Regulatory risk encompasses both compliance failures with existing rules and adverse impacts from changing regulatory requirements that affect business models or operations. Financial institutions face particularly complex regulatory landscapes across banking, securities, consumer protection, and anti-money laundering domains. The GDPR implementation in 2018 created significant regulatory risk for companies lacking adequate data protection controls, resulting in substantial fines for violators. Organizations manage regulatory risk through horizon scanning, compliance programs, regulatory relationship management, and adaptive business strategies. Regulatory uncertainty can delay investments or force business model changes.