CONNECT MAGAZINE - ISSUE 7 by cefpro

100 DAYS OF TRUMP

Money, Money, Money: As the first quarter of the second coming of Trump draws to a close, Connect Magazine guest editor Joseph Posavec asks what his first 100 days tell us about the future

The Hidden Ideology in the Oval Office: Alice Kelly examines the psychology of Trump’s ‘America First’ approach to global economics

Riders On The Storm: Tariffs and trade wars – we look at the potentially bumpy ride ahead for geopolitics and macroeconomics

Is Regulation Stifling Sustainable Investing:

Søren Agergaard Andersen on how an increasingly complex regulatory environment could suffocate investment innovation

connect.cefpro.com/magazines

FOREWORD

Trump – The First 100 Days

With barely a moment to draw breath in a century of days in office, guest editor Joseph Posavec looks at a whirlwind of Oval Office activity, but urges caution rushing to judgment

CRISIS CAPITALISM - COULD REGULATORY CHAOS CRUSH SUSTAINABLE INVESTING?

TREND ALERT

In the aftermath of the new tariff policy announced by Donald Trump, we look at the trends that risk professionals can expect to see as a result

TRUMP’S TARIFF TANGO: STRATEGIC NEGOTIATION OR MESSY MARKET MANIPULATION?

As Democrats call for an inquiry into accusations of market manipulation, Irina Norris asks whether Trump’s tariff policy is clear evidence or modelling, or a masterstroke of strategic negotiation

Irina Norris is Head of Production at The Center for Financial Professionals 06

Søren Agergaard Andersen asks whether an increasingly complex regulatory climate is in danger of suffocating the innovation needed to drive a sustainable approach to investment

Søren Agergaard Andersen is Chief Risk and Compliance Officer at Copenhagen Infrastructure Partners and was previously Chief Risk Officer at Nordea Asset Management

NEWS IN REVIEW

TRUMP’S TRADE WAR 2.0: A TIMEBOMB FOR TRANSATLANTIC FINANCE

Less than 100 days into his presidency, Donald Trump has ignited fears of a global trade war that could have seismic global implications

Mark Norman is Head of Content at The Center for Financial Professionals 10

DECODING TRUMP’S TARIFF TUG-OF-WAR: THE HIDDEN IDEOLOGY BEHIND THE ECONOMIC BLUSTER

Not surprisingly, the storm of tariffs announced by Donald Trump in the last month have dominated the media headlines. But some commentators believe there’s a hidden ideology at play that we all need to understand

Alice Kelly is Event Programme Director at The Center for Financial Professionals

100 DAYS OF TRUMP - NEW ADMINISTRATION, NEW PRIORITIES FOR U.S. BANKING

Joe Posavec looks at the first 100 days of the new White House administration, examines what has changed, and explains why a rush to judgment now would be illtimed

Joseph Posevic is Executive Vice President at Bank Credit Risk Solutions in Irvine, California

THE DEMYSTIFICATION OF AI IN FRAUD DETECTION AND MODEL RISK MANAGEMENT

A view from the floor –Abhishek Gupta on how our recent Advanced Model Risk event from CeFPro helped to lift the veil on understanding and applying Transformers in MRM

Abhishek Gupta, Head of Model Risk Management and Enterprise Risk Reporting, Metropolitan Commercial Bank

WHY OPEN BANKING IS A TRUST DISASTER WAITING TO HAPPEN

Adam Ennamli explores how open banking, despite regulatory maturity and advanced technology, continues to face a trust deficit driven by customer uncertainty.

Adam Ennamli is the Chief Risk, Compliance and Security Officer at the General Bank of Canada

Our 3-minute read catches you up on some of the news stories and events that have been on the risk news agenda around the world over the last month

ONSTAGE: KEY VOICES TO WATCH

Each month we introduce you to some of the keynote speakers who’ll be sharing their expertise and insight with you during our 2025 event programme 34

FINTECH LEADERS 2025 SUMMARY

Our new monthly feature presents a visual at-aglance view of current trends in risk management within financial services.

ADVERTORIAL Risk By Exception: The New Era of AI-Powered TPRM Jag Lamba, CEO and Founder, Certa 38

SPOTLIGHT ON RISK CAREERS

Chandrakant Maheshwari launches our new regular monthly series that will feature insight, expertise and knowledge from leading professionals on the best route to career success. 54

Got ideas shaping the future of risk, finance, or innovation? Share your expertise with a global network of financial professionals.

Contribute to Connect Magazine and position yourself as a thought leader in the industry.

Publisher Andreas Simou

Managing Director CeFPro andreas.simou@cefpro.com

Marketing

Editor Mark Norman Head of Content CeFPro mark.norman@cefpro.com

Ellie Dowsett Content and Media Marketing Manager CeFPro ellie.dowsett@cefpro.com

Sales & Advertising

Chris Simou Head of Sales CeFPro chris.simou@cefpro.com

Design Natasha Marino Head of Design CeFPro natasha@cefpro.com

Editor TRUMP – The First 100 Days

Guest

Joe Posavec EVP Bank Credit Risk Solutions Newmark Valuation & Advisory

As the new U.S. administration crosses its 100-day threshold, the banking industry finds itself at a pivotal juncture.

