Uncertain Times, Certain Investment: Doubling Down on Risk Tech

In today's global economy, the fluid tariff situation has created one undeniable reality: uncertainty is increasing. This unpredictability is pushing financial services firms to prioritize resilience and risk management — and invest in technology that will increase it. In this fluctuating trade environment, financial institutions face:

• Heightened credit risk as business clients navigate supply chain disruptions
• Increased financial market volatility from rapidly shifting trade policies
• Growing probability of economic contraction in both domestic and global markets

While all the back and forth on tariffs has made it hard to decide on specific adjustments in credit policies, production levels and supply chains, it has pushed risk management to the forefront of executive priorities.

Continuing Investment

While conventional wisdom might suggest technology investment would contract during uncertain times, it is time to invest in risk management technology. Cost reduction remains paramount for building resilience, and risk executives are pursuing this goal through technology acceleration rather than austerity.

In Celent's 2025 survey of 230 financial services risk executives, artificial intelligence emerged as their dominant priority. When asked about specific applications, the results revealed a telling strategic focus:

• 47% ranked AI for efficiency among their top three priorities • 35% prioritized AI for effectiveness among their top three initiatives

This efficiency-first approach demonstrates how institutions are leveraging technology to simultaneously strengthen risk capabilities while controlling costs—a dual imperative in the current environment.

Three Risk Technology Priorities

While not all risk technology investments are sacrosanct as financial firms conserve their resources, there are three core areas where technology investment is likely to accelerate despite—or rather because of—current uncertainties:

1. Cost Containment Through Intelligent Automation

Banks are already investing in AI-powered automation to reduce manual workloads across compliance, investigations, and regulatory change management. Cloud migration is dramatically lowering the costs of the data management infrastructure that underpins advanced risk analytics, and AI driven process intelligence targets inefficiencies and duplication of controls. These targeted technology investments that deliver immediate efficiency gains should continue.

2. Organizational Resilience through GRC

Recent years have seen substantial investment in Governance, Risk, and Compliance (GRC) platforms due to regulations like DORA and the UK’s Operational Resilience Framework. Banks particularly have a technological foundation specifically focused on maintaining critical services in the face of unforeseen threats. This foundation provides improved adaptability, greater visibility into operational vulnerabilities, and the capability to model and mitigate emerging risks as they arise. While already the focus of the second line of defense, in many banks these systems are just being fully embraced by the first line. Change management programs can accelerate first line adoption as the chance of unforeseen disruptions increases.

3. Mitigating Fraud and Default Risk

The increased probability of economic contraction elevates certain risk categories that banks are already addressing through AI and advanced analytics. Machine learning algorithms can detect subtle patterns in transaction data that identify emerging fraud threats. Predictive models identify early warning signs of credit deterioration across customer portfolios and real-time analytics can continuously reassess counterparty risk as trade conditions evolve. These capabilities should be enhanced, rather than scaled back, as the possibility of a recession looms, as both fraud attempts and credit defaults increase in recession.

In conclusion, this climate of sustained uncertainty calls for more technology investment in the functions that safeguard financial institutions from emerging threats. Financial institutions that accelerate their risk technology investments now will not only weather the current volatility more effectively but will emerge with structural advantages that persist long after the current tariff uncertainties have stabilized. For forward-thinking risk executives, the question isn't whether to invest in technology during uncertain times—but rather how to invest most strategically.