• • • The ceasefire is between the US and Iran and is not a regional peace 鈥�听Israel launched its heaviest strikes yet on Lebanon within hours of the announced deal. Iran hit oil infrastructure in Kuwait, the UAE, Bahrain, and Saudi Arabia 鈥� including the East-West Pipeline, the primary route for bypassing the Strait of Hormuz. Companies planning around a return to normal should instead plan around the idea that the war has narrowed, not ended.

    • If the disruption stays within one quarter, the economic damage is painful but reversible 鈥� The Dallas Fed projects WTI oil at roughly $98 per barrel with a modest GDP hit in a short-closure scenario. The catastrophic scenario 鈥� WTI above $132 with sustained negative growth 鈥� requires the closure of the war to drag past Q2. Every week the ceasefire holds improves the odds, but Iran’s strike on the Saudi bypass pipeline complicates even the optimistic timeline.

    • Iran may have stumbled into the most lucrative chokepoint tax in modern history 鈥� At conservative estimates, transit fees charged for traversing the Strait of Hormuz could generate $40 billion to $50 billion for Iran annually, or roughly 10% to 15% of Iran’s pre-war GDP 鈥� all at near-zero operating cost. That revenue stream inverts Tehran’s incentives. Indeed, keeping the toll system in place may now be worth more than restoring free transit.

On April 7, less than two hours before a self-imposed deadline that threatened the destruction of Iran’s civilian infrastructure, President Donald J. Trump announced a two-week ceasefire in the war in Iran that began on the last day of February and continued over 38 days of sustained air strikes by the Unites States and Israel. In turn, Iran carried out retaliatory attacks across over a dozen countries and forced the effective closure of the Strait of Hormuz.

With the ceasefire, all that has paused. Yet, the question every boardroom, general counsel’s office, and procurement team is asking right now is simple: How can I plan around this?

The honest answer is, not yet 鈥� and the first 24 hours have already shown why.

A fragile, but functional peace

The ceasefire is remarkably thin, and it鈥檚 based on three operative clauses: i) the US and Israel halt strikes on Iran; ii) Iran halts retaliatory attacks on the US and Israel; and iii) Iran allows “safe passage” through the Strait of Hormuz. Everything else 鈥� from nuclear terms, sanctions, reconstruction, and the legal status of Hormuz transit 鈥� has been punted to negotiations in Islamabad beginning April 10, with Pakistan mediating.

With the ceasefire, the question every boardroom, general counsel’s office, and procurement team is asking right now is simple: “How can I plan around this?”

However, what the ceasefire covers matters less than what it doesn’t. Within hours of the announcement, Israel launched its heaviest strikes yet on Lebanon, and Iran warned it would withdraw from the ceasefire if attacks on Lebanon continue. Meanwhile, Kuwait, the UAE, and Bahrain all reported fresh Iranian missile and drone strikes targeting oil, power, and desalination infrastructure after the ceasefire was in place. Most critically, Iran struck Saudi Arabia’s East-West Pipeline, the main route by which Gulf producers have been rerouting oil to bypass the blockaded strait.

That pipeline strike should command attention in every supply chain and energy risk briefing this week because it signals how shaky the agreement is, and that Iran remains a long-term threat to vital infrastructure across the region.

For companies operating in or sourcing from the Gulf, the practical implications are immediate. This is not a ceasefire that restores pre-war operating conditions; rather it is a bilateral pause between two belligerents while the regional war continues around them. Insurance premiums, shipping risk assessments, and supply chain contingency plans should reflect that distinction until there is a meaningful shift.

What does this mean for the next two weeks?

Both sides are claiming victory 鈥� and increasingly, claiming different deals. Trump called Iran’s 10-point proposal “a workable basis on which to negotiate”; and Iran’s Supreme National Security Council called the ceasefire a “crushing defeat” for Washington. The White House now says the 10-point plan Iran is publicly circulating differs from the terms that were actually negotiated for the ceasefire. Tehran, meanwhile, says there is no deal at all if Lebanon isn’t included 鈥� a condition the US has not acknowledged. And of course, the Strait of Hormuz remains closed.

These are not the hallmarks of a stable agreement; but they may be the hallmarks of a durable one. The deal is thin enough so that each side can brief its domestic audience on a different story, and as long as neither is forced to reconcile those stories publicly, the pause holds.

And the incentives to keep talking are asymmetric but real. The US has watched gas prices surge past $4 nationally as domestic support for the war 鈥� which started at levels best described as in a hole 鈥� continued to drop even further. Goldman Sachs raised its recession probability to 30% and JPMorgan to 35%, and every day the strait stays closed pushes those numbers higher. The administration needs the global economy to exhale and needs distance itself from a war so it can focus on other priorities, including an already difficult midterm election cycle.

With the ceasefire, all that has paused. Yet, the question every boardroom, general counsel’s office, and procurement team is asking right now is simple: How can I plan around this?

Iran, for its part, wants the bombing to stop. Its conventional navy has been functionally destroyed, its air defenses are highly degraded, its nuclear facilities have sustained severe damage, and its cities, bridges, and transportation networks have been hit repeatedly. The regime survived and arguably emerged with greater domestic legitimacy than it had before the war, but the physical toll is mounting. Tehran wants the strikes to stop so it can claim victory by survival without incurring any more costs.

This mutual exhaustion is the load-bearing structure of the ceasefire. If the ceasefire holds for 72 hours (as I think it might), and if the strait begins opening to escorted traffic by Friday as Iranian officials have signaled, and if neither side finds a reason to walk away before the Islamabad talks convene, then the ceasefire will likely be extended. Not because the underlying disputes get resolved, but because the cost of resuming hostilities exceeds the cost of continuing to talk. Expect a rolling series of extensions, probably 30 to 45 days at a time, that resolve nothing while letting global markets gradually stabilize.

As we wrote earlier this month, if the disruption remains limited to roughly one quarter, the oil price shock is painful but reversible, ugly, but manageable. And every week the ceasefire holds pushes the trajectory toward the manageable scenario.

What happens after the ceasefire?

Again, if the ceasefire holds, we then have to start thinking about how this conflict resolves. Not surprisingly, this is where it gets uncomfortable.

The conventional assumption in Washington and in global markets is that the Strait of Hormuz will return to normal once the fighting stops. That assumption underestimates what Iran has built.

Iran’s parliament is working to pass a Strait of Hormuz Management Plan, codifying its claimed sovereignty over strait transit and establishing a legal framework for collecting toll fees. Media reports indicate Iran has been charging vessels between $1 million and $2 million per transit and is planning to keep charging those tolls for all ships as the strait reopens. So, at $1 million per ship, and with up to 135 transits per day, 365 days a year, that’s about $40 billion to $50 billion in annual revenue for Iran, or up to 15% of Iran’s pre-war GDP. All at an operating cost that approaches zero.

Iran didn’t enter this war planning to build the most lucrative chokepoint tax in modern history, but it may have stumbled into exactly that.

Compare that to Iran’s oil sector, which generated approximately $53 billion annually in 2022 and 2023, required massive capital investment and maintenance, and was subject to constant disruption. The toll revenue is comparable in scale, dramatically cheaper to operate, and immune to sanctions. If the final number is even a fraction of this, it鈥檚 still a massive financial shot in the arm for Iran that could become a far greater advantage than the damage to capital that the war has inflicted upon the state.

