2024 is also election year in the USA — a precursor and catalyst of many world events, cyber threats, and disinformation campaigns.

Geopolitical risks, inflation, political uncertainty from the 2024 US Presidential Election and cyber risk are predicted to be the most significant threats to the financial services industry in 2024, according to an annual risk barometer survey.

This is the second year in a row that geopolitical risk has been ranked by respondents as the top risk (81%), although last year it garnered only 68% for the title. 

Inflation was identified as the second most significant risk to the financial services industry, with 55% of respondents naming it as a top threat. This is a decrease from the 61% of 2022.

Due to the Presidential election in the USA, 51% of respondents ranked the event as a top risk. This was followed by cyber risks, ranked by 50% of respondents for 2024. This genre has been identified as a top-five risk to the industry every year since the survey’s inception in 2013.

Finally, in addition to these areas, concerns around commercial real estate came through loudly in the responses, with many respondents noting low occupancy rates and post-COVID location strategies as key drivers of this growing area of risk around the world.

According to Timothy Cuddihy, Managing Director and Group Chief Risk Officer, DTCC, the firm commissioning and offering the risk barometer survey results: “The notable and sustained rise in concerns around geopolitical risks can be directly attributed to the uncertainty created by the uptick in international tensions and conflicts. Firms must regularly review and evolve their risk management practices as the risk landscape shifts, by conducting scenario planning exercises, implementing new, modernized recovery and resilience capabilities, and continuing to train their employees on the threat landscape.”

By identifying the top risks to the financial markets for the coming year, the firm hopes the increased global dialog on the potential impact to financial stability will provide preemptive insights and guidance to leaders.