By Dr. Judith Jacob
Director of Geopolitical Intelligence

With the world leaving behind the worst of the coronavirus pandemic and with inflation rates falling, there is cautious optimism that 2024 will be less volatile than the last few years. Nevertheless, many governments and institutions have not articulated a clear path forward to tackle major domestic and global issues, choosing instead to bide their time as numerous elections play out and conflicts fester. This lack of leadership and unclear trajectory creates uncertainty for businesses and increases the likelihood that systems and alliances that underpinned the post-war political order will continue to unravel.

Key Risks

1. The Elections That Matter

With over 60 countries and roughly 40% of the global population going to the polls this year, much has been written over the apparent decline in the quality of democratic institutions, the use of repressive tactics by incumbents, and the geopolitical and economic impact of these votes. Some of these concerns are valid, but in many cases the outcome of these elections is fairly certain (India, Russia) or unlikely to result in substantive policy change (Indonesia, Mexico, UK).

Conversely, the two polls that will yield results of significant geopolitical consequence will be the European Parliament election (6-9 June) and the US presidential vote (5 November). Electoral success for far-right EU parties and for Donald Trump will undoubtedly lower Western support for Ukraine’s efforts to sustain its defence against Russia. A Trump victory in particular would see the likely weakening of US-led security infrastructure through further threats to withdraw from NATO, the imposition of more tariffs on trade from allies and foes alike, and a rollback of environmental commitments domestically and internationally.

2. Maritime Shipping Vulnerabilities

The ongoing diversion of commercial vessels around the Cape of Good Hope following Houthi rebel attacks in the Red Sea underscores the vulnerabilities of global maritime supply chains. While the attacks – and retaliatory efforts by the US and its allies – will not halt shipping entirely, they will cause delays and raise the costs of fuel and deliveries, with the impact being felt at least throughout the first half of 2024.

Even in the unlikely event that the situation in the Red Sea is resolved quickly, maritime trade remains vulnerable to diversions and closures in other areas. Low levels of rainfall exacerbated by the El Niño phenomenon and climate change will continue to slow the passage of ships through the Panama Canal for at least the next six months, if not longer. The congestion at the waterway will again raise freight costs as operators charge more due to wait times or opt to use longer routes.

In addition to these issues, China’s assertive naval manoeuvres in the South China Sea also raises the likelihood of diversions for commercial vessels in these waters. Frequent skirmishes and standoffs between the Chinese and other regional navies, like the Philippines, will probably result in sporadic operational disruption to commercial shipping. Vessels are forced to reroute from contested areas or obstructions by naval patrols, aircraft carrier deployments, and military exercises by China or US and its allies.

3. US-China Competition & Technology Regulation

Led by the United States, we expect there to be further restrictions placed by Western nations on China’s technology sector – specifically the expansion of export controls and regulations to include areas like quantum computing, satellites, bioengineering, as well as further curbs on equipment related to the creation of high-end semiconductors and chips used for training artificial intelligence (AI) models. These efforts will hamper longer term Chinese technology advancements, particularly its national security and defence capabilities.

For its part, China will likely introduce further incentives and stimulus packages for local firms to increase production to continue its bid for self-sufficiency in these areas. Additionally, it will probably enact some light restrictions on key rare earth minerals, slowing renewable technology and defence production in the West.

Collectively, the measures and ongoing US-China competition are likely to benefit a host of South and Southeast Asian countries, like India, Malaysia, and Vietnam as companies invest in alternative sources of supplies to reduce their dependence on Chinese manufacturing.

4. Climate Extremes Diminishing Infrastructure Resilience

With 2024 likely to be even warmer than 2023 – already the hottest year on record – extreme weather events like wildfires, heatwaves, droughts, and flooding will almost certainly occur with greater frequency and intensity. These impacts of climate change are well documented but in 2024, we forecast that years of these extreme climate events are highly likely to take an even greater toll on infrastructure, particularly in less developed economies.

Protracted droughts will undoubtedly hamper electricity supply – largely driven by hydropower – and food production in East and Southern African countries. Additionally, widespread wildfires in Canada and southern European nations will cause widespread destruction of buildings, roads, and crops, among other issues.