Iran didn’t enter this war planning to build the most lucrative chokepoint tax in modern history, but it may have stumbled into exactly that.

Of course, this changes the structural incentives around the Strait of Hormuz in ways most analysts haven’t fully absorbed. A permanent toll system gives Iran a revenue base to rebuild the military assets it lost, reduce its dependence on oil exports, and fund domestic investment that could blunt future protest movements. The regime’s cost-benefit calculus has inverted: Keeping the toll operational in place may now be worth more than restoring the pre-war status quo.

For the US and Israel, the only way to dismantle this arrangement is by force and the last 38 days demonstrated the limits of that approach. The US achieved air and naval superiority, destroyed Iran’s conventional military, and killed the supreme leader. None of it was enough to compel capitulation, and in fact, may not have even come close. A second campaign faces the same likely result, against a population now unified by the experience of surviving the first one.

The war didn’t just disrupt global trade. It may have permanently repriced the most important shipping lane on Earth 鈥� and left every piece of energy infrastructure in the Gulf more vulnerable than it was before the first air strike landed.

Please add your voice to 成人VR视频鈥� flagship , a global study exploring how the professional landscape continues to change.听

Key takeaways:

• • • Q2 is a wound that heals if the war stops 鈥� Oil spikes, inflation revisions, and supply disruptions are painful but mostly reversible in a short-war scenario. The exception is insurance and risk premiums for Gulf maritime transit, which are permanently repriced.

    • Q3 is a wound that scars 鈥� Sustained oil at $130 per barrel changes household and business behavior in ways that don’t snap back. Recession probability crosses the coin-flip threshold and supply chain disruptions cascade into industries far from the Gulf.

    • Q4 is a different body 鈥� Even if the war ends, the global economy has rebuilt itself around the disruption. Trade routes, supplier relationships, and risk models have been permanently rewired, especially if there is nothing structural to prevent the Strait from closing again.

This is the second of a two-part series on the impact of the war with Iran as the conflict continues. In this part, we鈥檒l walk through what a quarter-by-quarter economic scenario would look like if the war continues.

Previously, we made the case that the US-Iran war is unlikely to end quickly. The regime hasn’t collapsed, the asymmetric force controlling the Strait of Hormuz is nowhere near neutralized, and diplomacy seems dead on arrival. Most significantly, the United States military is escalating, not winding down.

While the first part of this series was about the military and diplomatic picture, this piece is about your balance sheet.

What follows is a quarter-by-quarter map of what a prolonged conflict means for the global economy, charted from now through Christmas 2026. We鈥檒l cover how oil, supply chains, GDP forecasts will be revised in real time, and how disruptions that look temporary in Q2 could trigger a permanent rewiring of how the global economy moves goods, prices risk, and sources critical inputs.

Even if your company doesn鈥檛 import a single barrel of Gulf crude, you could still get hit by this. Indeed, if you’re plugged into the global economy like the rest of us, you’re going on this ride.

Q2 2026 (April鈥揓une): The wound that heals

If the war ends by the close of the second quarter on June 30, most of the damage is reversible 鈥� painful, but reversible.

Brent crude is up about 60% since before the start of the war when it was roughly $70 per barrel; and Capital Economics , prices could fall back toward $65 by year-end. The interim outlook from the Organisation for Economic Co-operation and Development (OECD) now to be 4.2% for 2026, up sharply from 2.8%, assuming energy disruptions ease by mid-year. If that assumption holds true, it鈥檚 likely we鈥檒l be able to muddle through the pain.

Even in the most optimistic scenario, however, Q2 introduces disruptions beyond oil that most people aren’t tracking. The Gulf supplies roughly 45% of global sulfur, and Qatar produces around one-third of the world’s helium, which is essential for semiconductor manufacturing. Further, Qatar鈥檚 liquified natural gas (LNG) production was significantly damaged by Iranian strikes.

Even in the most optimistic scenario, however, Q2 introduces disruptions beyond oil that most people aren’t tracking.

Further disruptions in fertilizer supply chains could delay spring planting, which could ripple into agricultural yields well into 2027. These effects don’t snap back the moment oil flow normalizes; they have their own timelines.

And here’s the one thing that doesn’t reverse even in the best case 鈥� risk premiums. The Strait of Hormuz was priced as a chokepoint that would never actually close. So when it did, that repricing is permanent and will be felt across the world as risk around other too important to fail chokepoints is itself reevaluated and priced higher.

Q3 2026 (July鈥揝eptember): The wound that scars

If a Q2 end to the war represents a recoverable spike, a Q3 end is where the word structural starts showing up in the discussion.

Capital Economics models Brent at roughly $130 per barrel 鈥� or roughly 14% higher than where it is now 鈥� in a prolonged scenario. At those prices, the damage stops being abstract. And Moody’s Analytics chief economist Mark Zandi estimates that every sustained $10-per-barrel increase . At $130 (nearly double pre-war levels) that’s approaching $2,700 per family. That is the kind of money that changes behavior.

In this case, Zandi says, especially if the cost of oil stays elevated for months 鈥� and by Q3, it would have. Moody’s recession probability model was pushing 50% in late-March when oil was $108 per barrel. At $130, the math speaks for itself.

Again, in this scenario, the damage fans out beyond energy. Fertilizer shortages hit crop yields, and helium disruptions cascade into semiconductors, automotive, and medical devices. The potential impact on AI-related manufacturing alone could spook investors already primed to see AI as a bubble. Capital Economics projects Eurozone growth at 0.5% and Chinese growth below 3%. Emerging markets could face forced rate hikes that deepen their own recessions.

This is the quarter in which contingency plans become operating assumptions. The question is no longer When does this go back to normal? 鈥�听rather the question is whether normal is coming back at all.

Q4 2026 and beyond: The different body

Here’s what most forecasts don’t capture about a war that continues passed Q4: It almost doesn’t matter whether the war is still active or not. The damage has changed shape, and it’s no longer about what the conflict is doing to the global economy. Instead, it’s about what the global economy has done to itself in response.

Companies that spent Q2 and Q3 diversifying away from Gulf suppliers have now spent real money building alternatives. They are not going back to their pervious pathways even if there is a ceasefire. The sunk costs make the reversal unthinkable, and the memory of this conflict makes it irrational. No supply chain director is walking into a boardroom to recommend re-concentrating risk in a chokepoint that closed once and might close again.

The prudent approach for companies remains clear. They should plan for the war to last into at least Q2, probably Q3, with structural effects persisting beyond.

Because, of course, it could close again. If Iran emerges weakened but intact, which is the most likely outcome per multiple intelligence assessments, the result is a hostile state with every incentive to reconstitute its asymmetric capabilities the moment the pressure lifts.

Companies are thus going to reroute their future supplies around the Strait rather than through it. High oil prices and the potential for global shortage will also further accelerate green energy initiatives or alternate fuel sources across the globe as oil security reenters geopolitical calculations. Most importantly, every organization鈥檚 supply chain will need a reevaluation in light of an increasingly dangerous world, with expensive secondary supply chains becoming more a necessity than a luxury.

