Nearly half (49%) of UK payments executives say regulatory expectations are changing faster than their systems can adapt, while 45% say compliance costs are rising faster than company revenue, according to research from payments reconciliation and reporting platform Kani Payments.The findings suggest the payments industry is entering a new phase of regulatory change, where understanding compliance requirements is no longer the biggest challenge. Instead, firms are increasingly finding the operational infrastructure behind compliance struggling to keep pace with the speed and complexity of modern regulation.The research, which surveyed senior leaders across the UK payments sector, comes just weeks after the Financial Conduct Authority's updated safeguarding regime (PS25/12) came into force, increasing expectations around reconciliation, reporting and operational controls.Aaron Holmes, CEO of Kani Payments, said: "Most firms understand what regulators expect of them. What many are finding is that their systems and processes weren't built to evidence it at the pace regulation now demands."Every new regulation creates a hiring need as much as a technology one. Firms are bringing in compliance specialists to interpret and implement the volume of change, while also investing in the systems to support it. When compliance headcount and infrastructure costs both grow faster than the business itself, that is an operational challenge, not only a compliance one."Compliance is now an operational cost, not just a governance oneEach new wave of regulation adds cost on several fronts at once: specialist compliance hires to interpret it, technology to support it, and stronger reporting processes to evidence it. For many firms, that stack is now rising faster than revenue.The research also highlights where industry leaders believe those pressures are being felt most acutely. When asked to identify their single biggest operational priority for the coming year, respondents repeatedly pointed towards strengthening the systems and processes that underpin compliance, including automating reconciliation, improving safeguarding controls, creating live resolution capabilities and reducing reliance on manual processes and individual expertise.The report builds on Kani's earlier safeguarding research, which examined how prepared firms are for the FCA's updated safeguarding rules. While almost one-third (32%) of firms described themselves as already fully compliant with the new regime, the latest findings suggest many are still building the operational capability needed to demonstrate compliance consistently at scale. Together, the reports describe a sector that understands the direction of regulation but is still closing the gap between confidence and operational readiness.Holmes concluded: "When systems are already struggling to adapt and compliance costs are outpacing revenue, that points to a structural issue. The firms that come through the next few years well will be those that build compliance into how they operate, rather than bolting it on after the fact."The full report, The Confidence Gap, explores how regulatory change, safeguarding reform, AI adoption and modernisation challenges are reshaping operational priorities across the UK payments industry.NoYesPayments07 Jul, 2026