By Marion Leslie, Head of Financial Information, Executive Board Member, SIX.
For as long as anyone in the industry can remember, sanctions in financial instruments representing holdings in sanctioned legal entities have been treated as a very specialist concern. They sat with compliance teams and were largely invisible to day-to-day market activity. The issue is this model no longer reflects reality of today’s unpredictable geopolitical world.
Over the past few years, sanctions have expanded in scale, speed, and complexity. The number of sanctioned securities has increased severalfold since early 2022, and lists now change frequently, sometimes with immediate market impact (Source: SSMS). What was once a legal backstop has become an operational variable that affects trading, portfolio construction, and product design in real time.Research from our Future of Finance 2025/26 study, based on responses from 291 financial institutions globally, shows just how widely this shift is being felt. Every senior executive surveyed expects developments in the sanctions environment to create operational challenges. More than half say they fully expect those challenges to materially affect their organisations, rather than simply posing a future risk. That distinction matters because it suggests the industry no longer views sanctions as an occasional disruption, but a permanent feature.
What is striking is where the pressure is showing up. During a period of tariff-driven market volatility last year, every firm surveyed experienced data-related issues. Interestingly, there was no single weak point. Problems with data speed, consistency, quality, and volume were all cited at similar levels. This points to something deeper than isolated challenges. It suggests that the underlying data infrastructure many firms rely on was not designed for a world where regulatory and sanctions data have to keep up with a much faster pace to be accurate, aligned and delivered.In the US, speed stood out as the most acute challenge. More than a quarter of respondents said delays in data delivery were their biggest issue during volatile conditions. When markets are moving quickly, even short lags in sanctions or regulatory updates can create uncertainty around what can be traded, held, or issued. That uncertainty does not stay neatly contained within compliance functions. It flows directly into execution quality and risk management.
This helps explain why sanctions data is no longer confined to the middle office. Investment banks are now the most likely to increase spending on regulatory and compliance data over the next three years. That investment reflects the reality that sanctions status increasingly informs front-office decisions, from corporate actions activity to client execution. And it is not just about the sell-side. Asset managers face similar pressures. More than a third expect their largest future data spend increases to be in compliance-related coverage. For funds and ETFs, this has practical implications for exposure monitoring, index inclusion, and rebalancing processes. As sanctions lists expand and evolve more rapidly, operational costs rise and tolerance for data errors falls.
All of this is happening at a time when growth expectations are subdued, particularly in the US. Less than half of firms describe their growth outlook as strong. Yet fewer than half say they are investing in automated settlement and processing. Data complexity is increasing, but infrastructure readiness is lagging behind.
Sanctions compliance has become a data architecture challenge. Firms need systems that can absorb frequent changes, reconcile multiple sources, and distribute trusted information across trading, risk, and operations without delay. The industry broadly agrees that uncertainty is structural as opposed to cyclical. The real test now is whether data and operating models can adapt to that reality. If it cannot, financial institutions may only discover the limits of their systems when the next period of volatility arrives. By then, the cost of finding out is far higher.
Subscribe to our newsletter