Early policy signals and regulatory adjustments have already begun reshaping the compliance landscape, prompting both optimism and caution among financial institutions.

The proposed changes to agency enforcement framework, rollback of consumer protection overreach and climate-related financial risk, the tone from Washington suggests a shift in priorities that could reverberate across the sector for years to come.

Yet, while this initial timeframe may offer a glimpse into the administration’s direction, it remains too early to assess the ultimate impact on the industry.

As institutions strive to adapt to evolving expectations, the coming months will be critical in determining how these pivots unfold in practice, and whether they will foster stability, innovation, and trust in the financial system—or introduce new complexities and challenges.

administration, their implications for regulatory compliance, and a snapshot of what to watch for as the policy landscape continues to evolve.

Elsewhere in this issue, we look at why financial institutions need to understand the issues at the heart of Trump’s economic ideology, and why his Trade War 2.0 approach spells a turbulent future, at least in the short term, for global macroeconomics.

You can also read Søren Agergaard Andersen’s thoughts on how regulatory chaos threatens the future of sustainable investing, why Adam Ennamli worries that open banking might just be a trust disaster waiting to happen, and how Alvaro Guevara believes model risk governance is driving innovation in Costa Rica.

I hope you enjoy this edition of the magazine. The next issue will be out on May 20. Magazine team

In my article as guest editor for this month’s edition of Connect Magazine, I explore the early moves of the

If you’d like to guest edit a future edition of Connect Magazine, are interested in contributing a thought leadership article for an upcoming issue, or think advertising with us may help drive your organization’s competitive advantage, please get in touch. All our contact details are opposite.

TRUMP’S TARIFF TANGO

Strategic Negotiation or Messy Market Manipulation?

Irina Norris Head of Production

The Center for Financial Professionals

It’s no exaggeration to say that Donald Trump’s announcement on April 2 – less than 100 days into his presidency – of sweeping global import tariffs caused economic tremors of earth-shuddering proportions.

Given his inclination to punch hard and fast, the worldwide consternation that followed was, arguably, precisely what America’s new Commander-in-Chief would have been hoping for.

But if he was looking to catch the world off-guard again, he couldn’t have done it in more seismic fashion than he did just 8 days later when he suddenly and unexpectedly pressed the pause button.

The announcement of a 90-day suspension of certain tariffs while simultaneously escalating duties on Chinese imports to an unprecedented 125% has been met with both praise

and criticism (depending on where you stand on economic policy, of course) and raises questions about its economic implications and the President’s influence on market behavior.

Proponents of the tariff suspension argue that the 90-day pause provides a crucial window for renegotiating trade agreements with key allies.

Temporarily easing tensions with countries such as Canada and Mexico is being interpreted in some quarters as the administration being seen to foster goodwill and create an environment conducive to more favorable trade terms.

This is the narrative promulgated by Treasury Secretary Scott Bessent when he emphasized that the hiatus is intended to facilitate ongoing negotiations without the immediate pressure of escalating tariffs.

Conversely, the White House claims the decision to impose a 125% tariff on Chinese goods is framed as a necessary measure to address longstanding trade imbalances and intellectual property concerns.

The administration contends that China’s trade practices have long been detrimental to American industries and therefore warrant a robust response.

According to the Wall Street Journal, writing on the day the increased levy was announced, this aggressive stance is intended to compel Beijing to adhere to fair trade norms and protect U.S. economic interests.

Critics, however, view these actions as a perilous gamble that could exacerbate economic instability, saying the abrupt increase in tariffs on Chinese imports risks escalating the ongoing trade war, potentially leading to retaliatory measures that could harm American exporters and consumers.

Many economists warn that such moves may disrupt global supply chains, increase production costs, and ultimately result in higher prices for consumers.

The Federal Reserve was quick to express concerns that the increased tariffs could contribute to more persistent inflationary pressures, complicating monetary policy decisions.

Further fueling the controversy are President Trump’s social media pronouncements encouraging investors to view the tariff pause as a buying opportunity.

In an online post following the announcement of the tariff suspension, he declared, “THIS IS A GREAT TIME TO BUY!!!” prompting a historic market rally. The S&P 500

surged 9.5%, the Dow Jones Industrial Average climbed 7.9%, and the Nasdaq experienced a remarkable 12.2% gain.

While some investors welcomed the surge, others raised alarms over potential market manipulation.

Legal experts suggest that a sitting president’s direct influence on market behavior through public statements straddles a precarious ethical line.

The Securities and Exchange Commission (SEC) traditionally scrutinizes actions that could be construed as attempts to manipulate market conditions.

In this context, Trump’s exhortations to buy stocks, coupled with policy shifts that directly impact market dynamics, sparked widespread calls for regulatory review.

The broader implications of these tariff maneuvers extend beyond immediate market reactions, however.

Businesses, and particularly retailers reliant on imported goods, face heightened uncertainty, with

companies like Walmart already having to navigate the complexities of sudden tariff changes, balancing cost management with the need to maintain competitive pricing.

