliance, reporting, and risk management evolve. The innovations of today lay the foundation for an even more streamlined, efficient, and transparent regulatory ecosystem in the years to come.