These increasingly frequent events – compounded by a lack of state capacity to respond in many cases – will see disruptions to supply chains, increasing production and food costs, and thus raising the likelihood of anti-government demonstrations and intercommunal competition for limited resources. Climate activists are also likely to continue to employ creative and disruptive strategies to stymie operations of firms believed to be directly causing or at least profiting from these climate extremes.

5. Export Controls & Economic Security

The outbreak of conflict in Ukraine, increasing US-China competition, and the global coronavirus pandemic have been big events driving concerns in governments about the need to maintain higher levels of self-sufficiency. We believe that states are highly likely to maintain this outlook in 2024, thus adopting stronger policies to achieve economic security.

We are thus likely to see governments like Peru and Indonesia enact further export control measures on minerals. Others like Vietnam and Thailand will threaten to limit sales of key food commodities, such as rice, to gain advantage in trade negotiations or disputes with neighbouring states.

Likewise, it is probable that more nations will deem more sectors critical to their economies as strategic. This will result in the enactment of a range of measures including exerting informal pressure to discourage foreign ownership, the introduction of greater legal regulations, and the promulgation of industrial policies and stimulus packages to prop up domestic industry.


By Heemin Yang

New York’s banks have more work to do. The Department of Financial Services (DFS) has issued a final guidance emphasizing the need for regular and rigorous character and fitness assessments of key personnel in banks and non-depository financial institutions. This guidance underscores the growing importance of due diligence in the financial sector.

The newly outlined comprehensive evaluation required of these financial institutions targets individuals who occupy critical roles such as executives and those with significant influence over key operations. At the core of this guidance is the recognition that the people steering financial entities play a crucial role in determining the sector’s health and resilience.

By instituting a systematic vetting process, DFS seeks to mitigate the risks associated with individuals who may lack the ethical fortitude or integrity required to navigate the complexities of the industry. The move also aligns with the evolving expectations of stakeholders who increasingly demand transparency, accountability, and ethical leadership within the financial industry.

The required regularity and rigor in the vetting process signals a departure from one-time assessments, emphasizing an ongoing commitment to monitoring and reassessing key personnel throughout their tenures. A box-checking exercise would no longer suffice as the guidance calls for a more robust and comprehensive investigation of potential misconduct, conflicts of interest, and lapses in ethical judgment.

DFS’s move raises practical challenges for regulated institutions. Implementing thorough character and fitness assessments requires dedicated resources, sophisticated methodologies, and attentiveness to continued monitoring.

During and shortly after the pandemic, when there was heavy competition for attractive employees, institutions tended to rely less on thorough background checks. As financial institutions navigate this new landscape, they have an opportunity to redefine success by strengthening their due diligence process and identifying potential risks before they cause irreversible harm.

To support banks in this new regulatory environment, Forward Risk has introduced Directors and Officers Due Diligence Services (DODDS) to support banks which have been required by DFS to conduct enhanced background checks of their directors and key officers.

Staffed with researchers and investigators with years of experience in investigative due diligence and in providing services to the full range of financial institution clients, DODDS will provide upgraded background checks at the point of onboarding and thereafter, as now required by DFS.

DODDS will provide intelligence from all data sources in the public domain including traditional media, social media, litigation records, financial distress indicators, assets, regulatory sanctions and the dark web.

With their vast due diligence experience, the DODDS team can examine a bank’s existing Process for background checks and recommend changes to satisfy the new requirements.

Forward Risk Co-Founder Brendan Foo, who will lead the practice, noted that “Forward Risk is acclaimed for its creative investigations of directors and senior officers. This past year we conducted intense background checks on some 100 proposed and serving directors and officers, often in proxy contests. Our team’s expertise will help banks not only satisfy their regulatory requirements but also reduce their risk of fraud and other reputational embarrassments.”

Ernest Brod, Forward Risk’s Deputy Chairman, who has overseen some 10,000 due diligence assignments in his three-decade career, advises companies to repeat their background checks of directors and key officers at scheduled intervals during the period of their relationship. Last year, Mr. Brod told the Wall Street Journal, “companies think, ‘Well we’ve done our due diligence—we did that when we hired people’ meanwhile, time goes on and things change…so it’s really useful to go back and make sure that everything is OK with the people that you’re working with.” Mr. Brod will provide oversight for DODDS.