Consumers, too, are feeling the ripple effects. Anticipating price increases due to higher import costs, many are rushing to purchase goods before tariffs take full effect.

This behavior mirrors patterns observed during previous economic uncertainties, where stockpiling became a common response to anticipated shortages or price hikes.

As the 90-day pause unfolds, the administration’s next steps will be closely scrutinized. The delicate balance between leveraging tariffs as a negotiation tool and mitigating potential economic fallout remains precarious.

Meanwhile, outside America’s borders, the international community holds its breath and looks on, waiting to assess the full consequences for global trade dynamics of Trump’s latest economic power-play.

TRUMP’S TRADE WAR 2.0

A Timebomb for Transatlantic Finance

Donald Trump’s sweeping tariffs on European imports – announced just 73 days into his second presidency – have reignited fears of a transatlantic trade war.

Markets have already responded with sharp selloffs and renewed volatility, but the real story may be slower-burning and more dangerous: the long-term risk implications for financial institutions in both the US and Europe.

While tariffs may be framed as tools of economic nationalism, they act more like financial accelerants, fanning the flames of inflation, disrupting global supply chains, and reshaping the risk landscape that banks and insurers must now navigate.

From a macroeconomic perspective, tariffs function as indirect tax hikes on consumers and businesses.

Prices rise, consumption drops, and central banks are forced to rethink their already fragile monetary policy roadmaps.

In the US, the Federal Reserve faces a conundrum: cut rates to cushion demand and risk fuelling inflation, or hold steady and risk choking off growth.

European institutions, meanwhile, face the added challenge of currency volatility and capital outflows, particularly if the Euro weakens in response to protectionist measures. This macro instability directly feeds into financial sector risk.

According to the European Central Bank’s Financial Stability Review, sudden shifts in global trade dynamics can lead to ‘sharp repricing of risk premia and contagion across markets’ (ECB, 2024).

US and European banks, already contending with thinning net interest margins and increased capital adequacy expectations, must now factor in geopolitical friction as a baseline scenario—not an outlier.

Mark Norman is Head of Content at the Centre for Financial Professionals

Operational and Reputational Fallout

Beyond market risk, the resurgence of tariffs presents operational complications. Multinational banks with cross-border business models may face higher costs as client portfolios are restructured in light of new tariffs.

Treasury and trade finance divisions are likely to see immediate knockon effects as companies begin to reassess their import/export exposure.

Compliance teams, too, will be burdened with interpreting and enforcing new regulatory constraints tied to tariff classification and sanctioned counterparties.

Increased complexity brings elevated risk of errors – and with it, the threat of reputational damage. A bank that fails to properly guide clients through trade adjustments, or misjudges its own counterparty exposure, could find itself at the centre of unwanted headlines.

Moreover, institutions operating across jurisdictions may face accusations of taking sides politically, especially if retaliatory tariffs become a political football in Brussels or Washington.

Many commentators suggest that Trump’s inclination to rhetoric also heightens customer risk. Business confidence, already shaken by years of post-pandemic uncertainty, is again entering a period of hesitation. Small and medium enterprises –often the most vulnerable to trade disruptions – may see credit ratings deteriorate, placing pressure on loan books and provisioning levels.

In Europe, this is particularly acute in its traditional export-reliant sectors such as automotive and machinery, where financing and leasing arrangements often rely on stable trade flows and a long line of sight on potentially dangerous economic headwinds.

The Longer View: Fragmentation and Financial Nationalism

The broader danger may lie in the normalization of economic isolationism. If tariffs become a default tool of economic policy rather than a last resort, then it would seem prudent for financial institutions to prepare for a long-term future marked by fragmentation rather than integration.

Cross-border lending, foreign exchange services, and even interbank settlements could be reshaped by new forms of protectionism. The resulting environment is not just one of volatility, but of structurally higher friction.

This is not theoretical. The Bank for International Settlements has warned that ‘fragmented markets create inefficiencies that can amplify systemic risks in times of stress’ (BIS, 2023).

For global financial institutions, this could mean investing more heavily in regional compliance regimes, decoupling risk models across jurisdictions, and preparing for reduced fungibility of capital.

If the 2008 financial crisis taught banks the importance of liquidity, and the 2020 pandemic stressed the value of resilience, then this next chapter is about adaptability – how well institutions can reposition themselves in a world where protectionism and populism increasingly dictate the rules of the game.

Trump’s tariffs may seem like a policy move aimed at steel, cars, and agriculture, but their ripple effects will stretch far deeper and be felt far more excoriatingly well beyond their intended and immediate flashpoints.

Financial institutions that fail to grasp their structural implications may find themselves, once again, caught unprepared in the fallout of a crisis not of their making – but very much their ball to carry forward.

Decoding Trump’s

Tariff Tug-of-War: The Hidden Ideology Behind the Economic Bluster

Donald Trump’s recent barrage of tariffs on European imports has triggered immediate economic angst and geopolitical friction, but what has so far been poorly understood is the deeper ideological play embedded in his rhetoric.

