Regulatory perfect storm brewing in 2026

Regulatory compliance firm Mintegrity has warned that financial services licensees are heading into what might prove to be a ‘perfect storm’ in 2026 as a result of a convergence of reform deadlines and stepped penalty regimes.

Mintegrity chief executive, Amanda Mark said she believes licensees need to treat 2026 readiness as a strategic program, not a tick a box exercise.

“We are heading into the perfect storm driven by three forces,” she said. “First, non-negotiable reform deadlines are landing in quick succession. Major legislative overhauls, most notably AUSTRAC’s AML/CTF rewrite and new privacy obligations, require substantial operational and policy change on fixed timetables.”

“AUSTRAC’s new rules require current reporting entities to have updated, fully operational AML/CTF programs by 31 March 2026.”

“Second, regulators are shifting decisively from guidance to litigation, using expanded civil penalty powers in areas such as cyber resilience, consumer contracts and sustainability claims. Recent greenwashing cases, including significant penalties against well-known firms, underline the scale of exposure for inaccurate or unverified ESG statements.

“Third, regulatory lines are increasingly blurred. A single product or technology decision can attract parallel scrutiny from ASIC, the ACCC and the OAIC, particularly around AI-enabled advice, client data use and ESG-labelled offerings.”

Mark said the strategic challenge is less about any single rule change than the operational load of implementing all of them at once.

“The greatest risk is not misunderstanding one obligation, but failing operationally because time, budget and technology resources are stretched across multiple concurrent reforms,” she said

“Enforcement risk is already immediate. One of the most significant exposures for AFSLs is unfair contract terms.

“Multi-million-dollar penalties now apply and the ACCC has flagged UCT enforcement as a priority. Clauses commonly embedded in advice agreements, such as automatic renewals or restrictive cancellation and termination rights, sit directly in scope. The danger for licensees is scale: a single clause used across an entire client base can trigger per-contract, per-clause penalties that become financially severe. If not already completed, firms should review all client service and advice agreements for UCT compliance and remediate templates quickly,” Mark said.

She noted that greenwashing has also become a high-penalty trap with ASIC and the ACCC treating ESG misrepresentation as top-tier enforcement, and the recent penalty environment showing regulators are focused not on the philosophy of sustainable investing but on verification.