Senior Adviser Daniel Trinder shares insights on the evolving role of geopolitical risk in financial services

Building geopolitical risk into strategy earns regulatory trust and long-term strategic advantage. Senior Adviser Daniel Trinder shares insights on the evolving role of geopolitical risk in financial services.  

Tell us about your previous experience 

Until recently, I was an Executive at New Zealand’s Financial Markets Authority (FMA), responsible for strategy, regulatory policy, economic research, data analytics, international relations, and fintech and innovation. I led the FMA’s work in IOSCO, including co-chairing IOSCO’s work on scams and online harms in Asia. I also worked for the International Monetary Fund (IMF) on financial supervision in India and the Philippines. Earlier in his career, I was a senior civil servant at HM Treasury, responsible for European and international financial services during the UK’s EU and G7/8 presidencies and leading strategic financial services dialogues with India and China. 

For much of my career, I have worked in the private sector. Before becoming a gamekeeper at the FMA I led Government Affairs and Policy at Binance, following 15 years in investment banking as Global Head of Government and Regulatory Affairs at Deutsche Bank, Standard Chartered, and Barclays having started my investment banking career at Goldman Sachs focusing on market structure reform. 

I am an economist by training and have studied or held academic roles in Newcastle and London in the UK, Toronto and Sydney. Alongside my work with Flint Global I am a research affiliate at the Cambridge Centre for Alternative Finance (CCAF) at the University of Cambridge and hold an Honorary Professorship in Economics and Finance at Queen Mary University of London. 

How has geopolitical risk evolved from a peripheral consideration in financial regulation to a central pillar of supervisory frameworks? 

Before the global financial crisis (GFC), regulators primarily viewed geopolitical risks through episodic lenses, something that manifested through short-term market volatility. Under capital frameworks, such as Basel II, geopolitics was noted in horizon scans but rarely covered through risk assessments.  

Post-GFC prompted macroprudential shifts, indirectly elevating geopolitics via stress testing and resilience mandates (including Dodd-Frank in the US, and the Financial Stability Board (FSB) G-SIB requirements). Regulators began integrating geopolitics into operational risk frameworks and scenario analysis as a subset of broader uncertainties, such as sovereign debt crises or Brexit. That stance is now being overtaken by events.  

Last month, the European Central Bank (ECB) and the European Systemic Risk Board (ESRC) published a joint report analysing financial stability risks from geoeconomic fragmentation. Building on recent work by the International Monetary Fund (IMF), this latest analysis reinforces that geopolitical risk is no longer peripheral to financial supervision. It is becoming embedded within core regulatory frameworks, reflecting both the increasing frequency and transmission of geopolitical shocks - and the growing recognition among regulators that such risks directly shape markets, financial infrastructure resilience and many of the firms they supervise. 

For boards, the message is clear: geopolitical risk is no longer something to be noted but must be actively managed. 

How do regulators frame geopolitical risk transmission? 

Recent conflicts and intensifying geoeconomic fragmentation have propelled geopolitics to the top tier of supervisory priorities. Many regulators now expect firms to explicitly monitor, assess and stress test geopolitical fragmentation, including through reverse stress testing. Examples include the ECB’s planned 2026 reverse stress test focused on geopolitical risk, alongside exercises by the European Banking Authority (EBA) and the Bank of England (BoE) last year. 

Regulators now probe firms' capacity to endure geopolitical risks, not mere awareness. They are having robust discussions via operational resilience frameworks. Some regulators, like the BoE highlight how geopolitical risks threaten Non-Bank Financial Institutions (NBFI) resilience. 

Supervisors are formalising how geopolitical risk propagates through the financial system. The EBA identifies three core channels - financial markets, political/policy environment, and real economy - that amplify it via uncertainty, contagion, and cross-border spillovers under stress. 

Banks are now being pushed to model scenarios such as sudden sanctions on a major economy, closure of key payment or clearing corridors, sovereign debt restructuring triggered by political conflict, and cyber escalation linked to state actors. 

Across Asia, supervisory attention has centred on sanctions resilience and payments continuity, particularly amid US-China tensions. Regulators across the region have prioritised enhanced sanctions screening for high-risk jurisdictions and contingency planning for alternative payment corridors should access to systems such as SWIFT be disrupted. Both the Monetary Authority of Singapore (MAS) and Hong Kong’s Securities and Futures Commission (SFC) have emphasised crisis simulation exercises addressing capital flow reversals and market dislocation. 

In Australia, the Council of Financial Regulators - comprising APRA, ASIC, the RBA and Treasury - has established a dedicated geopolitical risk work program. This forward-looking initiative is designed to improve system-wide awareness of how geopolitical shocks can impact financial stability and to ensure institutions are better prepared for sudden disruption. 

This focus is not limited to prudential regulators. Securities and conduct regulators have also become more vocal about the risks geopolitical instability poses to market integrity and consumer outcomes. 

ASIC has explicitly linked geopolitical volatility to increased consumer harm - including heightened scam activity, misinformation and mis-selling during periods of market stress. MAS has emphasised fair treatment of investors during sudden market closures or capital controls, as well as product governance where geopolitical risk dominates returns. In the US, the SEC has strengthened expectations around disclosure of material geopolitical risks in public filings. 

Together, these signals reinforce that geopolitical risk cuts across prudential soundness, market integrity and consumer protection. 

What are the implications for boards and financial institutions? How should they address this? 

Stress test for geopolitical risks will have tangible implications for capital, liquidity and resolvability. Banks should expect greater scrutiny of exposed activities, higher buffers where risks are concentrated, closer examination of intra-group funding flows and trapped capital, and sharper questioning around exit strategies from stressed jurisdictions. 

For insurers, the implications extend to claims enforceability, reinsurance recoverability and asset-liability mismatches under severe geopolitical stress. 

Regulators will also, indirectly, challenge certain business models - particularly those reliant on concentrated regional growth, cross-border wholesale funding, yield-seeking in geopolitically sensitive markets, or complex structures without commensurate operational substance. 

Boards will be expected to own this risk, to set jurisdiction-specific risk appetite, oversee credible scenario analysis anchored in plausible geopolitical events, and ensure strategy, capital planning and operating models are aligned. 

Financial institutions that treat this as a compliance exercise will struggle; those that embed it into strategy, structure, and capital planning will earn regulatory trust and lasting strategic advantage. 

In Asia-Pacific, Flint Global is a strategic advisory firm helping businesses and investors navigate political, regulatory, and geopolitical complexity across the region. We combine on-the-ground knowledge, regional expertise, and global insight to help clients manage risk, engage effectively with governments, and make informed commercial decisions that create competitive advantage.

Our work in Asia-Pacific is driven by consultants and industry experts with deep experience in government, policy, and business, actively involved throughout client engagements. On-the-ground advisers work closely with clients, providing senior-level insight, challenge, and judgement, alongside practical expertise in key markets across the region. This ensures clients benefit from both local understanding and connectivity, and a broad regional and global perspective.

Contact our APAC team