That鈥檚 the real legacy of a war continuing past the end of this year. Not oil prices on any given day or even insurance premiums, but the permanent repricing of an assumption. The war didn’t just disrupt the flow of goods through the Strait of Hormuz, it broke the premise that some geographies were too big to fail and would be protected and kept open. Once that premise is now broken so thoroughly companies will need to reevaluate whether the concentration of risk in individual areas is a luxury they can afford. Many will find the answer to be no, resulting in an increased push to diversify risk away from single points of failure.

The planning imperative

Fortunately, the best-case scenario remains possible. However, it requires Iran accepting terms it has publicly rejected as existential, its navy being neutralized despite retaining significant asymmetric combat capability, a coalition materializing from countries that have refused to send warships, and mine-clearance operations succeeding with the deck stacked against them. Only then, we鈥檒l see if civilian traffic is willing to risk billions of dollars that the clean-up job was done right. Each is possible, but the odds remain slim.

The prudent approach for companies remains clear. They should plan for the war to last into at least Q2, probably Q3, with structural effects persisting beyond. They should model energy prices at between $120 and $150 per barrel, not $70. The smart companies are the ones building optionality now because the cost of flexibility is far lower than the cost of being caught flat-footed in September.

Four weeks ago, the assumption was that the Strait of Hormuz was too important to close. However, it did, and the assumption that it will reopen quickly deserves the same scrutiny.

You can find out more about the听geopolitical and economic situation in 2026听here

Key insights:

• • • Nature-related risks underreported 鈥� Companies鈥� nature-related interfaces are underreported across industries, despite being increasingly seen as decision-useful information for investors and regulators.

    • Stricter requirements for disclosure growing 鈥� Both voluntary and mandatory frameworks are increasing their requirements for nature-related disclosure.

    • Organizations should be proactive 鈥� Getting ahead of disclosure trends means that organizations should be measuring their nature-related interface as well as integrating nature-positive transition planning to their business strategy.

As the impacts of nature loss become more prevalent, companies are on business risk and performance. This is due to both physical nature-related impacts and increasing stakeholder pressure on organizations to integrate long-term nature-positive strategies. Managing nature-related impacts and dependencies is a framework-driven mandate for all boards of directors to consider.

Why nature matters

All businesses impact and depend on the four realms of nature: land, freshwater, ocean, and atmosphere to some extent, with the highest impact sectors being . These dependencies could include the provision of water supply to an organization, or services provided by nature to a business, such as flood mitigation. A could result in a $2.7 trillion GDP decline annually by 2030. In turn, most businesses also positively and negatively impact nature.

Financial flows that were determined to be harmful to biodiversity reached , including private investment in high impact sectors, with only $213.8 billion (鈧�184.6 billion) invested in conservation and restoration. Despite this financing gap, less than 1% of publicly reporting companies currently disclose biodiversity impacts, indicating the need to align incentives and policies with nature-related outcomes.

Indeed, nature does not have a single indicator, like greenhouse gas (GHG) emissions; instead, its measurement involves multiple complex, location-specific factors. Despite this, disclosure of nature-related risks and impacts are increasingly being required by regulators.

Regulatory incentives to disclose

The disclosures being driven by regulatory frameworks include material information on all nature-related risks, particularly those requested by the International Sustainability Standards Board (ISSB) and European Sustainability Reporting Standards (ESRS). The ISSB Biodiversity Ecosystem and Ecosystem Services project (BEES) was initially considered a research workplan but was modified to a standard-setting approach.

Through its work, the ISSB due to: i) the deficiencies in the type of information on nature-related risks and opportunities reported by entities, which are identified as important in investor decision-making; and ii) the requirement of nature-related information that is not included in climate-related disclosures, including location-specific information on nature-related interface and nature-related transition planning.

On Jan. 28, all 12 ISSB members voted to , which included two important implications. One is that standard setting is to cover all material information on nature-related risks and opportunities that could be expected to affect an entity鈥檚 prospects. And two, it mandated that entities applying International Financial Reporting Standards听S1 and S2 for climate-related disclosures supplement these with nature-related risks and opportunities disclosures as well.

Similar to the ISSB requirements to report material nature-related risks and opportunities, the ESRS also requires information to be disclosed for material impacts, risks, and opportunities found in an entity鈥檚 double-materiality assessment. The Task Force on Nature-related Financial Disclosures (TNFD) and its European counterparts have been in close collaboration since 2022, and all 14 TNFD recommendations have been incorporated throughout the ESRS environmental standards.

Companies that are required to comply with the EU鈥檚 sustainability reporting mandate also will be required to collect similar data for their future ESRS data points disclosure.

Alongside regulatory requirements, there are voluntary requirements and investor pressure to consider for many organizations. These include investor coordination initiatives on nature such as Nature Action 100 and considering which investors look at Carbon Disclosure Project (CDP) data.

To use the CDP as an example, 650 investors with $127 trillion in assets they needed in 2025. Further, the CDP is increasing its disclosure requirements for nature-related data in its questionnaire as it progresses to . This includes, for example, requiring disclosures on environmental impacts and dependencies for disclosers, enhancing commodities included in the forests questionnaire, and introducing oceans-related questions in 2026.

All of these heightened requirements underscore the need to measure a company鈥檚 nature-related impacts and proximity to its nature-related issues.

Implications for company boards

To align with these additional requirements and investor expectations, corporate decision-makers should consider the questions they are asking related to nature, as well as what data is being collected in relation to the organization鈥檚 impact on nature. The following steps can give leaders a starting point for how boards should consider this information:

Track relevant developments in regulatory and investor standards 鈥� Ensure there is a management-level understanding of how nature is considered in relevant standards for the company based on its current and anticipated locations of operation and specific industry.

Measure nature-related risks and opportunities 鈥� Given that identifying material nature-risks, with a particular focus on location specificity, is a common first step across current mandatory and voluntary regulatory frameworks, organizations should conduct a regularly updated, location-specific assessment on the company鈥檚 interface with nature, especially in instances in which these issues are material. Organizational leaders should also produce financial quantification of these risks within an overall materiality assessment and corporate risk register. For guidance, the best practice across these regulatory and disclosure frameworks is to utilize the .

Make further disclosure of any material nature-related information, including financial quantification 鈥� Frameworks such as the ESRS require further disclosure of any risks that are found to be material, including financial quantification and scale of the risk.

Integrate mitigation of nature-related risks in business strategies 鈥� Upcoming standards and research, such as that from the ISSB, indicates that missing disclosure includes company鈥檚 nature-positive transition planning. Consider how to integrate nature into long-term business strategies for full alignment with upcoming regulations and standards, including establishing nature-related governance.

Adopting these processes and integrating nature into corporate decision-making will provide corporations with a more future-proof and resilient business model. The increased adoption of nature within these frameworks is driven by the clear economic impact that our current loss of nature is having. This will only continue to become more of a priority as the impacts of nature loss are increasingly felt worldwide.

You can find out more about the听sustainability issues companies are facing around the environment听here

Key takeaways:

• • • New Zealand legal market achieves revenue and profit growth 鈥� A new TRI report on the New Zealand law firm market shows firms rebounding strongly from the pandemic, with firm revenue and profits up impressively.

    • Transactional and counter-cyclical practice demand drives success 鈥� More than half of the legal demand for New Zealand law firms comes from transactional work, which rose of the past year; meanwhile, counter-cyclical practices saw even higher growth rates.

