London, UK – 12 March 2026 – New research from Aqua Global reveals that regulatory compliance is now outweighing customer experience in banks’ payments modernisation strategies, as legacy infrastructure struggles to keep pace with evolving industry standards.
The survey of 150 European banking IT leaders, including respondents from the UK, found that 77% of banks say regulatory demands outweigh customer demands when modernising payments systems. Meanwhile, 67% report spending more time adapting systems to new regulatory standards than improving customer experience.
Despite the focus on compliance, many banks remain concerned about their ability to keep up with accelerating regulatory timelines. 77% say missing a regulatory milestone would cause significant operational and reputational damage, yet 60% admit their current infrastructure struggles to keep pace with evolving requirements.
Increasingly complex data requirements for AML, sanctions screening and fraud detection are also exposing weaknesses in legacy systems. 72% of respondents say richer payment data requirements have revealed structural gaps in their infrastructure, particularly when capturing structured addresses, AML and sanctions data, and counterparty identifiers such as BIC and LEI.
Nick Fernando, Co-founder at Aqua Global, commented:
“The challenge with richer payment data isn’t availability, it’s fragmentation. Data often sits across multiple systems and formats, making it difficult to build a complete and trusted view of a transaction. The ability to manage and validate data at scale is becoming critical for payments resilience.”
Reflecting this shift, 81% of banks believe a unified financial messaging hub across multiple channels will be essential to remain compliant and competitive in the future.
Access the report here: https://aqua-website.azurewebsites.net/from-compliance-burden-to-competitive-advantage-report
