How often do we hear of the “regulatory burden”, the kind supposed to weigh organisations down? But really smart businesses have flipped the switch, turning compliance constraints into a source of competitive advantage and using it to power innovation.
That’s good news, given just how many sectors are now regulated.
“When we consider the traditional regulated sectors, we think of financial services, healthcare, transportation and utilities. However, due to advancements in technology, environmental impact and the interconnected digital world we now live in, the new wave of regulation is becoming somewhat industry agnostic,” says Moira Cronin, partner, digital risk, at PwC Ireland.
“Regulation around ESG [environmental, social and governance], cyber and AI, and those impacting supply chains of historically regulated industries, such as tech firms, are coming at all industries hard and fast.”
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It means many more businesses must keep pace with the risks the globally interconnected world is creating. What’s more, the new world order emerging in relation to trade is only making things more complex.
“The geopolitical landscape is very fast paced and has led to a fragmentation of our global economy. This has resulted in reconfiguration of supply chains, unilateralism and regional trade agreements with different rules and standards, sanctions and export border controls, as well as trade restrictions and tariffs. All lead to businesses facing a fragmented, complex and high-risk international trade landscape which, in the short term, is certainly more onerous,” Cronin says.
Viewing regulation as a way to drive innovation, and compete, can help.
“Those that excel in this space have moved away from ‘tick-box compliance’ as this is costly and a real burden for organisations,” says Cronin.
“Their approach is different; they want to be lean and therefore are forced to be both innovative and really understand the risks and spirit of the regulation and how it can add true value to their business. The leadership in these organisations are learning from the mistakes of the past and no longer accept a pure compliance approach, they are using regulation as a catalyst for change, looking to their teams to innovate, understand and manage their most critical risks rather than blindly complying with a regulation.”
Cronin points to the way ESG regulation forced many manufacturing and utility firms to innovate how they manufacture their products and bring them to market as a case in point.
“Many organisations are discovering that a technology-enabled method to map critical components delivers unparalleled transparency and drives smarter decisions,” she says.
The benefits are compelling, “with sharper priorities, faster recovery, and confident delivery even under pressure.
“Ultimately, compliance with regulation should be an outcome and not a guide as to how to run your business. Where cost outweighs the benefits, leadership teams need to strongly push for better, more innovative risk management while ultimately achieving their strategic objectives.”
The rapidly shifting global trading environment has already led to unprecedented changes in regulations in just a short space of time and this is likely to continue for several years, says Florian Plass, EY Ireland’s business transformation partner.
“In response, organisations operating across borders need to interpret and respond to new standards quickly, making compliance not just a requirement but a strategic capability,” he says.
The EY Ireland Geostrategic Outlook for 2026 highlights three specific forces that will shape the trade environment in 2026.
These include the advent of new rules and norms as states intervene more directly in markets; the geopolitics of scarcity in relation to energy, water and critical minerals; and the rise of regional spheres of engagement, with North America, Europe, AsiaPacific and the Middle East each setting their own standards.
“For internationally trading Irish firms, that means multilayered compliance as tariffs, export controls and technology sovereignty measures proliferate, particularly around data and AI,” Plass says.
Rather than viewing all this fresh compliance need as a constraint, the most innovative organisations will use regulatory change as a catalyst for meaningful and sustainable transformation, he says.
“This starts with embedding innovation and technology into how regulatory requirements are anticipated, interpreted and delivered. It involves creating proactive scanning of regulatory horizons, applying standardised processes for impact assessment, and ensuring early mobilisation of largescale transformations,” advises Plass.
“When organisations build these capabilities into their culture, compliance shifts from a perceived burden into a source of long-term competitive strength.”
