As we head into 2025, asset managers and insurance investment firms face a landscape shaped by evolving regulations and new reporting requirements. We’ll be watching several key factors likely to influence their operations and strategic decisions.
- Investment Data Transparency: There’s growing emphasis on improving transparency in investment data, including ESG, solvency, and the use of AI in investment strategies globally. While regulators may enforce stricter reporting standards, requiring more detailed disclosures of how firms use data in investment decisions, we also expect institutional clients to continue increasing their requirements for transparent data reporting. Firms will need to stay ahead of potential new reporting requirements to incorporate it with existing portfolio holdings reporting to avoid penalties.
- Climate and ESG Disclosures: Climate and ESG disclosure requirements will be a key focus globally. Firms operating across regions must navigate a complex regulatory environment to ensure compliance and maintain transparency on global investment strategies.
In the EU, firms should anticipate increased ESG and sustainability reporting requirements, in line with the European Green Deal and the EU Taxonomy Regulation. Insurers in the EU will need to adapt to new updates expected under the Solvency II framework, particularly relating to environmental, social, and governance (ESG) disclosures and capital requirements.
The SFDR, which requires financial market participants to disclose the sustainability of their investments, is expected to undergo further updates in 2025.
However, the EU Commission is focused on an initiative to drive competitiveness, which may lead to the consolidation of some ESG Reporting requirements.
In Asia, regulatory frameworks for ESG disclosures are evolving rapidly, with some markets also pushing for more robust climate-related financial disclosures.
Meanwhile in the U.S., regardless of political shifts, ESG reporting is expected to remain a key focus of the SEC as well. The SEC’s anticipated move to impose more comprehensive climate-related disclosures will impact both asset managers and insurance firms, requiring them to enhance their ESG data reporting frameworks to meet new standards.
- Data Security and Privacy: With the rise of the use of AI and data-driven investment decisions, the importance of safeguarding sensitive financial data continues to grow. The risks to data security and privacy have been intensifying, with sensitive client information and investment analytics becoming prime targets for cyberattacks. Firms should prepare for stricter global privacy regulations, such as GDPR and evolving U.S. data protection laws, which may create additional compliance challenges for asset managers and insurance firms.
- Regional Reporting Divergence: In an effort to support data-driven investment decisions, individual countries continue to identify opportunities to provide clarification in reporting requirements, or require additional or different reports entirely. This adds continuously evolving layers of complexity for the industry as firms need to define, source, and manage data differently.
Data working groups such as FinDatex and OpenFunds help standardize data reporting, and we expect they will continue to provide clarification to the market via their templates and definitions in 2025.
- Fintech, Crypto, and Payment Efficiency: The rise of fintech will continue to disrupt traditional financial services in 2025. Expect more integration of blockchain technology and digital currencies, as regulators worldwide move toward clearer crypto regulations. In terms of payments, firms will see a significant push for faster, more efficient transactions through innovations such as instant payments and cross-border payment solutions. For asset managers and insurance firms, these developments could streamline operations, reduce costs, and improve client satisfaction, but they also require new compliance strategies to address emerging risks in these rapidly evolving sectors.
In 2025, staying compliant with shifting regulations, enhancing transparency, and preparing for stricter reporting standards will be critical for asset managers and insurance investment firms to stay competitive and avoid regulatory pitfalls across the U.S., EU, and Asia. Additionally, embracing innovations in fintech, crypto, and payment efficiency will be essential for maintaining operational agility in an increasingly digital financial world. We look forward to helping our clients navigate these changes in 2025!