    • Managed expenses and increased partner utilisation boost profit margins 鈥� Despite rising expenses due to technology and knowledge management investments, New Zealand law firms maintained manageable costs and increased equity partner utilisation.

For New Zealand law firms, years of careful investment and strategic pandemic recovery have paid off. Today, strong demand has vaulted firm revenue growth above double digits, leading to profits not seen among New Zealand firms since the early days of the pandemic, according to a new report from the 成人VR视频 Institute (TRI) and data from TRI鈥檚 .

Jump to 鈫�

2026 Report on the State of the New Zealand Legal Market

Demand at New Zealand law firms rose more than 5% last year, following stagnant or decreasing growth rates between 2022 and 2024, according to TRI鈥檚 2026 Report on the State of the New Zealand Legal Market. As a result, overall firm revenue rose by more than 10%, placing it back near pre-pandemic levels. Coupled with managed expense growth, New Zealand law firms saw their first double-digit profit growth since 2021, after declines in demand for transactional practice work scuttled profits in 2022 and 2023.

Overall, more than half of the legal demand for New Zealand law firms comes from transactional work such as corporate general and M&A practices; and indeed, demand for such work rose last year after seeing only modest growth or declines in the the years prior. However, the report shows that even more notable is the rise of demand in counter-cyclical practices such as disputes & litigation, insurance defense, and workplace relations. The growth rate of counter-cyclical demand topped that of transactional demand in the second quarter of last year and continued to separate itself throughout the remainder of the year.

At the same time, firms continued to enjoy steady rate growth, with their worked rate growth over this past year coming close to their average rate growth than was seen from 2022 to 2024.

Interestingly, this represents a different strategy by New Zealand firms, compared to those in the United States or Australia, to capture profits through other means while keeping their rate increases manageable. And indeed, while Australian and US firms have largely seen falling utilisation, New Zealand equity partners averaged more hours worked per month in 2025 than they did the year prior, which helped to drive higher revenues.

Meanwhile, total expenses ticked up slightly last year compared with 2024, with both direct expenses and indirect expenses rising. However, much of this growth in indirect expenses is largely due to increased investments in technology and knowledge management, an increasingly necessary expense in the age of AI.

As a result of the demand rebound and more manageable expenses, New Zealand law firms are seeing their revenues and profits soar.

Overall revenue more than doubled, percentagewise, in 2025, which in turn directly led to sky-high profits in 2025 that were almost triple what they were the year prior. Profit per equity partner also saw similar gains.

Overall, New Zealand law firms on average largely held steady with a profit margin around 43%, while some firms saw profit margins soar above 50%.

As the report shows, all of this represents a very positive financial picture for New Zealand law firms. The return of demand, steady rate growth, and managed expenses has provided firms a solid footing from which to grow further. And if New Zealand law firm leaders can build on those positive metrics, they look poised to take these gains and grow further in 2026.

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a full copy of the 成人VR视频 Institute’s “2026 Report on the State of the New Zealand Legal Market” by filling out the form below:

Key insights:

• • • Geopolitical crises fuel financial volatility and illicit activity 鈥� Conflicts have traditionally accelerated capital shifts and flows, creating cover for bad actors.

    • Predictable patterns emerge 鈥� Financial institutions should watch for sudden cross-border activity, unusual cash deposits, and transactions from border areas.

    • Conflict zones enable black market expansion 鈥� They also should adapt their compliance systems to detect more sophisticated methods used by criminals, tightening screening and enhancing staff training.

While business and international politics may appear cold and calculating, these things are often driven by emotion, especially fear 鈥� and fear of instability often drives market volatility.

So it goes as the United States attacks one of the world’s largest militaries and supporters of regional terror groups, causing deepening instability in a Middle East already beset by violence. It is certain that there is already a surge of money flowing in and out of the region for different reasons. Legitimate and illegitimate actors alike will seek to both run away from the crisis and profit from it. However, there are some anti-money laundering specific thoughts that financial institutions need to consider during a time of global uncertainty.

The bottom line 鈥� lots of money is on the move. Funding will send aid groups towards the crisis; it will also send logistical supplies, war material, and other necessities. All of these cost money, and defense sectors in multiple countries will be pumping out munitions to refill stockpiles in any country that is related to or in the neighborhood of the conflict.

Not every large transaction is an unusual, reportable event, but financial institutions now need to look one or two layers below the surface. What does not seem related on the surface is always a red flag. Look at beneficial ownership of companies and vessels, look at relations of the owners, not just the 听(OFAC) results of those people themselves. The financial system will, and should, allow the legitimate funds to flow. However, financial investigators must remain diligent to catch bad actors that take advantage of the surge in non-profit activity or the urgency with which legitimate businesses operate in a conflict zone.

Risk Factor 1: Capital flight from regime change

Just as the fall of the Al-Assad regime in Syria caused family funds to flow to as regime members fled the country, you will see the same with politically exposed persons (PEPs) who are inevitably fleeing regime change in Iran. A political crackdown will come. Whether the victors are on the side of the West or not remains to be seen, but some factions are going to flee the country and take family wealth with them.

Banks and other financial services should watch for anyone connected to people moving money through neighboring countries in which they may have literally hiked or driven before depositing cash into a financial institution. There are stories of refugees leaving places with gold bands on their arms, cash and false bottom purses, and diamonds in the lining of sweaters. These things will be converted to cash in neighboring countries and put into financial systems less affected by the conflict. An influx of cash throughout the region, therefore, could indicate this type of capital flight.

Risk Factor 2: Illicit finance and black markets

Since the fall of Syria, we have also become aware of that helps fuel addiction and armed conflict. There are certainly other substances and drug trafficking networks about which we know very little on this side of the secrecy veil.

Therefore, this instability will be seen as a time of opportunity for criminal groups. Indeed, with Assad鈥檚 security forces no longer controlling middle eastern captagon and other narcotics trade and various armed groups looking for funding sources, this is an illicit business opportunity.

Financial institutions can expect rapid movement of money between unrelated shell corporations, new corporations, and shadow vessels. They also should expect the black market to boom with drugs, contraband Iranian oil, and funds tied to narcotics that they have only yet to discover. Illegal arms will also generate funding, so all of the methods, both formal and informal, used to transfer value will become active.

In fact, large portions of such funding will flow through financial institutions; and peer to peer payment providers, FinTechs, and money transmitters should be especially wary of funds moving rapidly through their platforms. A burst in conflict means a burst in activity from illicit sources; therefore, enhanced, targeted monitoring is a must.

How financial institutions鈥� risk & compliance teams should respond

First, all financial institutions鈥� risk & compliance departments need to assess their institutions鈥� OFAC and sanctions screening search parameters. This is a good time to dial up fuzzy logic capability and reduce match percentage thresholds. In other words, risk tolerance should go down while the metaphorical dragnet gets wider. Surge the department鈥檚 personnel capability to compensate if you have to, because that is better than a strict-liability OFAC fine. Remember, OFAC sanctions are closely tied to national security, especially when it comes to Iran. This is not an arena in which leniency can be expected. Compliance teams should look at monitoring systems and thresholds immediately, create geographical targeting models to cover the conflict zone, and consider a command center approach to deal with the fluidity of the situation until things settle.

