Although geopolitical risk is not a new phenomenon, it has emerged as one of the most critical risks in the payments industry today. Recently, Jamie Dimon, CEO of J.P. Morgan, referred to geopolitical risk as “the thing that most concerns me”.
Financial institutions and payment companies are not new to the adverse impacts of geopolitical risk. Sanctions and the tools used to enforce them, for example, are but one of the well-established tools used in financial services relating to such risks.
However, the evolution of sanctions and the increasingly complicated manifestation of those sanctions highlight that geopolitical risks are often hidden within our economies. The rules-based approach and manual investigation-based systems that worked in the past are no longer sufficient for identifying and preventing the manifestation of such risks.
In the ever-evolving global political and economic landscape, the intersection of data science and geopolitical risk management has become critical for cross-border payments.
The nuanced and indirect nature of geopolitical and sanctions risk – sanctions circumvention is widely viewed as a critical risk at the moment by both…
