The Head of Risk and Compliance at a leading UK asset securities management firm didn’t mince words when asked about the growing synergy between geopolitics and financial stability.
“The challenge,” he told CeFPro’s Risk Evolve conference, “is distinguishing between structural and long-term strategic shifts and what is simply noise.”
For the senior executive, this distinction is now central to managing risk. As wars, elections, sanctions, and trade realignments ripple through global markets, the line between political turbulence and financial exposure has blurred.
The result, he said, is that risk managers can no longer afford to treat geopolitics as an abstract backdrop - it must be built into the firm’s framework for decision-making.
Speaking alongside peers from banking and insurance at a recent industry forum, the CRO noted that deregulation trends have added yet another layer of complexity.
“Just because a rule is rolled back doesn’t mean the risk goes away,” he said. “It’s not ‘Liberation Day’. You still need governance, internal checks, and frameworks to protect your balance sheet.”
The executive warned that a decade of heavy regulatory layering following the 2008 financial crisis had left institutions emotionally attached to their safeguards.
Stripping back frameworks now, he said, is “a very difficult thing if you’ve spent most of your career building them.”
But he warned that ignoring change can be equally dangerous: “If your CEO reads in the press that rules are being ripped up and asks why you’re still doing all this, you need a clear, current answer. Staying relevant is the point.”
For risk teams, that means moving away from compliance-led thinking and toward strategic foresight.
“Geopolitical strategy is about timing,” the expert said. “You have to know when a shift is structural - like a policy realignment that lasts decades - versus when it’s a short-term reaction to headlines.”
That pragmatism extends to measurement. Traditional models, he argued, fall short when quantifying complex, fast-moving risks.
Instead, he advocates combining scenario analysis with “war gaming” - borrowing a concept from military planning to test organizational responses to crises before they occur.
“If you’re trying to plan while the information is still rolling in, you’ve already lost time,” he told the conference. “You need to have the plans in place, ready to pull out when a situation arises.”