While the media headlines scream about steel, cars, and retaliatory measures, the subtext of Trump’s language offers more than transactional outrage – it signals a recalibration of how the U.S. views its economic alliances and a direct challenge to the global world order.

Gillian Tett, writing in the Financial Times, has long argued that Trump’s economic messages must be read not just through the lens of policy but as acts of narrative warfare.

Trump’s framing of tariffs as ‘fairness’ and ‘reciprocity’ taps into cultural and psychological fault lines that go far beyond trade imbalances.

It crafts a vision of economic nationalism as moral restitution, casting American decline not as a result of structural shifts, but as a betrayal by global institutions and foreign powers.

Quinn Slobodian, in his media commentary and broader scholarship, ties this to a deeper ideological shift – one that challenges the postwar liberal economic order itself.

Trump’s protectionism is not just a policy tool, Slobodian argues, but part of a populist movement to reassert sovereign control over economic destiny.

Tariffs, in this context, become both weapon and symbol: a rebuke of the World Trade Organization (WTO), a rejection of multilateralism, and a rallying cry to a highly vocal bloc of voters convinced that economic rules have long favoured foreign elites over domestic workers.

Alice Kelly is Event Programme Director at The Center for Financial Professionals

The result is a new kind of geopolitical theatre, where tariffs are less about immediate impact and more about long-term narrative framing.

When Trump speaks of ‘unfair’ European trade policies or ‘taking back control’, he’s not just negotiating – it’s a declaration of ideological insurgency.

Understanding this context is crucial for financial professionals because it alters how policy risk should be interpreted.

The fundamental point here, and one that anyone and everyone in financial services needs to understand is it’s not just the numbers or sectors affected – it’s the playbook itself that’s changing.

From Trade Policy to Operational Threat

For financial institutions, this ideological shift presents serious short- and long-term risks. On the surface, tariffs drive volatility. Markets

respond with panic, currencies wobble, and investors seek safe havens.

But the deeper concern is what this says about the reliability of global frameworks – and how it tests that.

European institutions, in particular, must wrestle with the erosion of trust in post-war economic cooperation.

If the U.S. is now willing to unilaterally impose trade barriers on its oldest allies, then the fundamental assumption of transatlantic economic stability no longer holds. It becomes, quite literally, a case of everything you thought you knew is wrong.

This uncertainty bleeds into credit models, supply chain assessments, and customer risk profiles in ways that are difficult to quantify but impossible to ignore.

Operationally, financial organizations will be forced to revisit exposure

maps. Whether it’s loans to exporters, the underwriting of European manufacturers, or FX risk associated with Euro-Dollar fluctuations, the fallout from Trump’s tariffs is not confined to front-page economics.

It filters through compliance departments, risk management models, and client communications in complex and often unpredictable ways.

Moreover, the customer perception of economic instability – particularly among SME exporters – could lead to tightened liquidity conditions, weakened business sentiment, and increased defaults. This is not just market noise; it’s an environment shift that redefines the rules that banks and insurers thought they were playing by.

Three takeaways

So, what now? How can risk professionals respond when the hazard isn’t just tariffs, but the ideological unpredictability driving them?

First, they must build scenario planning around political intent, not just economic outcome. Understanding the philosophy behind policy is now a core competence. It’s not enough to model for impact; institutions must assess motive and likelihood in equal measure.

Second, they need to reassess geographic exposure beyond balance sheets. Trump’s policies target allies precisely because those relationships were once viewed as safe. Risk models must reflect that this safety is now conditional, contingent on political sentiment rather than economic logic.

Third, they must become internal diplomats – communicating the nuance of these risks not just upwards to boards and committees, but laterally across departments. Risk is no longer siloed. It’s strategic. It’s reputational. It’s existential.

In the world Trump is remaking –where tariffs double as political slogans – risk professionals must do more than insulate.

They must translate, contextualise, and prepare their organisations to survive not just economic turbulence, but a hurricane of ideology.

Recession or Recovery? Gain the Insights That Matter at Risk

Americas

May 19-21, 2025 | NYC

The global economy is shifting like never before.

With escalating tariffs, rising inflation, and mounting geopolitical tensions, uncertainty looms over whether a recession will strike in 2025.

For financial professionals, understanding these risks isn’t just important - it’s essential.

With industry-leading insights and actionable strategies, Risk Americas is your opportunity to prepare for what’s next. Miss out, and risk falling behind in today’s unpredictable climate.

100+ Speakers

80+ Sessions

300+ Attendees

Keynote session

Tendayi Kapfidze

Wells Fargo Chief Economist tackles geopolitical and macroeconomic risks driving market volatility.

Nicholas Silitch

Expert panels

Craig W. Broderick

Former CROs of Prudential and Goldman Sachs share lessons from navigating extreme lows during the Great Recession and COVID.

Targeted streams

Volatility and Macroeconomic Environment & Liquidity and Treasury Risk - Discover and explore strategies for thriving in uncertain times

Find out more >

BEYOND THE NOW

5 Trends to Expect from Trump’s Trade War

Donald Trump’s sweeping new tariff regime is not just rattling global trade – it’s set to reshape the terrain of financial services as we know it.