If your institution has not already taken the hint from regulators, this also is an opportunity to double down on Customer Due Diligence and identity verification. Front line staff and embedded business compliance personnel should receive updated training and job aids to increase awareness and hone internal reporting. Indeed, it is an advanced business skill to understand complex corporate beneficial ownership, much less to detect when it may be tied to illicit activity or corrupt regimes. Now is the time to increase that level of knowledge and thereby make the culture of compliance more robust.

In every crisis there is opportunity as well as risk: Managing the risk allows every company to take advantage of the opportunity, shore up its mission, and strengthen the institution.

You can find out more about听the geopolitical and economic outlook for 2026听here

Key insights:

• • • Pushing innovation in the financial sector 鈥� The OCC is actively enabling innovation among financial service institutions, not resisting it.

• • • Regulation is being refocused, not removed 鈥� Priorities may change with each administration, but oversight remains, and crypto is increasingly central.

    • Compliance is a growth requirement 鈥� Regulations around the BSA, sanctions, and KYC still apply, so durable controls and experienced teams do matter, even with AI.

Shortly after being named Acting Director of the Comptroller of the Currency in early 2025, Rodney E.听Hood in the financial sector. Hood spoke about improving bank-fintech partnerships and providing regulatory frameworks for digital asset activities.

As expected, the Hon. Jonathan V. Gould was sworn in as the 32nd on July 15, 2025. Under his leadership of the Office of the Comptroller of the Currency (OCC), the spigot of technology-enabled financial innovation is set to remain wide-open, with blockchain-based products at the forefront.

In his speech to the , Comptroller Gould laid out a road map to a future that includes more de novo charters, with many of them coming from the ranks of blockchain and digital or virtual asset service providers (VASP). He refuted notions that these things cannot be done under current rules and reaffirmed the agency’s ability to regulate such institutions.

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Institutions that fail to embrace these emerging technologies as they arise risk falling behind, Gould said, describing how any legal framework that treats digital assets differently than existing electronic means is risking 鈥渁 recipe for irrelevance.鈥� Such an antiquated approach keeps companies, institutions, and indeed the nation鈥檚 entire financial system, mired in the past, he added.

Digi-mon go!

In word and deed, the current OCC continues to offer a green light to VASPs as well as to traditional financial institutions that are looking to dabble with blockchain, stablecoins, and the like. Regulatory action in the past year mostly served to end prior enforcement against traditional institutions while putting ancillary companies in check. For example, of US/Mexican border casinos, crypto ATM-style terminals, and armored car companies demonstrates the regulatory shift that takes place after each change in administration.

Government rarely gives up its authority, but it does shift the focus. Border cash is out, crypto is in. Clear regulation for this sector is important, necessary, and will continue to create an entirely new set of financial products & services.

Institutions that fail to embrace these emerging technologies as they arise risk falling behind… [and] any legal framework that treats digital assets differently than existing electronic means is risking ‘a recipe for irrelevance.’

Normally I advocate more caution but, in this case, having any regulation is better than having no regulation. Blockchain is here to stay and having any kind of clarity around it is the right way to begin. Those who legislate have an opportunity to improve the regulatory framework over this technology as it evolves 鈥� as long as a framework exists. It’s sort of like the slippery slope argument in reverse: When we build a foundation on regulations that encourage innovation while protecting consumers, including the companies themselves, we create a healthier economy. These rules can always be improved and adjusted as we understand better what we have unleashed upon the world.

Compliance is on the 鈥渃an鈥檛 cut鈥� list

Rumors are swirling of cuts to many corporate compliance budgets. Many compliance pros think this administration will let companies do as they please! Let a professional risk manager urge caution here instead. The power of the Bank Secrecy Act (BSA), the extraterritorial reach of sanctions, and the requirements to know your customers (KYC) are not going anywhere. Regulations are refocused, not removed. A proliferation of nouveau financial institutions will provide a target-rich environment for the regulators of today and tomorrow to find things they dislike and prosecute those offenses. A business that hopes to make it big should be built to withstand the winds of change and weather different regulatory conditions over time.

Therefore, smart compliance professionals will keep an eye on the horizon and keep their risk controls tight. Yes, it may be a good time to start a crypto company; but no, that does not mean you can process drug cash, ignore sanctions, or fail to collect basic personally identifying information.

With increasingly ubiquitous AI tools, your humans in the loop are more important than ever. As entry level jobs become automated, depth of experience becomes more valuable. Retain talent and institutional knowledge on your compliance teams because those individuals will train the AI as well as the investigators of tomorrow.

Indeed, no matter who is in charge of the government鈥檚 regulations, enforcement will come when you let your guard down and ignore basic risk management principles.

You can find more about how government agencies are managing various risk, fraud, and compliance issues here

Key points:

• • • USMCA at risk 鈥� Rising tariffs, political friction, and the potential 2026 review are creating uncertainty around rules of origin, market access, labor obligations, and dispute鈥憆esolution mechanisms 鈥� areas that are central to legal and tax planning.

    • Economic impact 鈥� Mexico depends on USMCA for exports, investment, and employment; and any disruption would be problematic.

    • Water as a strategic resource 鈥� The conflict over the 1944 Treaty and the new law reflect the critical importance of water usage and water rights in the bilateral agenda.

For almost 25 years before the United State-Mexico-Canada Agreement听(USMCA), it was the North American Free Trade Agreement (NAFTA) that defined the region鈥檚 economic relationship. Enacted in 1994, NAFTA removed most tariffs, encouraged foreign investment, and integrated supply chains across North America, especially in manufacturing, automotive production, and agriculture. This integration helped transform Mexico into a major export platform and contributed to North America鈥檚 emergence as a competitive economic bloc.

Over time, however, NAFTA drew criticism, particularly in the US, where concerns grew about trade imbalances, worsening labor conditions, and the agreement鈥檚 ability to address modern challenges such as . These political pressures set the stage for renegotiation and ultimately produced the USMCA, a more modern but also more politically sensitive framework.

The current chaotic environment around tariffs and trade suggests that these rules in North America may again be subject to revision. Understanding how tariffs, political dynamics, and resource鈥憆elated tensions interact is essential for organizations and corporations as they try to plan for the legal and tax implications that may arise as the 2026 review approaches.

A year of trade tensions

From the beginnings of Donald Trump鈥檚 second administration in January 2025, , marking the start of a more protectionist trade policy.

In March, some of those tariffs were exempted for products that comply with USMCA provisions. However, in December, President Trump declared that the US would allow the treaty to expire or seek to renegotiate it in 2026, alleging that Canada and Mexico have gained advantages to the detriment of US interests.

Not surprisingly, throughout 2025 and saw President Trump accuse Mexico of failing to comply with the 1944 Water Treaty, a historic agreement that regulates the distribution of water resources from the Bravo, Colorado, and Tijuana rivers. According to the US government, Mexico had not delivered the agreed-upon volumes, generating friction amid a political context already marked by trade disputes.

Mexico argued that prolonged droughts between 2020 and 2025 made compliance with the treaty difficult, affecting water availability in its own agricultural and urban regions. However, President Trump warned that if water flow to the US did not increase, he would impose a 5% tariff on Mexican exports, adding pressure to the bilateral relationship. Finally, after negotiations, an agreement was reached: Mexico must supply the remaining amount before 2030, which represents a significant challenge for the country鈥檚 water management.

