Managing todays geopolitical risks

In times of persistent global challenges - from escalating geopolitical tensions to fluctuating economic conditions - financial institutions are confronted with a variety of risks that require deliberate management. To ensure long-term resilience, institutions must understand geopolitical risks and integrate them appropriately into risk management procedures.

KPMG International has published the white paper "Managing Today's Geopolitical Risks: A Guide for Financial Services Institutions" in response to the growing importance of these risks. This guide focuses on effective strategies specific to financial institutions and provides important guidance on how to deal with the complex and uncertain geopolitical environment. It contains the following three core recommendations for a paradigm shift in dealing with geopolitical risks:

1. Geopolitical risk drivers- Simplicity amidst complexity: developing effective risk management strategies requires analyzing and defining the most relevant risk drivers amidst the inherent complexity of geopolitical risks.
2. There is no need to reinvent the wheel: Financial institutions can build on the tools and methods already established in risk management - provided the mindset regarding the management of geopolitical risks changes.
3. The only bad strategy is not to have a strategy: Both the definition of a strategy for dealing with geopolitical risks and its continuous updating and further development are essential for proactive risk management