The landscape of corporate compliance is undergoing a significant transformation, with a substantial portion of compliance leaders anticipating a shift from their traditional roles towards strategic advisory functions. A recent survey by MCO (MyComplianceOffice) indicates that 37% of director-level or C-suite compliance professionals expect their roles to expand into providing strategic advice to their organizations. This projected evolution reflects a broader trend where technology integration, data analytics, and the increasing complexity of global risks are compelling compliance professionals to adopt a more proactive and forward-thinking approach within their companies.
The MCO survey, which polled 370 compliance leaders, highlights a dual focus for the Chief Compliance Officer (CCO) role. Currently, 42% of respondents state that the CCO role is primarily centered on engaging with regulators and interpreting policy. However, the future outlook suggests a divergence, with 36% foreseeing an evolution into data-driven compliance practices and 32% anticipating a greater utilization of technology in their day-to-day operations. This indicates a growing recognition of the value that robust data management and technological solutions can bring to effective compliance programs, moving beyond mere regulatory adherence to strategic risk mitigation and business enablement.
The Ascendance of Technology in Compliance
The MCO survey further underscores the pivotal role of technology in shaping compliance budgets. A resounding 93% of surveyed professionals expect their compliance budgets to increase, with 89% anticipating a greater investment in compliance technology. This surge in investment is being channeled into several key areas. Know Your Customer (KYC) and Anti-Money Laundering (AML) initiatives are slated for significant investment by 44% of organizations, reflecting the ongoing global efforts to combat financial crime and adhere to stringent regulatory frameworks. Artificial Intelligence (AI) tools are also a major focus, with 39% of respondents planning increased investment, signaling the growing adoption of AI for tasks ranging from risk assessment to fraud detection. Furthermore, data management solutions are a priority for 35% of organizations, highlighting the critical need for efficient and secure handling of vast amounts of compliance-related data.
The current state of compliance technology adoption reveals a fragmented landscape. Organizations are managing an average of 13.8 distinct compliance systems, often employing a combination of vendor-provided software, in-house developed solutions, and manual processes. This complexity suggests a significant opportunity for integration and optimization, potentially through more comprehensive technology platforms or strategic vendor partnerships.
Directors Embrace AI, but Policy Lags
Beyond the compliance department, the adoption of AI is rapidly accelerating within the boardrooms of corporate America. A survey conducted by OnBoard reveals that the use of AI by directors has surged to over 90%, a significant increase from 69% in 2025. This widespread adoption, impacting 92% of directors surveyed in the study of 531 directors, administrators, and enterprise leaders, is transforming how boards conduct their meetings and manage their responsibilities.
The most prevalent applications of AI for directors include summarizing lengthy board books, reports, and documents (54%), and assisting with the writing and refinement of meeting minutes (53%). Nearly half of respondents (49%) are utilizing AI to draft or format meeting agendas, while 40% are leveraging it for research and data analysis. Other reported uses include the creation of presentations and executive reports (35%), and even the anticipation of board questions and preparation of responses (33%). This suggests AI is becoming an indispensable tool for enhancing efficiency and improving the quality of board-level decision-making.
Despite this rapid adoption, a significant gap exists in formal policy development. A concerning 38% of organizations have not yet established a formal AI use policy for their directors. An additional 25% are in the process of developing guidelines, while 27% have basic or shared formal rules in place. Only a small fraction, 6%, actively enforce AI policies on their directors. This policy vacuum raises potential governance and risk management concerns as AI integration deepens.
The increased reliance on AI has, paradoxically, led to a decline in security confidence among directors. Confidence in board security dropped by 15 percentage points from 61% in 2025 to 46% in 2026, falling even below the 54% recorded in 2024. Data privacy, confidentiality, and data usage concerns were cited as the primary negative impacts of AI by 38% of respondents. This suggests that while organizations are eager to harness the benefits of AI, they are grappling with the associated security and privacy challenges, underscoring the urgent need for robust governance frameworks and security protocols. The OnBoard survey also revealed that 87% of boards acknowledge having at least one ineffective member, a statistic that may be influenced by the evolving demands of technology and governance.
