Getting Real About Geopolitical Risk

A new wave of cyberattacks is a fresh reminder that geopolitical risk isn’t an abstract concept for banks—it’s an immediate and evolving challenge. In recent days, for example, a pro-Russian hacker group claimed responsibility for launching cyberattacks against major Italian financial institutions, reportedly in retaliation for comments made by Italy’s president. 

Such cyber threats are just one piece of a much bigger puzzle. Geopolitical tensions can manifest in many ways that affect bank risk—through supply chain disruptions, economic instability, regulatory uncertainty, and shifting global alliances. Put simply, risk expert Joe Iraci wrote last year in The RMA Journal, “events half a world away can hit home.”  No bank, regardless of size, Iraci emphasized, can afford to overlook geopolitical risk. 

Here are some examples of how institutions can manage it:   

• Monitor geopolitical indicators. Keep a close watch on global tensions, trade disputes, and regulatory shifts. As Barnaby Fletcher of Control Risks noted in The RMA Journal, banks should track developments in U.S.-China relations and conflicts like the war in Ukraine, as rising tensions can lead to increased cyber activity and regulatory action. 

• Plan for multiple scenarios. “It’s not about predicting [the future]—it’s about being prepared for possibilities and having a plan to respond,” Massimo Cutuli, CRO at Optiver U.S., said. For example, how would your bank’s credit portfolio be affected by a sudden oil price spike triggered by sanctions or conflict? 

• Strengthen crisis response. “The best way you can manage a crisis is to have your contingency planning in place beforehand,” Control Risks’ Roberta Brzezinski said. Banks should stress-test their response frameworks and ensure clear lines of communication for rapid decision-making. 

Want deeper insights? Join Fletcher, Brzezinski, and Iraci for an RMA Risk Readiness Webcast on March 13, where they’ll break down the biggest geopolitical risks for banks in 2025 and share actionable strategies. 

Register now to stay ahead of these evolving threats.