Cyber attacks lead business concerns for 2025 - Weekly roundup: 4 February
by Ben Poole
Cyber attacks lead business concerns for 2025
Cyber incidents - including data breaches, ransomware attacks, and IT disruptions like the CrowdStrike incident - are the biggest worry for companies globally in 2025, according to the Allianz Risk Barometer. Once again, business interruption is also a main concern for companies of all sizes, ranking #2. After another heavy year of natural catastrophes activity in 2024, this peril remains #3, while the impact of a super-election year, rising geopolitical tensions and the potential for trade wars mean that changes in legislation and regulation is a top five risk at #4. The biggest riser this year is climate change, from #7 to #5, achieving its highest-ever position in 14 years of the survey.
Large corporates, mid-size, and smaller businesses all perceive cyber incidents as their #1 business risk. However, there are significant differences in the rest of the ranking. Smaller companies are more concerned about more localised and immediate risks, such as regulatory compliance, macroeconomic developments and skill shortages, but there are also signs that some of the risks that have preoccupied larger companies are now starting to bite smaller firms too, with climate change and political risks and violence climbing the ranking.
Cyber incidents (38% of overall responses) rank as the most important risk globally for the fourth year in a row – and by a higher margin than ever (7% points). It is the top peril in 20 countries, including Argentina, France, Germany, India, South Africa, the UK and the US. More than 60% of respondents identified data breaches as the cyber exposure companies fear most, followed by attacks on critical infrastructure and physical assets with 57%.
Business interruption (BI) has ranked either #1 or #2 in every Allianz Risk Barometer for the past decade and retains its position at #2 in 2025 with 31% of responses. BI is typically a consequence of events like a natural disaster or a cyber-attack, which can affect the ability of a business to operate normally. Several examples from 2024 highlight why companies still see BI as a major threat to their business model. Houthi attacks in the Red Sea led to supply chain disruptions due to the rerouting of container ships, while incidents such as the collapse of the Francis Scott Key Bridge in Baltimore also directly impacted supply chains. Supply chain disruptions with global effects occur approximately every 1.4 years, and the trend is rising, according to analysis from Circular Republic, in collaboration with Allianz and others. Those disruptions cause major economic damages, ranging up to 5% to 10% of product costs and additional downtime impacts.
2024 is expected to have been the hottest year on record. It has also been a year of terrible natural catastrophes with extreme hurricanes and storms in North America, devastating floods in Europe and Asia and drought in Africa and South America. After dropping down the ranking during the pandemic years, as companies had to deal with more immediate challenges, climate change moves up two positions into the top five global risks at #5 in 2025, its highest ever position, while the closely interlinked peril of Natural Catastrophes remains at #3 with 29%, although more respondents also picked this as a top risk year-on-year. For the fifth time in a row in 2024, insured losses surpassed US$100bn.
Around the world, natural catastrophes is the #1 risk in Austria, Croatia, Greece, Hong Kong, Japan, Romania, Slovenia, Spain and Turkey, many of which sustained some of the most significant events of 2024. In Central and Eastern Europe, as well as in Spain, floods had a dramatic impact on people and businesses, while Japan faced a M7.5 earthquake in the Noto Peninsula.
Despite ongoing geopolitical and economic uncertainty in the Middle East, Ukraine and Southeast Asia, Political risks and violence drop one place to #9 year-on-year, albeit with the same share of respondents as 2024 (14%). However, it ranks as a more concerning risk for large companies, up to #7, while it is also a new entry into the top 10 risks for smaller companies at #10. The fear of trade wars and protectionism is increasing, and analysis by Allianz and others shows that within the last decade, export restrictions on critical raw materials increased by a factor of five. Tariffs and protectionism may be top of the list of the new US government, but on the other hand there is also the risk of a ‘regulatory wild west’, particularly around AI and cryptocurrencies. Meanwhile, sustainability reporting requirements will be high on the agenda in Europe in 2025.
“The effect of new tariffs will be pretty much the same as with (over)regulation: ramping up costs for all companies affected,” said Ludovic Subran, Chief Investment Officer and Chief Economist at Allianz. “However, not every regulation is inherently ‘bad’. More often than not, the implementation of rules makes corporate life difficult. Not only the number of rules but also an efficient administration that makes compliance as easy as possible should be the focus. A thorough digitisation of the administration is urgently needed. However, in 2025, too, we will probably still be waiting in vain for a corresponding digital strategy. Instead, trade wars are coming. The outlook is not rosy.”
