The long-standing wall between the technology firms use to comply and the technology regulators use to supervise is coming down, according to CUBE, the regulatory intelligence provider.
In a new analysis, CUBE argues that financial services is moving towards a single, connected regulatory ecosystem in which supervisors and the supervised increasingly depend on the same underlying platforms.
For years, the industry treated RegTech and SupTech as separate categories. CUBE contends that this split was always defined by who owned the tool rather than what it did. That distinction, it says, is now losing its relevance.
The shift is being driven by changing expectations on both sides. Regulated firms are no longer satisfied with passive tools that simply collect regulatory text. CUBE notes they want live, machine-readable views of global obligations, mapped to their operations and backed by a robust audit trail. Regulators want much the same. According to CUBE, 197 financial authorities across 140 countries have now deployed at least one SupTech solution, up from 54 authorities in 2022, with AI, data access and cloud infrastructure seen as the key enablers.
Artificial intelligence is accelerating the convergence. CUBE explains that AI has turned compliance from a periodic, manual task into continuous, real-time interpretation, while moving supervision from reactive, sample-based checks to proactive, evidence-led oversight.
The UK’s Financial Conduct Authority (FCA) is a case in point. Its Mills Review, a global first study into how AI will reshape retail financial services by 2030, called on the regulator to build an “AI-enabled agentic supervisory model” using the same agentic approach as the firms it oversees. The FCA’s AI Live Testing programme reinforces this by treating AI as a system rather than a standalone algorithm.
CUBE highlights that both regulators and firms now demand structured regulatory data, traceability, model governance and continuous monitoring. FCA-commissioned research cited in the Mills Review found around 11 million UK adults are likely to use AI that acts autonomously within pre-set goals, yet trust and control remain their central concern. For CUBE, that trust gap is precisely why traceable regulatory data matters, whether the AI agent sits inside a firm or a supervisor.
Looking ahead, CUBE envisages an “Agent and Human Architecture”, where agents handle data mapping, control tagging and monitoring while humans provide judgement, interpretation and escalation. A knowledgeable human in the loop, it stresses, must be non-negotiable. International coordination is also building, with IOSCO establishing a SupTech Forum in 2026 and the FCA aligning its AI testing approach with the Monetary Authority of Singapore.
There are caveats. CUBE acknowledges that the Mills Review’s recommendations remain advisory rather than policy, and adoption across authorities is uneven, held back by cyber risk, data quality, skills and funding constraints.
Even so, CUBE believes trust and provenance will be the decisive advantage in a converged sector. Firms struggle to trace obligations back to source, while regulators need evidence that obligations are being met market-wide. As CUBE puts it, a regulatory system built from scratch today would look less like a wall and more like a web.
For more insights into the convergence, read the full story here.
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