Top five risks for financial institutions in 2025

With 2024 behind us, we now turn our attention to the risks that 2025 brings for financial institutions. In 2025, the industry will face a shifting regulatory environment, increased geopolitical tensions, rapid technological adoption and potential consolidation. While this backdrop may seem familiar, the dynamic landscape of 2025 will present a unique mix of optimism and challenges. In this article, we explore the top five risks facing financial institutions in 2025.

• Uncertain regulatory landscape: Unclear priorities and evolving rules create compliance challenges. Financial institutions must stay compliant with a changing regulatory framework.
• Increased financial risk-taking: With fewer regulatory constraints, there is potential for increased financial risk-taking, which could lead to financial instability.
• Higher incidence of fraud and financial crime: Reduced oversight may result in a higher incidence of fraud and financial crime.
• Erosion of consumer trust: Weaker consumer protections can erode trust from customers and lead to increased consumer litigation.

Continue to stay ready in 2025

In 2025, financial institutions face a complex and dynamic risk landscape, marked by transition and uncertainty. By understanding and addressing the top risks of regulatory shifts, cybersecurity, new technology, economic uncertainty and geopolitical tensions, organizations can enhance their resilience and adaptability. Proactive risk management, continuous monitoring and strategic planning are essential to navigate these challenges. Organizations that remain vigilant and flexible will be better positioned to seize opportunities and maintain stability amid uncertainty.

Insurance and risk financing solutions, along with advanced analytics, are crucial components of a robust risk management strategy. In the evolving landscape of 2025, it is critical to conduct thorough risk profile assessments and coverage gap analyses, identify new exposures, review the breadth and interconnectedness of insurance programs and evaluate insurance limits to safeguard financial resilience.

For more information on how to manage your organization’s risks in 2025, reach out to a WTW colleague or contact us here.

Footnotes

1. “Rolling through the Shift – 10 key regulatory challenges organizations will face in 2025”, KPMG, accessed February 26, 2025, Rolling through the Shift - 10 key regulatory challenges organizations will face in 2025 Return to article
2. U.S. President, Proclamation, “Unleashing Prosperity Through Deregulation,” Federal Register 90, no. 24 (February 6, 2025): 14192, Unleashing Prosperity Through Deregulation Return to article
3. “Fact Sheet: President Donald J. Trump Launches Massive 10-To-1 Deregulation Initiative”, The White House, accessed February 26, 2025, Fact Sheet: President Donald J. Trump Launches Massive 10-to-1 Deregulation Initiative Return to article
4. “Emerging and interconnected risks survey: Navigating a complex risk landscape”, WTW, accessed February 26, 2025, Emerging and interconnected risks survey: Navigating a complex risk landscape Return to article
5. “CRE Still Extending and Pretending as Modifications Hit $19B”, CRE Daily, accessed February 26, 2025, CRE Still Extending and Pretending as Modifications Hit $19B Return to article