The regulatory clock is ticking. The EU’s Digital Operational Resilience Act (DORA) is now in force, with financial institutions required to comply from January 2025. Next on the horizon is the EU AI Act, which began phasing in this year and will impose its most stringent obligations by August 2026—reshaping how artificial intelligence is deployed and governed across the EU.
These aren’t minor legal changes; they’re strict, complex requirements that are forcing financial institutions to rethink their risk management and AI strategies.
But the transition to AI sovereignty doesn’t need to be just another compliance burden. With the right approach, banks can turn these regulations into a competitive advantage.
Why AI falters at scale
Banking leaders know that AI is no longer just a tool for efficiency—it can be a driver of differentiation and growth. Yet despite significant investments, most initiatives don’t deliver. Recent analysis from RAND shows that the vast majority of AI projects in financial services fail before reaching production.
Cloud-native vendors can help banks quickly spin up proofs of concept, but when it comes to production-scale deployment—with regulatory sign-off, governance, and integration into complex IT estates—their platforms often fall short.
Even when projects are deployed, it’s often at great cost. Scaling AI workloads can consume vast compute resources, leading to unforeseen expenses that can spiral out of control. For banks facing slowing revenue growth and mounting regulatory pressure, this can turn innovation into a liability.
Meanwhile, AI hyperscalers offer sovereign cloud infrastructure for EU regions, but on their own, they often lack the enterprise-grade governance, resilience, and auditability required in regulated banking environments.
The Teradata edge
To scale AI securely and compliantly in this new regulatory landscape, banks need to combine sovereignty with robust governance and operational resilience. Teradata is uniquely positioned to deliver this exact combination thanks to:
- 40+ years of regulatory trust: Our compliance frameworks are field-tested through decades of collaboration with global banks, auditors, and regulators.
- True hybrid deployment: We provide the flexibility banks need to seamlessly move workloads between cloud and on-premises environments without costly code redevelopment.
- Proven production-scale AI: From model lifecycle management to seamless deployment across banking systems, we make AI work in the real world.
- Enterprise-grade governance: Our platform supports compliance by enabling data lineage, robust access controls, and integration with existing risk management frameworks.
From regulation to growth with Teradata
Teradata provides the foundation banks need to harness the AI opportunity while meeting the EU’s evolving regulatory demands.
With ClearScape Analytics®, banks can scale end-to-end AI/ML pipelines with accountability, security, and cost control.
We’ve deepened our partnerships with AWS, Google Cloud, and Microsoft Azure to support sovereign cloud deployment and hybrid flexibility. Banks can also leverage Teradata VantageCore, a joint solution with Dell Technologies that enables secure scaling across cloud and on-premises environments. For full control over sensitive data, Teradata AI Factory provides a dedicated platform for on-premises AI development that’s purpose-built for regulated industries. Also, through our global security partner, Thales, we provide critical security capabilities to support data sovereignty—helping banks meet the demands of DORA, GDPR, and the AI Act.
It's time to act
Sovereign AI is now an imperative for European banking. Every quarter of delay strengthens competitors and makes compliance more costly. Banks that act now can move beyond regulatory readiness to competitive differentiation, offering customers greater trust, security, and personalized experiences at scale.
Talk to a Teradata representative to learn how we can help your organization turn sovereignty into strategy—and regulation into revenue.