The 2026 Surveillance Benchmarking Survey & Report from 1LoD, co-sponsored by MCO, contains insights from thousands of conversations with surveillance leaders across the financial services industry. The updated report contains data points and insights designed to help firms benchmark trade, e-comms and voice surveillance processes against industry peers.
The report also describes an industry at an inflection point, under pressure to keep pace with rising regulatory expectations and rapid technological change that is reshaping how institutions approach risk, compliance, and operational oversight, while underlying challenges — particularly around data quality — still remain.
Download the 2026 Surveillance Benchmarking Survey & Report
The survey findings highlight a core concern across firms: surveillance programmes remain heavily constrained by the quality and structure of the data underpinning them.
Respondents consistently identify fragmented data environments and poor data quality as major factors limiting the effectiveness of surveillance systems. As firms move toward more sophisticated capabilities — including holistic surveillance, AI-driven detection, and real-time monitoring — the need for high-quality, integrated data becomes even more critical.
Until firms reduce fragmentation, establish consistent data standards, and improve data quality at the source, these more advanced surveillance objectives will remain difficult to execute effectively in practice.
The technology results from this year's survey suggest that market abuse surveillance may be approaching a genuine inflection point. The past decade has focused on establishing the core infrastructure necessary to meet regulatory expectations for market abuse detection. The coming decade is likely to focus on something more ambitious: transforming surveillance from a compliance monitoring tool into a broader, preventive, and integrated intelligence capability.
The survey data points to four converging dynamics:
Most firms expect increased or sustained investment in surveillance technology over the next 24 months
Key operational bottlenecks are becoming more problematic
Data complexity continues to grow
Adoption of AI is rapidly accelerating
These point to a shift toward more automated and technology-led surveillance on the horizon.
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A structural tension runs through the 2026 survey data — and it sits at the centre of where surveillance programmes are today.
For most banks, current levels of investment are enough to maintain existing programmes. On that basis, some firms are confident their surveillance is “effective enough.” But that confidence is qualified. Satisfaction with trade, voice and e-comms surveillance is partial, and 41% of firms identify budget and resourcing constraints as a highly significant barrier to maintaining or advancing their capabilities.
At the same time, the underlying constraint has not shifted: data remains the limiting factor.
71% of firms point to the same combination of issues — fragmented data across silos, lack of standardised formats and identifiers, and poor or inconsistent data quality — as the primary barrier to surveillance effectiveness. A further 37% highlight limited access to quality data as a significant challenge in its own right.
This matters more as firms look ahead. The next generation of surveillance leveraging AI increases dependence on structured, high-quality data, yet in many firms, the underlying data infrastructure is still not in place and will require significant investment.
Against that backdrop, AI is consistently identified — across both survey data and industry discussions — as the most significant development in surveillance.
The direction of travel is already clear. AI tools can now perform analytical tasks that previously required significant manual effort. Firms remain cautious about relying on outputs without human validation, but the shift in efficiency — particularly in analysing large volumes of data — is material.
For more advanced institutions, this is already embedded in day-to-day workflows. Large language models are being used for narrative generation, investigative support, alert summarisation and contextual analysis of communications.
The next step, increasingly referenced across the industry, is agentic AI.
These systems extend beyond analysis. They can assemble information across datasets, build context around alerts, draft investigative narratives and perform initial validation. In effect, they replicate the first stages of investigative workflows, acting as a digital first line of surveillance analysis.
However, this is where the gap becomes clear.
Fully embedded AI — operating as part of a defined target operating model — remains limited: 8% in e-comms surveillance, 9% in voice, and none in trade or holistic surveillance. The constraint is not just trust in the technology; it is the same structural issue seen elsewhere — data quality, data access and overall operating model maturity.
As AI capability continues to advance, the dependency on robust, integrated data only increases. In many organisations, that foundation is not yet in place, limiting how far these tools can be operationalised.
While AI dominates forward-looking conversations, the day-to-day reality for most surveillance teams remains far more operational — and is still defined by coverage.
Across institutions, the same challenges come up repeatedly: ensuring complete venue coverage, extending communications surveillance across an expanding set of channels, supporting additional languages, and maintaining the integrity of the data feeds that underpin surveillance.
That operational pressure is most visible in communications surveillance. While AI-driven analytics attract attention, many firms are still dealing with the practical challenge of capturing and monitoring an ever-growing number of channels.
Technology has improved monitoring capability, particularly in areas such as AI and voice transcription, but the fundamental requirement has not changed. Firms still need to ensure that every relevant individual, every communication in every material language, and every dimension of trading activity sits within the surveillance perimeter.
Three themes underpin this:
1. Venue and data coverage
Coverage remains complex, particularly in fragmented trading environments. Maintaining consistent coverage requires ongoing monitoring, reconciliation and maintenance — not a one-time implementation.
2. Language coverage
Language requirements continue to expand, driven by both regulatory expectations and advances in monitoring capability. The share of firms covering five or fewer languages has reduced significantly since 2024. In practice, coverage is not a fixed end state, but an ongoing programme that evolves as new risks, channels and geographies emerge.
3. Communications channels
Channel proliferation continues to create operational pressure. 33% of firms now monitor more than 20 channels, up significantly from 2024. Each additional channel introduces complexity — from capture and archiving, to integration with surveillance workflows and validation of data completeness.
Underlying all of this is sustained regulatory pressure.
Interviewees consistently point to ongoing supervisory scrutiny as a primary driver of change — particularly in pushing firms toward broader, more comprehensive coverage of both trading activity and communications.
The FCA’s position is clear. Ten years into MAR, core expectations remain fundamental: granular market abuse risk assessments, surveillance controls mapped to those risks, complete venue inventories, and strong data governance. Firms with unmonitored risks or no credible plan to address gaps remain well short of expectations.
At the same time, the scope of surveillance continues to expand.
Firms are now expected to:
FCA PS25/23 makes the last point clear. Behaviour — including bullying, harassment and inappropriate communications — is now directly linked to the fit and proper test. Culture is no longer just an internal issue; it is a supervisory concern.
The shift is reflected clearly in the data: 89% of firms now use communications surveillance tools to proactively monitor culture, up significantly from the 2024 survey.
Read about optimizing the software selection process for the best outcome.
The 2026 report paints a picture of a surveillance function under pressure to evolve — faster than resources allow, on a data foundation that in many institutions is not yet fit for purpose, and against a regulatory backdrop that continues to widen in scope.
MCO Director of Solution Sales Keith Pyke reminds firms to keep an eye on the big picture of compliance. According to Pyke, “messaging surveillance and retention is just one part of an effective compliance program. Better compliance moves beyond point solutions that surveil communication activities in silos and towards an integrated platform approach that also includes other areas of potential risk including employee trading activities, MNPI and automated watch list monitoring.”
An integrated approach delivers more than just a more comprehensive view of compliance. Using the same compliance framework including data, workflows, questionnaires and attestations provides significant operational efficiencies and increased ease of use for both employees and the compliance team.
Read the white paper Communications Compliance: Stay Ahead of the Curve
In this era of rapid technological advancements and heightened regulatory scrutiny, surveillance practices have become more critical than ever for financial institutions. As the report points out, firms require reassurance that they are covered from a regulatory standpoint.
MCO’s integrated solutions for managing trade and communications surveillance provide that reassurance by directly addressing many of the challenges highlighted in the report, including:
Ready to learn more about how MCO can help your firm improve communications and trade surveillance as part of an integrated compliance technology solution?