More than one in three Irish financial organisations, or 36%, say the softening of US data privacy and cybersecurity rules represents the greatest compliance risk to their business, according to a survey from the Compliance Institute.
A further one in four, or 23%, cite US President Donald Trump's tariffs and trade restrictions as the most significant threat to their operations, it said.
The findings were contained in the latest survey from the Compliance Institute, whch is Ireland’s professional body for compliance professionals.
Around 110 compliance experts, working predominantly in the financial services sector, were surveyed as part of the research.
The study also found that 15% of the respondents point to the rollback of environmental, social and governance regulations as their top concern.
The survey aimed to understand the key regulatory risks facing Irish financial institutions, particularly in light of recent developments in US policy.
"We've seen a roll-back in the States on various regulatory fronts - for example reduced funding of various agencies, a freeze on all new regulations, a certain loosening in cybersecurity and anti-money laundering, a loosening of some of those laws, a dismantling of certain parts of legislation," said Michael Kavanagh, chief executive of The Compliance Institute. "On the data privacy front, there's uncertainty - each state has its own laws and regulations, there was going to be a federal law to bring these together, there's uncertainty around that.
"So all of these are leading to uncertainties in the compliance field."
He said the step-back around cybersecurity is particularly concerning because of the knock-on effect it could have on business, even those with no operations in the US.
"Cybercriminals operate in various jurisdictions, there's no borders, there's no boundaries, so it needs a global response," he said. "If there's a weakening in one jurisdiction, and such a jurisdiction being the US which is one of the major players internationally, that is a concern. "
In some cases the easing of restrictions in the US is being coupled with a push for companies to abandon standards altogether - particularly in areas like enviromental, social and governance. This is creating a challenge for companies that may be stuck between legal requirements in the EU and political pressure in the US.
"The challenge around all of that is trying to get data, trying to get information, the culture that's coming from some of the US firms, some have very publicly scaled back on their DE&I targets, and again that is proving problematic for compliance professionals, and companies in general," he said.
But the scaling back of regulation is not just coming from the US - there has also been an easing in rules at a European level - and a reduction in the scope of some legislation.
Some business groups and companies have complained about being over-burdened by regulation in recent years, so some reversal in that area could be welcome. However Mr Kavanagh said it was important that regulation was predictable and balanced.
"In quarter one of this year saw a huge amount of laws and regulations," he said. "The profession was telling me they were almost overwhelmed by the amount of regulation that's there.
"But it's about getting that balance right, going to the other extreme is going back to light touch regulation, and all of the problems that led to in the past."
The Compliance Institute survey also found that 18% of financial organisations believe none of the US policy changes currently pose a compliance threat to their business operations.
Mr Kavanagh said that findings may reflect the fact that a cohort of financial service businesses in Ireland have no dealings with the US.