As markets react and global economic sentiment shifts, banks, asset managers, and insurers are all bracing for impact. From choked credit channels to rising operational costs, the effects are expected to be far-reaching, with reverberations that could redefine strategic planning for years to come.

At the heart of this is a wave of uncertainty. Tariffs on Chinese, European, and Mexican goods – some reaching as high as 60% and, in China’s case, more than 100% - are pushing up prices, slowing trade, and triggering fears of a global slowdown.

Financial institutions, as both bellwethers and beneficiaries of economic cycles, find themselves squarely on the frontline of this policy upheaval.

01 SLOWDOWN IN LOAN GROWTH & WEAKENING OF CREDIT QUALITY

The first clear trend is a projected slowdown in loan growth and weakening of credit quality. As Reuters reported, economic uncertainty has already dampened consumer and business confidence.

Capital investment is pulling back, and many borrowers are becoming more cautious. For banks, this means not only reduced demand for new credit, but also elevated risk of default from existing clients.

What this means, in practical terms, is that institutions are likely to respond by tightening lending standards, further constraining economic activity.

02 INVESTMENT

BANKING ACTIVITY IS DECLINING

Simultaneously, investment banking activity is declining, particularly in the mergers and acquisitions space.

Market volatility and unpredictable crossborder conditions have made deal-making more difficult and riskier.

Several proposed transactions have been shelved or delayed, with companies unwilling to make bold moves in a volatile pricing environment. For investment banks that rely on M&A fees and capital-raising mandates, this marks a significant hit to revenues and deal pipelines.

03 HEIGHTENED VOLATILITY INTO EQUITY AND FIXED INCOME MARKETS

Asset managers, too, are feeling the squeeze. The new tariffs have injected heightened volatility into equity and fixed income markets, unsettling portfolio managers and driving a shift toward safer, less productive assets.

While some volatility creates trading opportunities, excessive and sustained turbulence complicates long-term asset allocation strategies. Managers must now grapple with balancing risk, liquidity, and returns in an environment that feels increasingly reactionary and unpredictable.

04 INSURERS MAY SEE THEIR CLAIMS COSTS RISE

Meanwhile, insurers may see their claims costs rise, particularly in property and casualty lines. Tariffs on steel, aluminum, and a variety of construction materials, as well as auto parts, mean higher replacement costs for insured items.

PwC has noted that as the cost of rebuilding homes, repairing vehicles, and sourcing spare parts increases, insurers may have to either raise premiums or absorb greater losses on existing policies. In either case, underwriting margins could be squeezed.

All these trends suggest that financial institutions cannot afford to sit still. Whether it’s rethinking credit exposure, adjusting capital allocation models, recalibrating risk appetite, or hedging equity volatility, agility will be the watchword.

Institutions will also need to sharpen their geopolitical risk frameworks and scenario planning, as trade policy continues to emerge as a potent, unpredictable force in global markets.

05 A HIT TO BANK STOCK VALUATIONS

Finally, the most immediate and visible consequence is a hit to bank stock valuations. Major financial institutions have already seen their shares dip amid fears that the tariffs could ignite a wider recession.

Barron’s recently reported that investor pessimism is growing, with analysts slashing forecasts for the sector amid weaker earnings outlooks. The sector’s performance is often a proxy for broader economic health – when banks stumble, markets pay attention.

The tariffs may have been designed as a tool of economic leverage against foreign competitors, but the collateral effects on the U.S. and UK financial systems are mounting.

With traditional revenue streams under pressure and market dynamics shifting rapidly, financial leaders will need to adopt bold, strategic measures to weather what billionaire hedge fund manager Bill Ackman recently called ‘a self-induced economic nuclear winter’.

100 DAYS OF TRUMP

New Administration, New Priorities in U.S. Banking

Joe

Posavec, an Executive Vice President in the Bank Credit Risk Solutions

Specialty Practice of Newmark, has in-depth expertise with many aspects of banking, credit and regulatory compliance. Based in Irvine, California, he brings over 30 years of experience in real estate, capital markets, banking and technology to the practice.

We find ourselves at the threshold of the first one hundred days for the new administration and are compelled to evaluate how it has impacted U.S. Banking.

Their campaign zeroed in on several issues and promised reform at all levels of government. So, what does the scorecard hold on making good on these pledges?

A record number of Executive Orders were signed by the President during the first few weeks in the Oval Office and a flurry of subsequent changes continue to flow through all levels of government. The banking and financial sector oversight is also included in this dynamic agenda.

The most obvious signs point to new leadership appointments to key agencies, commitments of regulatory agencies overhaul and rollback of overreaching enforcement on several fronts.

Thus far, they have held true to their commitments and have disrupted just about every federal agency. The approach may be a bit brutal with agencies being required to make large staffing and budget cuts in a noticeably short timeframe, and some, for example CFPB, completely disseminated.

On the bank regulatory side, the key agencies are also cautiously in limbo and awaiting similar reductions and restructures.