Mission-Driven Organizations Prioritize Financial Stability Amidst Emerging Risks
For mission-driven organizations, including non-profits and public sector entities, financial outlooks represent the most significant organizational risk. A survey by Diligent, involving 230 board members, secretaries, and executive directors from these sectors, found that 53% identified an economic or funding downturn as their primary concern. This highlights the vulnerability of these organizations to macroeconomic fluctuations and funding challenges.
Beyond financial concerns, legislative and regulatory changes are a significant risk for 34% of these organizations. Large-scale cybersecurity breaches are a concern for 21%, indicating a growing awareness of digital threats. A breakdown in culture, ethics, or staff voice was identified as a risk by 18% of respondents, pointing to the importance of internal integrity and employee engagement. Emerging technologies like AI, and the spread of misinformation and disinformation impacting stakeholder perception, were flagged as risks by 17% of organizations. Notably, 11% expressed concern about confidential information being leaked from unsanctioned AI events, a specific risk amplified by the growing use of AI.
To enhance board risk oversight, a significant portion of respondents (38%) believe that more frequent and structured risk discussions at the full board level are crucial. Other suggested improvements include a clearer linkage between risk and strategy (28%), a more defined delineation of roles (24%), deeper integration of risk into committee agendas (20%), and enhanced management reporting (20%). These findings suggest a desire for more integrated and strategic approaches to risk management within these organizations.
Board meeting effectiveness is also a focus for improvement. Almost half of respondents (49%) called for increased time dedicated to strategic planning. Furthermore, 37% desired better tools and processes for managing agendas and board materials, and 31% advocated for a reduction in presentation-heavy meetings, indicating a preference for more dynamic and outcome-oriented board discussions.
Cyber Threats and AI Risks Dominate Future Concerns
As organizations look towards 2027, cyber threats are emerging as the most pressing concern. A joint survey by Protiviti and North Carolina State University’s Enterprise Risk Management Initiative, which polled 1,330 global board members and C-suite executives, found that cybersecurity threats ranked highest among anticipated risks. Participants rated potential impacts on a scale of one (no impact) to five (extensive impact), with cybersecurity threats receiving an average score of 3.58.
Closely following cybersecurity is the emergence of new risks associated with the implementation of AI, which garnered a score of 3.45. This indicates a significant and growing apprehension about the unknown risks that advanced AI technologies may introduce. Economic conditions and regulatory concerns also feature prominently, ranking third and fourth respectively with scores of 3.41 and 3.37. The rapid pace of disruptive innovations driven by emerging technologies or other market forces rounded out the top five concerns, with a score of 3.36.
These immediate concerns are mirrored in the long-term challenges identified by respondents. A substantial 41% cited security and privacy as a long-term challenge, while 40% pointed to AI deployment, and 38% identified markets and economies as enduring challenges. This suggests a strategic imperative for organizations to develop robust, multi-year plans to address these evolving risk landscapes.
Banking Sector Cautious on Agentic AI in Lending
Within the financial services sector, a significant portion of professionals express apprehension regarding the use of agentic AI in critical functions like lending and underwriting. A survey by Wolters Kluwer, involving 230 bank professionals, revealed that 33% consider the application of agentic AI in lending and underwriting workflows to be a top risk. This concern is likely driven by the potential for algorithmic bias, the complexity of regulatory compliance in AI-driven decision-making, and the need for transparent and accountable processes.
An almost equal proportion (30%) identified collections and recovery as another area where agentic AI could pose significant risks. This suggests that the automation of sensitive customer interactions and financial recovery processes requires careful consideration to ensure ethical practices and regulatory adherence.
The survey also highlighted preparedness gaps in managing AI-related incidents. Nearly 38% of respondents feel least prepared for regulatory reporting of an AI failure, indicating a need for clearer guidelines and robust reporting mechanisms. Furthermore, 34% reported that model kill-switch protocols are not adequately in place, underscoring the importance of having mechanisms to safely and effectively halt AI systems in case of malfunction or unintended consequences.
Regarding AI safety frameworks, 34% of respondents identified automation bias as the greatest risk, emphasizing the danger of over-reliance on AI outputs without critical human oversight. Another 27% pointed to the misalignment of incentives as a key risk to AI safety, suggesting potential conflicts between the objectives of AI systems and broader organizational or societal goals. These findings underscore the complex challenges that financial institutions face in responsibly integrating AI into their operations, balancing innovation with stringent risk management and regulatory compliance.