Investors embrace an energised crypto sector
The start of a pro-crypto Trump administration in the US has energised the crypto industry, which now represents a $3 trillion-plus asset class, with Bitcoin and Ethereum accounting for more than $2 trillion. Optimism about the prospects of favourable regulatory treatment and future growth is accelerating crypto adoption among investors.
“In both the US and Europe, asset managers and hedge funds have been dedicating growing resources to digital assets, including technology, data and personnel,” said David Easthope, Head of Fintech Research in the Market Structure & Technology practice at Crisil Coalition Greenwich and author of a report titled ‘Digital Asset Investing 2025: Expanding the Frontier’. “These personnel now have the wind in their sails due to improving sentiment, valuations and a US regulatory posture seeking to incorporate these assets into traditional regulatory structures.”
Crisil Coalition Greenwich predicts that investors will also begin adopting more advanced crypto strategies. For example, while most crypto investment strategies today are long-only approaches that deliver basic exposure to the asset class, 42% of firms have already deployed more sophisticated strategies, including long/short, multi-strategy and index strategies.
“Some investors could simply allocate to Bitcoin or Ethereum and stop there,” Easthope added. “Moreover, ETFs will continue to be a popular choice for traditional investors, as they offer a way to invest in Bitcoin without taking on the technology risks.”
An expanding universe of investment firms will be developing digital asset strategies to capitalise on this demand. Crisil Coalition Greenwich data points to a growing focus on the long tail of crypto assets such as alt coins and DeFi tokens going forward as the sector offers more alpha-generating strategies. Furthermore, derivatives offer a way to gain exposure.
“Going forward, in addition to futures, the emergence of options on ETFs will enable investors to speculate and hedge, allowing for a market structure that traders can more fully utilise,” concluded Easthope.
China's AI development could speed up adoption
The launch of a handful of new Chinese generative artificial intelligence models, which reportedly cost less to build than other models, has sent shockwaves through the tech sector. The share price of a basket of AI-related stocks in the US dropped 10% in the first two days of this week.
The development highlights the sheer amount of capital that's been invested in AI by tech giants, as well as the investment that will be needed to scale the technology going forward, according to Goldman Sachs Research. While it will take time to answer those questions, there are signs that the developments in China could lower the cost of running AI chatbot apps and make them more widely available, according to Ronald Keung, the head of Goldman Sachs Research's Asia internet team.
“What's clear to us is that lowering the cost of AI models will drive much higher adoption, as it would make the models much cheaper to use in future,” Keung said. “Some of these Chinese models have driven the industry to focus not just on raising the performance but also on lowering the cost.”
Keung points out that Goldman Sachs Research’s US and China teams “expect this year to be the year of AI agents and applications” amid the growing adoption of the technology. As costs decline and AI models become smarter, we may be a small step closer to eventual artificial general intelligence, which is an AI that displays excellence across all human fields of knowledge.
Economic optimism finally dawns in Sweden
The Swedish economy will begin its recovery this summer following a lengthy recession, according to Swedbank’s latest Economic Outlook. Domestic demand will drive the development. The Riksbank will continue to cut the policy rate until March, when the low point of its rate-cutting cycle will be reached.
The report shows that the Swedish economy has bottomed out, but growth is not expected to pick up significantly until the second half of this year. Households are optimistic about their future economic situation, but nevertheless remain cautious when it comes to increasing their consumption.
“The household sector is rate-sensitive, and it is only this year that the Riksbank’s rate cuts will start to have more of an impact on household finances,” said Mattias Persson, Group Chief Economist, Swedbank. “Together with real wage growth and tax cuts, this will cause household consumption to grow significantly faster than normal starting this summer.”
The labour market has been weakening for more than two years. When the Swedish economy picks up during the second half of the year, the labour market will strengthen gradually.
Most indicators suggest that the majority of the decline in the labour market has already taken place and that the situation will stabilise going forward. Unemployment is expected to remain at about 8.4% in 2025 and then will start to drop.
In Sweden, inflation is now below the 2% target but is expected to rise and remain near the target during the next two years.
“As inflation has stabilised around the target, and with growth in the Swedish economy at a weaker level than normal, we expect the Riksbank to cut the policy rate in March to 2%, which is our assessment of a long-term normal level,” added Persson. “At the same time, it cannot be ruled out that the Riksbank may need to cut the policy rate even more.”