In this context, the Mexican government promoted a structural reform to ensure compliance with the treaty and guarantee efficient resource management. On December 11, 2025, the and came into force the following day. This regulation establishes a new legal framework with three fundamental pillars:

• • • comprehensive state responsibility for water management;
    • exclusive powers for Conagua in the allocation, supervision, modification, and revocation of concessions; and
    • prohibition of concession transfers between private parties, preventing speculation and resource hoarding.

The law directly impacts strategic sectors such as agriculture, livestock, industry, and rural communities, as well as domestic services. Beyond its internal scope, this reform is interpreted as a mechanism to guarantee compliance with the Water Treaty, reduce the risk of trade sanctions, and strengthen Mexico鈥檚 position in future international negotiations.

Economic impacts and projections

For Mexico, the USMCA is not merely a trade agreement; it represents a strategic pillar for the country鈥檚 economic stability and sustained growth. Since its entry into the USMCA, Mexico has become a reliable partner in the North American region, guaranteeing its preferential access to two of the largest markets in the world. This advantage has driven foreign direct investment into the country, especially in sectors such as automotive, advanced manufacturing, agribusiness, and emerging technologies.

The importance of USMCA lies in the fact that . Without this legal framework, Mexico would face an adverse scenario because the imposition of significant tariffs would reduce the competitiveness of national products, increase supply chain costs, and directly affect job creation. The automotive sector, for example 鈥� and about 30% of manufacturing GDP in Q3 of 2025 alone and employs more than 1 million people 鈥� would be one of the hardest hit by the loss of these preferential conditions.

In addition, USMCA offers legal certainty for investors. Clear rules on intellectual property, digital trade, and dispute resolution reduce risks and encourage the arrival of foreign capital. Without this treaty, Mexico could experience an outflow of investments to other countries with more stable agreements, which would negatively impact job creation and projected economic growth.

The coming USMCA review

The possible renegotiation of USMCA, scheduled for later this year, generates uncertainty. This review process presents several possible paths for Mexico, each with distinct economic, political, and diplomatic implications. If the USMCA is successfully extended without substantial modifications, Mexico would preserve its preferential access to the US and Canadian markets, maintaining the commercial stability that supports most of its exports. This continuity would reinforce investor confidence, support job creation and stabilize diplomatic relations.

However, if no agreement is reached to extend the treaty, this absence of clarity would create uncertainty for businesses operating throughout North America. Investment decisions could be delayed, expansion plans postponed, and operating costs could rise due to increased scrutiny and customs enforcement. Further, diplomatic tensions could begin again, particularly if unilateral measures such as large tariffs are threatened again. In this environment, Mexico would need to adopt a cautious strategy focused on strengthening legal frameworks and offering targeted economic incentives to maintain its own competitiveness.

Another scenario in which the parties fail to reach consensus would activate the formal pathway toward the treaty鈥檚 expiration in 2030. While trade flows would continue in the short term, markets would begin adjusting to the anticipated end of the USMCA. This expectation could trigger a gradual relocation of investments and restructuring of supply chains, particularly in industries heavily integrated with US production networks, such as automotive manufacturing and advanced industrial sectors. Pressure on the peso, slower GDP growth, rising import costs, and early job losses would likely follow; and even if diplomatic efforts emerge to prevent severe disruption, the economic effects for Mexico would become progressively more adverse.

However, the most severe scenario involves one country withdrawing from the USMCA, which would cause the agreement to collapse for all three members. For example, if the US were to withdraw, Mexico would immediately face World Trade Organization tariffs, dramatically increasing export costs for manufactured goods and agricultural products and severely disrupting supply chains.

Clearly, any of these scenarios highlight how critical this year will be for Mexico. While a successful extension of the USMCA would support stability, attract investment, and sustain long鈥憈erm growth, a failure to reach agreements 鈥� or the withdrawal of a partner country 鈥� could reshape Mexico鈥檚 economic landscape for years to come.

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Key insights:

• • The North American economic bloc facing significant challenges 鈥� Due to escalating trade tensions and policy uncertainties, the trading bloc comprised of the US, Canada, and Mexico is currently facing significant challenges that have the potential to undermine economic growth and stability across the region.

  • Customized trading strategies needed 鈥� Given each country鈥檚 unique economic outlook, policymakers will need to work on tailored strategies to address each nation鈥檚 specific issues.

  • Communication & collaboration are key 鈥� The future of North American economic cooperation hinges on sustained dialogue and cooperation among the member countries. For continued and shared economic prosperity in the region, the three nations must work together.

For many years, the North American economic landscape has been defined by robust collaboration among the United States, Canada, and Mexico. Policymakers strategically leveraged the region’s unique geographical advantages and opportunities to foster prosperity, leading to the creation of one of the world’s most powerful trading blocs. After the North American Free Trade Agreement (NAFTA) was supplanted by the United States-Mexico-Canada Agreement (USMCA) in 2020, it became the world’s , with the combined imports among the three nations amounting to .

Despite this success, the bloc鈥檚 partnership is now precarious. Escalating trade tensions now pose considerable challenges not only for the three participating nations but for the global economy as a whole now and in the future.

The United States

The Trump administration activities around tariffsand ensuing policy uncertainty has led to significant concerns among businesses throughout North America. These concerns are expected to , while consumer spending may also decelerate due to higher unemployment and persistent inflation.

In fact, economists foresee weaker growth in the US economy. Even though real US GDP grew 2.8% in 2024, shows that it may decelerate to 1.8% in 2025. According to the IMF, unemployment will stand at 4.2% this year, further signaling a soft labor market.

Tariffs also will result in price increases for consumers on imported goods, likely leading to additional pressure on overall price levels. Indeed, consumer prices rose 2.7% in June compared to the previous year, potentially indicating the beginning effects of Trump鈥檚 tariff policy on inflation.

This likely will contribute to inflation remaining persistent, with estimates 听throughout 2025 of 3.0%, one percentage point above the Fed鈥檚 2.0% target. At the same time, retaliatory tariffs from other countries are expected to lessen demand for US exports. In addition to trade and policy instability, Trump鈥檚 immigration agenda could continue to impact various sectors of the economy, such as construction and agriculture, where labor supply and demand may be affected.

In this environment, a slowing US economy is likely to lead to reduced tax collection, subsequently decreasing government revenue even further. An increase in government debt is anticipated, with general government gross debt as a percentage of GDP projected to rise to 122.5% in 2025.

As for 2026, real GDP growth is expected to slow further to 1.7%. Economists also project that inflation will continue to ease, reaching 2.5%, while unemployment is likely to remain stable at 4.2%. Although these figures suggest a relatively steady outlook, there are more notable downside risks than upside ones. Persistent, or even worse, increasing trade, policy, and geopolitical uncertainties could undermine economic performance and threaten the country鈥檚 stability.

Canada

In 2024, Canada鈥檚 , with real GDP increasing by 1.5%; however, the country鈥檚 economic outlook for 2025 has weakened. Rising trade tensions with the US have contributed to a deterioration in both business and consumer sentiment, while policy uncertainty has increased. As a result, the growing 1.4%, and the unemployment rate rising to 6.6% in 2025.

Unlike the two other countries in the region, inflation in Canada is expected to ease to its 2% target in 2025. However, the Bank of Canada will likely face a challenging environment in the coming months, as upward pressure from higher import prices due to tariffs and downward pressure from falling demand could infringe upon price stability.