There are two key rollbacks that have already taken place recently with direct impact to this sector. The first being the rescinded Community Reinvestment Act Final Rule that came into play in October of 2023 (FRBCRA).

This act took several years to be molded, approved, and implemented. Its removal now brings CRA requirements back to a pre-2023 era of less stringent mandates.

The second rollback occurred surrounding Climate Change Risk Scenario Analysis that has now been removed from OCC’s governance and oversight (OCC - Climate Risk Withdrawal).

This effort was the U.S. regulatory response to the ECB, and other global initiatives designed to address financial risk due to climate change in form of either transitional, or physical risk.

Scenario Analysis in its final form, was a half-hatred effort at best and only aimed at larger banks. Therefore, it’s removal should not yield a major impact to the industry.

The question now would be on how much of this oversight will default to Climate Change Risk segments of BASEL III Endgame (BIS - BASEL Final Rule - CCR).

In addition, we attempt to understand how they will apply analogous efforts to align these segments with the broader BASEL framework.

There are components within this global effort that require large financial investment into renewable energy, banks to hold reserves against

climate related risks, and procedural changes (Georgetown Law Review, Risk Allocation in Green Energy and Climate Change, 02-07-2024).

Several other changes are also anticipated as the newly elected, and appointed leaders continue their overhaul of government oversight.

The main goalseems to be one of streamlining banking surveillance and creating more transparency throughout the agency network. There is also a focus in identifying

consistent and a clearer program.

The overall impact to the industry is highly dependent on how these changes are perceived, with no shortage of opposing views.

If you agree with Morgan Stanley’s assessment of these proposed changes, it paints a picture of an invigorated financial sector, booming capital markets and strong earnings across the board (Morgan-Stanely, Research 03-18-2025).

KPMG offers a different perspective and cautions for a need of expanded stress testing to include the highly publicized trade policy shifts, political factors, social trends and geopolitical tensions.

They emphasize the fact that a new, streamlined testing approach may not fully encompass a broad enough model to include political uncertainty

have such different points of view, accurately reflects the vastly different perceptions within the industry.

In summary, these first one hundred days offer at most, a glimpse into the direction that the new administration has chosen to pursue surrounding regulatory framework of government oversight.

The banks and the rest of the financial sector have also begun to digest and analyze how these changes will impact their operations, business lines, as well as compliance priorities over the next few years.

We must caution the industry against jumping to any concrete conclusions as it is clearly too early in the process. Thus, the wait and see approach appears to be prudent for the next several months, allowing us to see where some of these changes will actually land.

CRISIS CAPITALISM

Could Regulatory Chaos Crush Sustainable Investing?

Søren Agergaard Andersen is the Chief Risk and Compliance Officer at Copenhagen Infrastructure Partners in Denmark, whom he joined in January. Prior to that he was CRO at Nordea Asset Management.

When Søren Agergaard Andersen stepped into his new role as Chief Risk and Compliance Officer at Copenhagen Infrastructure Partners (CIP) in January, he joined a company that has grown from four people to more than 1,000 in just over a decade.

With €30 billion under management and a focus on sustainable infrastructure, CIP is not only riding the green wave – it’s helping to build it. But with growth comes complexity, and in Andersen’s view, risk management is no longer about steadying the ship, it’s about adapting to constant volatility while trying to maintain operational resilience in an ecosystem that no longer plays by familiar rules.

According to Andersen, regulatory complexity is evolving faster than many financial institutions can adapt – especially those operating across jurisdictions.

“It’s certainly a very complex area,” he says, “especially when you’re establishing investments and funds or assets in multiple countries.”

frameworks, and even recommend responses.

“Imagine an AI tool saying, ‘Should I do this update, Sir?’ and I press OK, and it’s done,” he suggests.

“We’re very much a growth company,” he says. “And as such, also a company where we are finding our feet in everything we do, including compliance and risk.”

He acknowledges that his predecessors laid the groundwork, but it’s now his job to carry that forward into an era where regulatory fragmentation, geopolitical shocks, and technological disruption dominate the landscape.

He points to the inconsistent mesh of U.S. ACC regulations, Europe’s AIFMD, and various ESG disclosure frameworks as proof that there’s no single road to compliance. “We have all these things and it’s a challenge.”

Technology is at the heart of Andersen’s vision for future-proofing risk management. From regtech to generative AI, he sees promise in tools that can flag regulatory updates in real time, map them to internal

But he’s far from starry-eyed. “Maybe, as a practitioner, I need to understand what that update means,” he cautions. “The AI tool can explain that ... but I would probably need to feel confident and happy about it. I might need to have some interactions with colleagues, or management, or the board.” The challenge, he says, is trust – and intelligence.

Asked how he reconciles innovation with compliance, Andersen doesn’t pretend to have an easy answer. Measuring ESG risk across supply go for a third term, it’s not a long term issue.”

“That’s probably the most difficult question you have for me!” he says. His own answer lies in ESG. “We want long-term value creation, but we also want to do good in the world.”

But for Andersen, the solution lies in active stewardship – engaging with portfolio companies, showing up at meetings, and demanding transparency.

