Your Regulatory Team Has No Customer
(10)
Overview
The FSB's AI accountability consultation closes this week — and exposes a question most regulatory functions can't answer: who is this process actually for?
Year
2026
Industry
Capital Markets / Operating Model
Challenge
The Financial Stability Board's consultation on "Sound Practices for the Responsible Adoption of AI" closes for comments this week. Buried in the framework is a familiar ask: firms should be able to explain who is accountable for an AI system's output. Most regulatory teams can't answer that question about their own function, because no one ever asked who the regulatory process serves. That's the real gap. Most regulatory and compliance functions were built to satisfy an external body, not to serve an internal customer. There's no business unit waiting on the output, no P&L line that improves when the process runs faster. So when firms automate it, faster reviews, faster filings, faster sign-offs, nothing downstream changes, because nothing downstream was waiting.
Impact
This is the same operating model failure I keep coming back to: you can't accelerate a process that was never designed around a customer in the first place. Automation doesn't create a customer. It just does the same customer-less work faster, and calls the speed a win. The fix isn't a better AI tool. It's asking, before you automate anything: who consumes this output, and what do they need from it? If the honest answer is "the regulator, and only the regulator," you're not looking for efficiency, you're looking for a different question entirely: is this process even structured to produce insight, or just compliance? Regulation didn't create this problem. It's just the clearest place to see it.