Seerist is the only augmented analytics solution for threat and risk intelligence professionals. Our intelligence team works with regional field ops who know every corner of the . Complying with anti-money laundering and anti-bribery and corruption regulations. For American bank executives, there needs to be a shift in mindset to the continued growth and stability of American enterprises abroad, says Heldman. Our global multidisciplinary teams offer strategic legal and regulatory advice to help . "fade": true, As weve seen, informal functional networks throughout organizations can enable the rapid sharing of data and improve the identification and mitigation of geopolitical risks. Odyssey is a geopolitical consultancy trained to assist you in understanding sensitive geopolitical issues. The bank also attributed $120 million of a $524 million trading loss during the first quarter to its role as one of the counterparties in a short trade by Chinese metals group Tsingshan that went south amid the market turmoil that followed the outbreak of war. The Position . Strategic and risk management decisions are developed to understand clearly your next geopolitical move to identify both hazards and prospects. 1 "autoplaySpeed":8000 JPMorgan said it had provisioned roughly $300 million to cover markdowns on its Russian loans. To enhance the role of geopolitical risk management and thus create tangible business opportunities, leaders should take the following steps: In every risk there is also an opportunity is a well-worn adage. The Geopolitical Analyst (remote) will work closely with our teams to support research and analytical duty upon clients' needs. Global Trends 2040: A more contested world, US National Intelligence Council, March 2021, dni.gov. Krolls geopolitical risk report informed the client of the regulatory and business environment in the country and the particular city, the level of corruption in the private and public sectors and identified potential cultural and societal issues that may have impacted the clients human operations. Expropriation Today, the company has offices in New York, Washington, and London, as well as a network of experts and resources around the world. Coco Feng, Chinese president Xi Jinping seeks to rally countrys scientists for unprecedented contest, South China Morning Post, May 29, 2021, scmp.com. We believe that political science, sector/country expertise, and macroeconomics can be utilized to guide clients through volatile markets and build future value. In a global business environment characterized both by hypercompetition and intensifying geopolitical headwinds, it is no longer enough for companies with global footprints to only react defensively. Violence and Civil Unrest 1. Stakeholder and Influence Mapping Integrate geopolitical signals and risk assessment into strategic-planning processes and define actionable strategies to both protect the business and take advantage of emerging opportunities. It becomes even more complicated when global events such as pandemics, cyberattacks, geopolitical upheavals, or supply . Geopolitical risk, however, is unlike credit, liquidity, or counterparty default risk. Please feel free contact with us if you have any further questions or concerns, Level 1, 102 Bennelong Parkway, Instead, they depend on personnel from government relations, strategy, and other business functions to identify and mitigate risks, with one function coordinating and consolidating input. The benefits of using geopolitical intelligence services are numerous, but the most significant include staying ahead of the pack, improving business operations, and ensuring business continuity, and protecting staff while abroad. All rights reserved. /en/insights/publications/compliance-risk/companies-respond-geopolitical-risk, /-/media/kroll/images/publications/featured-images/2019/geopolitical-risk.jpg?extension=webp, Detail political uncertainty in view of elections or regime change, Identify discriminatory government actions restricting business operations, Highlight control mechanisms affecting foreign investors such as barriers of entry, regulatory changes or limits to foreign direct investment, Assess levels of corruption in the public and private sectors and the judiciary, Evaluate foreign relations with neighbors, competitors, trade partners and the international community. Our privacy policy describes how your data will be processed. Norwegian Risk Consulting International - NRCI - is a geopolitical risk consultancy founded in 2010. Managing geopolitical risk. Andrew Cuomo, Governor (NY) Bill & Melinda Gates Foundation. 2 When companies consider opportunities in emerging or volatile markets whether through acquisition, merger or growth it is essential for them to understand the potential impact that geopolitical events can have on their business activities. One energy company, for example, established a country chair position, which is typically assigned to the most senior business executive in a given country and is seen as a prestigious step toward advancement to top management. The negative effects of climate change and progressively severe and frequent extreme weather events are becoming harder to ignore. Improve your understanding and modeling of country and economic risk across countries and sectors. Work with us to identify the organizations and individuals with influence and decision-making power critical to your business success, Integrity Due Diligence & Integrity Consulting Quantifying return on advocacy is difficult, however. We evaluated their organizations approaches along three dimensions: the strategic role of geopolitical risk management within the company, the ways in which different parts of the organization are leveraged, and the use of risk management processes and tools. the dynamics of geopolitical risk the complex interactions of multiple actors (both state and non-state) that develop either slowly or rapidly across international borders and markets. The threat to US dominance and the potential development of what some describe as a bipolar global order, pitting the West against China and Russia, is a risk worrying American policymakers as well. Otherwise, internal fissures can build and burst in a way that damages culture, reputation, and performance. Regulatory Burdens Financial risks have probably never been more acute. Our methodology allows us to assess differences in operating models and the degree of process maturity relative to industry practices as well as to identify opportunities for improvement. Any investment in taxable fixed-income securities is subject to certain risks, including credit risk, interest-rate risk, foreign risk, and currency risk. Risk entrepreneurs also take a holistic approach to geopolitical risk management, but they do so in a less structured and centralized way. Managing volatility requires an understanding of the impact on business, customers and environment. Unfortunately, geopolitical risk commonly is misunderstood by the Companies may want to gather internal and external perspectives before deciding what to include in market compacts. 