“Today’s world will be very hard on us if we promise something we can’t deliver,” he warns. Technology again comes into play, especially when it comes to measuring ESG risk across supply chains.

He warns that greenwashing will be punished, and that long-term trust requires radical honesty.

Turning to the year ahead, Andersen sees a number of converging threats. “Let’s just take the Trump administration,” he says. “Of course that’s a risk –but unless he tries to go for a third term, it’s not a long term issue.”

For him, the deeper issue is global disunity. “If even old allies can’t agree on things, that will be a problem for investment. That will be a problem for our value creation.”

Regulatory uncertainty is perhaps the most nebulous threat. Andersen reflects on past conversations about a ‘tsunami of regulation’ that never fully materialised, and worries the pendulum might swing again in favour of greater regulatory measures.

“We need regulation. But the sector is key to making society work – we’re not here to blow things up. We’re here to help.”

So what should risk leaders do? For Andersen, the answer lies in investment – both in technology and in people.

Regtech, AI, and smarter systems are vital, but so is building collaborative frameworks and fostering deep integration with cybersecurity and tech teams.

“Now I need to have people who can talk with the cybersecurity team and understand where we are so we can assess the risks there.”

As the financial ecosystem grows more complex and volatile, he believes only those who embrace agility, transparency, and long-term thinking will survive.

“Technology is a big factor,” he says. “It will play a very large part in helping us become even better at our jobs in the future.”

Connect to a Greener

Future:

Your ESG Resource

Sustainability is no longer optional - it's essential.

Whether you’re navigating climate risks, sustainable finance, or governance strategies, Connect is your go-to platform for cutting-edge insights.

Missed our Sustainable Finance or Climate Risk events? No problem.

Dive into a wealth of ESG-related content tailored for financial professionals. From regulatory updates to market opportunities, we provide the tools to help you lead in a rapidly evolving world.

NEWS WHAT'S BEEN HAPPENING...

Round up of news stories in April

Risk & Finance in Focus: Latest Headlines

Banking Sector Warns of Financial Sector Turmoil in Wake of Tariff Policy

President Trump’s aggressive tariff policies are raising alarms within the banking and insurance sectors. As trade tensions escalate, financial institutions face increased risks from market volatility, inflationary pressures, and potential economic slowdown. View here >

Rising Trade Tensions Expose Europe’s Alarming Reliance on US Dollar Funding View here >

SEC Drops Climate Rule as OCC Nominee Dismisses Reputational Risk View here >

Judge Slams Bank of America with $540M Penalty Over Deposit Insurance Dispute View here >

Dimon Warns of “Stormy Seas” as Tariff Chaos Threatens Banking Stability View here >

PISCES: A Gateway to Growth or a Threat to Financial Stability View here >

Trump Keeps the World Guessing with Tariff Turnaround View here >

FDIC Hands Banks the Crypto Keys Amid Warnings of Regulatory Backsliding View here >

Critics Warn of Risky Overreach as Deutsche Bank Throws Open Its Digital Gates View here >

First AI Native City

Abu Dhabi Vies to Become World’s

Abu Dhabi has unveiled an ambitious

$3.54 billion initiative to transform itself into the world’s first fully AI-native government by 2027. This strategy aims to automate all government processes, deploy over 200 AI solutions across various sectors, and significantly boost the emirate’s GDP. View here >

All Gas, No Brakes’ Tariff Strategy Ignites Recession Fears View here >

DORA Is Here – So Why Are UK Financial Advisers Still Ignoring It? View here >

FCA Bets on Growth Over Caution in Risk Rebalancing Strategy View here >

Risk Evolve 2025 Stand Out Speakers

Fresh off the back of Risk Evolve 2025, Europe’s flagship risk and innovation convention, we’re putting the spotlight on five standout speakers who helped shape the conversation.

Held on April 1–2, the event brought together some of the most influential minds in risk management for two days of high-impact discussions across two expertly curated streams. From future-focused strategy to real-world implementation, Risk Evolve was a meeting of the industry’s brightest, driving forward-thinking dialogue and sparking new ideas across the financial services sector.

Stefana Brown

Group Technology and Data Risk Director Legal & General

Stefana Brown is the Group Technology & Data Risk Director at Legal and General. Stefana is an experienced Risk Professional with over 19 years in the financial services industry (16 in risk). She has worked for organisations across the financial services industry, which has given her a broad exposure to banking, asset management and protection.

Michale Grimwade

Managing Director, Operational Risk

ICBC Standard Bank

Michael Grimwade first worked on Operational Risk Management almost 30 years ago. He is Head of Operational Risk for ICBC Standard Bank and has previously held senior Operational Risk management roles at MUFG Securities, RBS and Lloyds TSB. He has been a Director of the Institute of Operational Risk, and is currently a Director of the Securities Industry BCM Group. Michael is the author of a number of peer-reviewed articles on Operational Risk management relating to: capital modelling; stress testing; Climate Change; and quantifying both emerging risks and reputational damage. He received an award in 2014 from the Institute of Operational Risk for his contribution to the profession. His second book, “Ten Laws of Operational Risk”, was published by Wiley in 2021.

