Marios Skandalis: “Compliance is no longer just about adhering to rules”

The compliance landscape of Cyprus has undergone the biggest and most impactful evolution over the last few years.

The economic collapse of 2013 served as a catalyst for this ongoing transformation, positioning compliance at the forefront of strategic decision-making within the Cypriot business community and, for the first time, relevant political decisions were also affected.

In the past, compliance was often seen as a necessary burden, a checklist of regulations to be followed and a series of boxes to be ticked. However, today, we are witnessing the dawn of a new era, where compliance is no longer just about adhering to rules but about setting the stage for sustainable success, ethical growth and resilient innovation.

More importantly, this evolution has extended beyond our profession itself, shaping the broader economy and reputation of our country. Cyprus has not simply followed this evolution but, rather, has set the path over this decade for others to follow and has been globally recognised as one of the key jurisdictions leading this transformation and this branding of the compliance function.

The global compliance industry is becoming much more mature and much more focused on what pre-emptively needs to be done rather than how we react to various incidents. Compliance is evolving into a strategic partner and a trusted advisor that guides us through the myriad challenges of today’s business landscape. It is no longer just about avoiding fines or mitigating risks.

Compliance now plays a pivotal role in unlocking new opportunities, fostering a culture of integrity and strengthening trust with stakeholders. It is about demonstrating to our customers, investors and the general community that we are committed to doing what is right, not just what is required.

2025 is poised to be a pivotal year for the compliance profession, particularly in Europe, with the establishment of the official AML operational framework under the recently launched AML Regulation and the formation of the AML Authority.

This development is expected to bring greater divergence across continents in addressing key international compliance challenges. With the full deployment of this new framework, the EU aspires to be a global leader in the fight against financial crime. Moreover, this will be the year when all compliance professionals will actively and methodically embrace cutting-edge technologies, leveraging artificial intelligence and machine learning to predict and prevent compliance issues before they arise.

We are entering the era in which the compliance profession will set as a priority the automation of routine tasks and challenge the effectiveness and applicability of rigid regulatory requirements, freeing up our talented professionals to focus on strategic initiatives. It is the era of harnessing the power of data analytics to gain valuable insights, make informed decisions and drive continuous improvement.

To mitigate the potential risks associated with these advancements, the EU has proactively taken the right measures, introducing the Artificial Intelligence (AI) Act last August, while compliance for prohibited practices should come into effect this month. While most provisions of the regulation will apply as of August 2026, this year is the one in which the Act will be what companies doing business in the EU and using AI will need to consider, especially if they’re developing or deploying high-stake AI systems.

Over the past few years, organisations have grown significantly more sophisticated in leveraging data analytics and profiling their clients; however, the ethical implication of allowing machines to solely drive corporate decisions remains a pressing question.

Despite the evolving landscape of compliance, one element remains constant and increasingly crucial – our collective commitment to fostering a culture of ethics and integrity. The true measure of compliance success lies in our ability to inspire and engage every member of an organisation to view compliance not as an obstacle but as a gateway to sustainable excellence. For this vision to materialise, corporate leaders must lead by example.

Moving beyond mere rhetoric, they must take tangible, impactful actions that embed ethical values in the very fabric of their organisations. Practical initiatives that promote the right behaviours should not only be encouraged but celebrated and rewarded!

*Marios M. Skandalis, Chair, Cyprus Integrity Forum & Member, Global Advisory Board, International Compliance Association (ICA) UK

This Special Feature first appeared in the February edition of GOLD magazine. Click here to view it.