A study shows they are far more worried about political uncertainties and related market volatility than CROs in other regions are. 

Your average Asia Pacific banking CRO appears to be no friend of Trump 2.0’s efforts to dismantle the postwar political order cum Pax Americana with a battery of executive orders and series of on-off and then on-again tariffs.

At least, that would be one of the main takeaways from the latest EY and Institute of International Finance (IIF) Global Risk Management Survey, which was recently distributed to the media.

Operational Resilience

In the survey, exactly 89 percent, or almost all of APAC bank CROs cited economic uncertainty driven by geopolitics and the related market volatility as a top risk. This was way above the global average of 48 percent.

As a result, more than half are prioritizing operational resilience given the intensifying cyber, data, and technology risks linked to the current environment.

Negative Outcomes

«International affairs are a bigger part of CROs’ jobs because of a broader range of negative outcomes and more significant impacts. They also face considerable uncertainty about how changes in government after the many elections of last year will translate into policy or regulatory shifts,» the survey indicates.

Beyond that, globally systemically relevant banks were more focused on those kinds of risks, with 64 percent of them citing it as one of their top-fives for this year.

No Return

«As much uncertainty as geopolitical turbulence presents today, one thing is increasingly clear from our survey: CROs don’t seem to expect a return to the international stability and economic integration that has been the norm since the 1990s,» the survey stated.

In short, that means their job is going to be a great deal more complicated from here on out, something the survey itself hints at.

Stronger Framework

«In terms of the risk management response, CROs are planning a holistic approach. Enhanced cyber protections, more extensive assessment and scenario planning and stronger compliance frameworks top the list of potential actions to mitigate geopolitical risks in the future,» the survey indicates.

Political assessments are likely to be prioritized to a much greater extent than before, with 82 percent of CROs at globally relevant institutions, 83 percent in Asia Pacific and 86 percent at large banks putting far more emphasis on them than previously.

Methodology and Participants

The survey was conducted between September and November 2024. Interviews were conducted with CROs or senior risk executives, with 115 banks in 45 countries participating. The institutions represented were fairly diverse in terms of asset size, geographic reach, and type. The regional breakdown indicated that 16 percent of respondents were from the Asia Pacific region, 25 percent from Europe, 15 percent from Latin America, 13 percent from the Middle East and Africa and 31 percent from North America. Of the total number of respondents, about 10 percent comprised G-SIBs.