Domestic demand will boost the Swedish economy in the second half of 2025, according to the report. Higher consumption and housing investments, together with public investments that are growing at a faster rate than normal, will lead to a rise in Swedish growth. Swedbank expects Swedish GDP to grow by 2% this year and by 3% in 2026.
Deutsche Bank supports Dimension Energy’s $150m corporate credit facility
In September, Dimension Energy, a US community solar and battery storage developer, owner, and operator, announced the closing of a US$150m corporate credit facility with Deutsche Bank Infrastructure and Energy.
Deutsche Bank Trust and Agency Services (TAS) has been selected as the administrative agent and collateral agent on this project financing for Dimension Energy LLC. The facility will provide revolving credit in the form of cash and letters of credit to further the deployment of Dimension’s 2 gigawatt (GW) community solar pipeline.
The facility was agreed shortly after Dimension Energy had made public that the company will invest US$3bn over the next five years. Announced in July 2024, Dimension regards this growth plan as solidifying “the company’s leadership trajectory to be one of the largest community solar providers in the US”. By the end of 2025, the company will have more than 800 megawatts (MW) in pre-construction-to-operations assets and 2.8 GW under development across 14 states by the end of 2025.
Community solar projects can provide power to almost 50% of individuals who are unable to put solar on their homes or apartments. Dimension’s projects tap into existing infrastructure, generate power where it is needed, and provide low-cost, clean electricity to surrounding communities.
“This facility will be key to supporting Dimension’s efforts to invest US$3bn over the next five years by financing a significant portion of our near-term development and pre-construction activities,” commented Ryan Liddell, CFO, Dimension Energy.
US Same Day ACH payments volume topped 1.2 billion in 2024
Led by phenomenal growth in Same Day ACH, Nacha reported across-the-board gains in ACH payments volume and value in 2024.
Same Day ACH payment volume topped the 1 billion mark, with more than 1.2 billion payments for the year. The value of those payments was $3.2 trillion. From 2023 to 2024, Same Day ACH volume soared 45.3%, more than double the growth rate from 2022 to 2023. Overall, ACH Network payment volume rose 6.7% from 2023 to 2024, to 33.6 billion payments in 2024. The value of those payments was $86.2 trillion, an increase of 7.6%.
Business-to-business payments continued growing rapidly in 2024. The 7.3 billion B2B payments represent an 11.6% increase from a year earlier.
“The growth in B2B that really began accelerating during the pandemic shows no signs of abating,” said Jane Larimer, Nacha President and CEO. “It’s no wonder that cheques continue to lose favour, given the many problems they present, particularly safety issues. Businesses know the modern ACH Network is the logical choice for safe, smart payments.”
Nacha also released ACH Network results for the fourth quarter of 2024. There were 8.7 billion ACH payments valued at $22.5 trillion, respective increases of 7.4% and 9.5% over the final quarter of 2023.
AI set to unlock the true potential of financial services in 2025
The acceleration of personalisation in banking, driven by AI advancements, impacting customer support, product discovery and tailored user interfaces, is one of the key trends for 2025 identified by benchmarking platform 11:FS Pulse’s fourth annual 11:FS Pulse Report.
The report also finds that innovation and collaboration in the crypto space will surge off the back of pro-crypto regulations following the election of Donald Trump. Traditional financial players will have fewer pitfalls to navigate, inviting strategic deals and major investment.
Additionally, as AI and GenAI mature, customers will face more frequent and convincing scams. Banks will need to innovate at pace while fintechs will be held back by thinner profit margins - with the report flagging that the market should expect more partnerships as a result. AI will also solidify its role as a transformative force in the financial sector, according to the report. Beyond customer-facing tools like chatbots, the real breakthroughs will come from automating workflows, streamlining compliance, and enhancing fraud detection.
KCB and Mastercard partner on platinum multi-currency card in Kenya
KCB Bank Kenya, in collaboration with Mastercard, has launched a multi-currency prepaid card that supports 11 hard currencies in Kenya. This solution is designed to simplify international transactions for customers by enabling seamless spending across various destinations.
The card supports a range of currencies, including the Kenyan shilling, US dollar, British pound, euro, Swiss franc, Australian dollar, Canadian dollar, Indian rupee, Japanese yen, South African rand, and Chinese yuan.
The card is tailored to meet the diverse needs of businesses, corporates, students, athletes and online shoppers, It aims to offer a cost-effective method for managing international transactions by reducing high transaction fees and enhancing convenience for frequent travellers and global spenders.
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