Australian financial services firms are navigating an increasingly complex geopolitical environment.

Zeroing in on four geopolitical megatrends, this report aims to spark conversation among financial leaders, prompting them to consider their risk exposure, resilience, and ability to recognise and seize opportunities.

Geopolitical megatrends impacting Australian financial services firms

Four geopolitical megatrends are impacting the financial services sector in Australia.

Financial leaders are being urged to adapt to the shifting global power balance, manage sensitive social justice issues, pursue cyber innovation while mitigating related risks, and adapt to the changing risk landscape caused by climate change.

Our report unpacks the trends and sheds light on how to navigate them.

1. Global power realignment

Rising economies are calling for a greater say in world affairs and incumbent global powers are attempting to retain their influence.

With the global financial system at risk of fracturing along geopolitical lines, what are the implications for financial services firms?

In our report, we explore what the reshaping of global power means for financial markets, payment systems and FDI flows.

2. The erosion of truth and trust

In many parts of the world, citizens are losing faith in governments and financial institutions – with real and perceived inequality driving societal polarisation. Populist leaders are emerging, taking advantage of the mood of the times.

This report explores the growing criticism of financial services firms and looks at the increasing need for companies to take a stand on social justice issues.

3. The geopolitics of the tech revolution

A ‘tech cold war’ is underway as major global powers race to maintain or increase their relative power through technological supremacy.

What does this mean for cyber security and innovation? How will financial service firms be impacted by global tech decoupling, and how can they manage this challenge?

4. The geopolitics of the climate crisis

When it comes to climate change, differing capacities and economic priorities have led to increased mistrust between industrialised and developing nations.

We explore the challenges and opportunities, including the implications of increased risk disclosure requirements.

How KPMG can help

From identification to mitigation, we can help you prepare for and manage geopolitical volatility. Drawing on the experience of our global network and the insights of the KPMG Australia Geopolitics Hub, we can work with you to develop an end-to-end geopolitical risk management strategy.

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