Financial institutions will need to review – and possibly completely overhaul – their internal compliance systems to avoid falling foul of UK regulators once the new Senior Managers Regime is rolled out across the entire finance industry in 2018, a new report warns.

Institutions that fail to develop a consistent, firm-wide approach to governance issues in the light of new rules face "chaos", according to Brian Gregory, Wolters Kluwer Financial Services's London-based Emea vice president for non-financial risk and governance, risk and compliance, writing in a white paper to be published this week.