Looking ahead, economists project a modest recovery in macroeconomic conditions for Canada in 2026. With projected real GDP growth of 1.6%, inflation at 2.1%, and unemployment at 6.5%, the economy is expected to demonstrate enhanced resilience.

Further, the Organisation for Economic Co-operation and Development (OECD) made some recommendations for the Canadian economy to help it weather these uncertain times, including seeking diversification of trading partners, strengthening innovation to boost productivity and competition, and increasing government investment in infrastructure.

Mexico

As of the midway point of 2025, Mexico鈥檚 economy is facing a challenging outlook. In 2024, the country’s real GDP grew by 1.5%; however, , with an anticipated contraction of 0.3%. to weakened exports resulting from tariffs, as well as restrained public consumption and investment.

The IMF鈥檚 forecasts also suggest that private consumption may be supported by moderate unemployment (3.8%) and declining inflation (3.5%) in 2025. Still, while unemployment is anticipated to remain at relatively low levels, this figure represents an increase from last year鈥檚 level. Also, while investment is aided by lower interest rates it is expected to recover only gradually amid persistent concerns that include geopolitical tensions and domestic uncertainty from policy changes and reforms.

Further out, a recovery for the Mexican economy is anticipated in 2026, with real GDP projected to grow by 1.4% after the previous year鈥檚 contraction. The labor market is forecasted to hold stable, with the unemployment rate standing at 3.8% in the same period. However, inflation is likely to persist at 3.2%, remaining above its target level.

The OECD has outlined several recommendations for Mexico as well, including improving property tax collection and digitalizing tax administration to grow government revenue. Conducting cost-benefit analyses could improve the efficiency of public spending; and creating regulations that encourage private investment in renewable energy could allow the country to leverage its natural resources and gain competitive advantage.

The future of the North America trading bloc

The economic performance of North America in 2025 is increasingly clouded by rising policy uncertainty and commercial tensions between the three member countries. is projected to slow to 1.6% in 2025 鈥� a percentage point lower than in 2024 鈥� as each country contends with unique challenges and the broader consequences of escalating trade disputes.

The imposition of new tariffs by the Trump administration has reverberated across the North American region, straining longstanding trade relationships and introducing additional volatility for businesses and individuals. These developments risk undermining the progress achieved under trade agreements such as NAFTA and its successor, the USMCA, which were designed to foster regional integration and collective growth. With the coming renegotiation of the USMCA in July 2026, the future of North American economic cooperation hangs in the balance.

By 2026, for the entire North American region. However, this outlook is contingent upon the resolution of the ongoing tariff disputes and successful renegotiation of the USMCA. Achieving agreements that address the United States鈥� trade deficit with each respective country remains a key priority for President Trump, as does advancing other significant agenda items, such as enhancing collaboration on immigration 鈥� particularly along the US/Mexican border 鈥� and increasing efforts to combat drug cartels in Mexico.

While it is very hard to predict what will happen in the coming months (let alone the next year) for North America, what is certain is that sustained dialogue and cooperation among the three countries will be essential to preserving the benefits of regional integration, restoring investor confidence, and promoting shared prosperity in the months and years ahead.

For more on the current trading environment, check out the 成人VR视频 Institute鈥檚听2025 Tariff Survey here

Key insights:

• • • Accelerating bank-fintech partnerships 鈥� Acting Comptroller Hood emphasized the importance of innovation in the financial sector, advocating for more freedom for fintech companies and encouraging banks to engage responsibly with digital assets.

    • Advancing financial inclusion 鈥� Hood said he passionately supports initiatives aimed at increasing capital access for underserved communities and promoting economic participation, highlighting financial inclusion as a critical civil rights issue.

    • Modernizing regulation to stimulate growth 鈥� The Acting Comptroller stresses the need for individualized, risk-based supervision and reducing regulatory burdens to unleash growth in the financial sector.

In February, Rodney E. Hood, former chair of the National Credit Union Administration Board, became the first African American to be name Acting Comptroller of the Currency. And although his historic appointment may be temporary 鈥� as Jonathan Gould is undergoing hearings for the permanent position 鈥� Acting Comptroller Hood is living up to his assertion that, 鈥�Acting does not mean inactive.鈥�

At the June U.S. Chamber of Commerce Capital Markets Forum, Acting Comptroller Hood for the regulatory agenda of the Office of the Comptroller of the Currency (OCC), which included these highlights:

Ready all players: Green lights for crypto & fintech

The first two of Acting Comptroller Hood鈥檚 cited priorities focused on innovation: first, by allowing fintech firms to operate more freely; and second, by expanding the ability for banks to hold digital and cryptocurrency assets.

He cited his desire to focus on 鈥渁ccelerating bank-fintech partnerships,鈥� adding that 鈥渋nnovation is the currency of progress.鈥� He also encouraged 鈥渆xpanding responsible engagement with digital assets鈥� by participating in “the architecture of a new financial frontier.鈥�

These priorities represent a full turn towards the modernization of the financial system, as it seems that the government now is recognizing that these technologies are not going away. Renewing and updating the regulations surrounding these issues is better than trying to put 鈥渘ew wine in old wineskins.鈥� Simply put, when new things emerge, we need to create new ways to govern them.

Further, Hood also indicated his passionate support for initiatives designed for financial inclusion, capital access for underserved communities, and fuller economic participation. 鈥淔inancial inclusion is the civil rights issue of our time,鈥� Hood said, adding that viewing fintech companies as a way to help underserved people access banking services is critical.

In the speech, Hood mentioned modernizing regulations as his last major initiative, perhaps for impact. He hailed regulatory rightsizing as one of the OCC鈥檚 most consequential priorities, noting that each financial institution requires individualized, risk-based supervision, not a one-size-fits-all approach. (Interestingly, on the OCC website under the , however, reducing regulatory burden is listed first, indicating its true place in the priority matrix.

Modernizing regulation to unleash growth

Overall, each of Hood鈥檚 main points send us the same direction 鈥� toward modernization of the US financial system via new technologies and markets, and by opening up more ways for financial institutions to move money.

While nothing here points to reducing requirements around anti-financial crime regimes, the effect of this loosening of the spigot likely will introduce new and divergent risks into many financial institutions. The logic behind this is simple: more products, more ways to move money, and more customers is a formula that adds to proportionate increases in risk. Illicit actors are sure to be standing ready to take advantage of the situation.

Indeed, smart financial services companies will keep anti-financial crime efforts front-and-center, empowering their traditional lines of defense to ensure that business growth is from legitimate customers operating legal enterprises. One area that will affect financial crimes departments is the . This typically refers to customers or businesses that are legal but may be considered unsavory, such as firearms or adult entertainment.

Economics and opinions aside, financial crimes teams are overwhelmed and the winds are blowing more work in their direction. Monitoring legitimate businesses by applying the same kind of due diligence standards meant to stem the flow of criminal money creates more noise. Although it is possible to collate funds from illicit activity into a business that already walks close to the line of legality, being classified as high-risk is hardly a good way to evade scrutiny. These businesses will remain high-risk for reasons unrelated to reputational risk, and financial crimes teams will still review them for unusual behavior rather than because of a moral judgement.

