Navigating the storm: The intersection of geopolitical and financial crime risks

Abstract

The world is facing an incredibly complex set of global risks, from conflict in Europe and the Middle East, to climate change and food and energy insecurity. As we progress into 2024, we are seeing an intensification of recent trends: geopolitical instability is accelerating the use of economic statecraft and asymmetric tools of financial conflict. These tools are used as both alternatives and additions to hard power. This paper argues that risks to global financial institutions are increasingly characterised by this nexus. Against a backdrop of multiplying wars, the geopolitical activities of treasury departments are becoming more pronounced. This paper addresses how some of these financial and economic tools are deployed and the nature of the risks that have emerged as a result, particularly as the targets of economic statecraft seek to counter them. The paper also considers how financial institutions can build resilience in their organisations by situating geopolitics effectively within financial crime compliance frameworks.