5. The businesss board can apply a materiality test to pinpoint what it should dedicate time to discussing. Goldman Sachs, meanwhile, which in February disclosed that its Russian exposure was $650 million, said it had suffered a net loss of about $300 million on investments in Russia and Ukraine. ), policy decisions (limits to foreign direct investment, tolerance of corrupt elites, etc.) Geopolitical risk assessments should be tailored to focus on relevant industries and customized to target specific concerns depending on the type of investment, expansion or partnership. Instead, it alleviated the concerns by moving aggressively to open more data centers in customers home countrieswith no negative effect. Geopolitical Intelligence Group: Staying Ahead with Intelligence Servicesit. The Chertoff Group leverages this broad and deep expertise . Reputational risk could be amplified if any or all of these risks are not mitigated properly. Andrew Grant is a senior partner in McKinseys Auckland office; Ziad Haider, based in the Singapore office, is the head of geopolitical risk and a director of risk in Asia; and Alastair Levy, based in the London office, is the global director of risk. Geopolitical Intelligence Group is a leading geopolitical risk management advisory firm. Sophisticated geopolitical risk management can also help investors identify arbitrage opportunities. Geopolitical risks affecting banks or banks customers have expanded significantly in recent years, according to a global survey report issued late last year from consulting firm EY. Case Study 3 For decades, companies built their . According to the World Economic Forum in its 2023 Global . MAX's Geopolitical Intelligence Services knows your part of the world because we're part of it too. This combination of short-term and long-term monitoring allows for timely action. One short-term action that a company can take is establishing a crisis-response unit to take the lead on identifying potential risks and developing mitigation strategies. Creating risk management strategies through deep industry expertise, advanced analytics, and specialist global knowledge to help you optimize your business. trust us to help them make informed decisions, Professional services According to the report, no single locale is likely to dominate all regions or domains, and a broader range of actors will compete to advance their ideologies, goals, and interests.. The geopolitical landscape is shifting rapidly and creates multi-dimensional challenges for global organisations. To ingrain the importance of external relations throughout their organizations, some companies rotate high performers and potential candidates for upper management into country leadership positions, where risk management becomes one of their duties. Supporting corporate third-party management programs to drive risk-based due diligence decisions. These organizations take many forms. You may share a link to this page on any of the sites listed below. Even leading global companies within the same industry can differ sharply, depending on their corporate cultures and geopolitical risk appetites. In this context, the word investment can refer to anything from purchasing shares of a company to trying to sell . . One stream is to work for consultancies - i.e. For many companies, the strategic competition between China and the United States will top the list of standing risk issues to discuss. Nearly half of bank CROs (48%) plan to broaden methods for identifying new or emerging political risks and a quarter plan to build new tools for qualitative tracking and reporting on political risk measures.. Andrew S. Grove, Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company, New York, NY: Currency, 1996. This sentiment largely continued in the second . Economic and Geopolitical scenarios As part of long-term planning, a company can conduct exercises to assess its response to game-changing scenarios. Sometimes, the payoff is simply that the company can continue doing business as usual. For banks, with varying degrees of exposure to Russia, the costs of their miscalculation have been sizable, but most say that their losses are manageable. Short of outright expropriation, governments can discriminate against foreign firms by imposing stringent regulatory requirements, limiting foreign direct investment and allowing domestic industry monopolies to form. The decoupling of the US-Chinese tech sector is already disrupting bilateral flows of technology, talent, and investment. Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. ByClint Follette,Marc Gilbert,Ilshat Haris,Michael McAdoo, andPattabi Seshadri. Risk Consulting. Yet, companies find Geopolitical Risk difficult to fully understand and even more challenging to manage. Our operational and strategic advisory services inform our clients with valuable . In the next two decades, competition for global influence is likely to reach its highest level since the Cold War. 4 Major geopolitical events can often arise quickly and unpredictably. They then proactively address the emerging threat to gain competitive advantage. Thats one finding from the US National Intelligence Councils report Global Trends 2040: A more contested world. Banks are used to quantifying risks that can be measured, with long, historical data series serving as inputs to create future scenarios. Note: Political risk consulting firms specializing in analyzing the business risk presented by the political environment in a region or country--including but not limited to regulatory risk in particular sectors, risks of appropriation or nationalization, and broader geopolitical risks. The firm's new geopolitical advisory team is being launched as multinational corporations grapple with volatile events around the world, from Russia's invasion of Ukraine to simmering tensions. As inputs to create future scenarios ) Bill & amp ; Melinda Gates Foundation to manage deep expertise. Landscape is shifting rapidly and creates multi-dimensional challenges for global influence is to... Becomes even more complicated when global events such as pandemics, cyberattacks, upheavals... Team works with regional field ops who know every corner of the US-Chinese tech is. Study 3 for decades, companies find geopolitical risk, however, is unlike credit liquidity... 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