Hood also discussed reassessing capital requirements so that such standards are not excessive. This 鈥� while it could contribute to shaky institutions that grow artificially large and risk collapse 鈥� could also just be a great way to stimulate investment in the sector. The proof will be evident over the next couple of years.

Combining all these elements that Hood outlined draws an interesting picture. Fintechs are going to be empowered to onboard new customers, especially because so many people are underbanked. At the same time, banks will be required to keep less capital on hand and will be free to lend out more to a broader definition of qualified borrowers. Speculative digital assets and cryptocurrencies will now be on the balance sheets of these same banks with fewer capital requirements.

Assessing each bank with a tailor-made, risk-based approach is wonderful in theory but in reality, it requires time, effort, and expertise. A flood of innovation and capital may continuously stimulate the economy and become the so-called rising tide that lifts all ships; but there are other potential futures that do not look quite as rosy. For example, the financial services sector could find itself drowning in customers, unable to keep up with the many requirements that will inevitably stay in place.

What can the financial industry do in response?

Innovation in the banking sector means the same in the criminal sector, and we must continue to strive for innovation in areas of law enforcement, intelligence, and anti-crime. Institution leaders need to consider acquiring targeted technological tools to make team members more powerful.

AI and automation may take away some entry-level jobs, and people must become adept at leveraging new tools and honing stronger skills to stay competitive. In collaboration with automated systems, people can do more, better. This means institutions鈥� compliance & risk departments, as always, must continuously train workers to stay at the cutting edge of required skillsets.

Additionally, institutions should find new ways to intelligently target criminal networks instead of just monitoring and reviewing the typical big, unusual, or fast transaction patterns. Behavioral typologies, intelligence analysis of where money is used in supporting illegal activity, and a better understanding of the humans involved, are all available to a department willing to innovate. At this point, banks and other financial services institutions cannot let the criminals out-think the financial industry.

When we hear that an administration hopes to remove regulations and shrink government, we think there will be fewer jobs in compliance. Yet, the opposite is likely true, since these priorities signal a shift to making it easier for financial institutions to do business, exploit digital technologies, and add customers. Naturally, the combination leads to increased volumes in risk, and therefore, the work of risk & compliance professionals remains important and massive.

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Purpose-built public safety training facility

The Town of Gilbert鈥檚 $86 million, prepares current and future first responders in their local environment, blending element-specific training and immersive technology. The training prepares first responders for a wide range of potential scenarios they may encounter across the nearly 200,000 calls for service received by Gilbert each year. Prior to the facilities implementation, the town鈥檚 first responders spent more than 4,000 hours off post each year, traveling to receive training in different communities. Not only can these first responders now train locally, but these facilities are also a hub for training volunteers and aspiring first responders from throughout the state and region.

For example, the Gilbert Fire Department hosts a three-week internship program as a part of their firefighter recruitment program, in addition to co-hosting with the Gilbert Police Department a four-day for high school-aged girls interested in the public safety field. A Cadet Program and train adults and volunteers who may be interested in becoming professional firefighters or volunteering in post-incident recovery, respectively. The Gilbert Police Department created the Gilbert Police Regional Academy following the implementation of this space, a multi-community collaborative recruit training program that serves Phoenix-area partner agencies. The police department anticipates bringing more than 200 new recruits into the department by 2030.

Cutting-edge training tools and technology

The purpose-built nature of the space allows police and firefighters to train in realistic environments. The facility includes a 46,000-square-foot pair of indoor shooting ranges that support low-light and vehicle-based training in a lead-free, soundproof environment. The facility utilizes a pressure system to eliminate smoke within sixty seconds of rounds being fired and even 鈥� with nearly 12,000 pounds of brass bullet casings and 6,000 pounds of frangible powder having been recycled over the past two years. Access to a high-quality indoor training facility in the harsh desert climate has led to a high demand for this space from surrounding law enforcement agencies, as well.

A simulated rail incident on the public safety training center campus allows the fire department to train with the specific type of equipment that transports nearly 70% of hazardous materials in the US. Also, a serpentine driving track provides public safety personnel with a safe environment to learn and refine emergency vehicle driving techniques and pursuit tactics, such as utilizing or deploying grapplers.

In addition to providing enhanced facilities for on-the-scene first responders, the Town of Gilbert has invested in facilities for those professionals who provide crucial support off-scene in their Emergency Operations Center (EOC) and 911 Dispatch center. There has been , ensuring that they receive the appropriate benefits and mental health resources to manage the high stress and trauma of triaging a wide variety of emergencies. From 2023 to 2024, Gilbert鈥檚 EOC was remodeled at a cost of $7.7 million and the 911 Dispatch center was remodeled, doubled in size, and equipped with cutting-edge technology at a cost of $11 million.

The now emphasizes wellness in design by incorporating art and function. While functionally, the center more than doubled in size to 10,500 square feet with 19 dispatch consoles and room for five more; technology-wise, the center also features Cloud CAD, Next Gen 911, updated radio consoles, and flex-use training spaces with the actual consoles that future dispatchers will utilize.

Further, elements promoting art and wellness such as circadian rhythm lighting, solar tubes that bring in natural lighting, biophilia through plants and green walls, and a high-tech air purification system make a stressful environment more physically inviting.

The Town of Gilbert has demonstrated significant care for the well-being of its employees, too. Off of the Dispatch floor are wellness rooms with red-light and massage therapy machines and a fitness center. The town鈥檚 allows new parents to bring their infants to work for the first six months of their life, with specialized baby rooms and nursing suites available just steps away from parents. This not only relieves stress for new parents, but also helps them better connect as a team.

Immersive and inclusive public safety training

Gilbert鈥檚 Police, Fire, and Parks & Recreation Departments are , which ensures that 80% or more of the employees within these departments are trained to communicate with and respond to community members on the autism spectrum. The Police Department also utilizes to train first responders in real-time decision making, as well as through a specialized Autism Awareness V-VICTA program developed in partnership with the Southwest Autism Research and Resource Center.

The Police Department also offers their , a confidential program by which family members or caregivers can provide law enforcement with information to build a confidential profile for individuals on the autism spectrum, which may include a photo, information about sensory triggers, fears, interests, and communication preferences. Further, the Gilbert Police and Fire Departments jointly host each Spring, offering family members an opportunity to introduce children on the autism spectrum to first responders in a low-stakes, non-emergency environment. Individuals can ride along in a fire truck, experience a police traffic stop, see fire gear up close, and more.

The goal of these educational efforts is to elevate the level of service which first responders offer to all community members and to create opportunities for individuals on the autism spectrum to bond with first responders before a crisis occurs.

Indeed, the Town of Gilbert鈥檚 mission is to . If this were not evident enough from its thoughtful and intentional investments in public safety infrastructure and community-facing partnerships, the forthcoming is a living embodiment of this mission. The Advocacy Center, slated to open in 2026, is a place for crime victims to recover from trauma and navigate the justice process. The facility will feature trauma-informed design in its architectural design and consider user experience first and foremost. The space will offer forensic interview rooms, private counseling rooms, group therapy spaces, victim advocate space, and more.

Through this type of intentional investment and innovation, the Town of Gilbert is not only preparing for the future needs of its own population, but it鈥檚 setting a high standard for the future of public safety.

Photos courtesy of the Town of Gilbert

You can find out more about how听law enforcement is using advanced technology in their efforts to fight crime and serve the public听here