Emma Hagan UK CEO ClearBank

Emma Hagan is UK CEO at ClearBank responsible for all risk and compliance-related activities. She has over 18 years experience in commercial and corporate banking in both first and second lines of defence.

Emma joined ClearBank from Silicon Valley Bank (SVB) where she was Chief Risk Officer for EMEA serving as part of the EMEA leadership and global risk leadership teams. Prior to SVB she worked at Lloyds HBOS in a variety of roles.

Deb was appointed Chief Risk Officer in June 2023. She joined OMERS in 2020 as the Managing Director, Capital Markets Risk. Prior to OMERS, Deb spent 15 years at QIC, an Australian-headquartered asset management firm that specializes in Fixed Income, Infrastructure, Private Equity and Real Estate. Deb began her career in Risk in 2016 after 10 years in QIC’s Global Fixed Income team. From 2011 to 2015 Deb led QIC’s Global Trading function from London which executed trades across fixed income, currency, equity and commodity markets. Deb’s commitment to learning has led to Executive Education studies at the Stanford Graduate School of Business, Wharton School of the University of Pennsylvania and the Harvard Business School (HBS) in the areas of leadership and advanced risk management.

Deb Barnes Chief Risk Officer

Rajeev Bhatnagar is the Chief Risk and Compliance Officer for BNY’s International business and responsible for global risk oversight for BNY’s multiple businesses including Treasury Services, Asset Servicing and Issuer Services growth areas like Digital Assets & Digital Cash, AI and Data & Analytics. Based in London, Rajeev leads a diverse team based in US, EMEA, APAC & Brazil which provides oversight across all risk and compliance disciplines for businesses and legal entities in his coverage area.

Rajeev has more than 34 years of international banking experience. Prior to joining BNY in 2020, he was in senior roles at Commonwealth Bank of Australia for over 6 years and at Citigroup for 21 years.

Rajeev Bhatnagar Chief Risk & Compliance Officer, International and Treasury Services

BNY

OMERS

Risk By Exception: The New Era of AI-Powered TPRM

Jag Lamba CEO and Founder Certa

The AI-Powered Third Party Operating System for Risk & Compliance

When it comes to third party risk, there’s good news and bad news. The bad news is that third party risks have become more complex and disruptive, while risk budgets have not kept pace. We call this the “productivity gap.”

But there’s also good news. GenAI can exponentially streamline organizations’ third party risk management. With GenAI, organizations can close the productivity gap, turning third party risk from a challenge into a strategic advantage.

Why GenAI is Uniquely Powerful

What makes GenAI different from traditional IT? The answer lies in the difference between structured and unstructured data.

Structured data exists in pre-defined formats (i.e. spreadsheets, datasets, etc.), while unstructured data follows unpredictable formats (i.e. contracts, assessments, etc.).

Traditional IT works well with structured data. However, most of the data used in TPRM is unstructured. GenAI can work with both unstructured and structured data, making it uniquely suited to risk professionals’ needs.

How GenAI Enables Risk By Exception GenAI’s unique capabilities empower organizations to adopt a new, more effective approach: “risk by exception.” Instead of using static assessments, organizations can rely on AI-powered workflows that continuously analyze risk in the background. These workflows will surface the risks that require human intervention, allowing businesses to move from point-in-time compliance to proactive risk mitigation.

Here are 4 real world examples for an AI-powered, “risk by exception” approach.

1. Pre-Completing Assessments

Challenge: Assessors wade through hundreds of documents to manually evaluate risk, a tedious and time-intensive process. 59% of respondents we surveyed said their team spends more than 21 hours per month analyzing third party documents.

AI solution: GenAI takes the first pass at analyzing third party documents. It identifies supported controls, contradictions, and gaps before human intervention.

Impact: Assessors can focus on strategic risk evaluation and decision-making instead of tedious and manual work, saving firms up to 21-30 hours per month.

4. Pre-completing Third Party Due Diligence

Challenge:

Third parties can be reluctant to respond to time-consuming questionnaires. They may provide pre-packaged or error-prone responses.

AI solution:

AI pre-fills answers using the third party’s past responses and question banks. It automatically highlights the areas where it needs more information

Impact:

Streamlined questionnaires lead to reduced friction and errors, creating faster time-to-value and saving their third parties up to 5,511 hours per month.

2. Reviewing Contracts

Challenge: Manual contract review drains legal resources, leading to errors, inefficiencies and compliance risks.

AI solution: AI takes the first pass at reviewing the contracts by automating analysis, detecting risks, and maintaining audit trails.

Impact: Organizations can move more quickly, make fewer errors, and identify areas of cost-savings through datadriven insights.

3. Designing and Maintaining Processes

Challenge: Creating and maintaining automated workflows is challenging, timeintensive, and requires the help of consultants and IT.

AI solution: AI can translate business requirements directly into workflows. You can upload a document in natural language, and AI will automatically translate that into code.

Impact: Instead of relying on consultants and IT, you can create, update, and deploy automated workflows on your own, making it easy to adopt the “risk by exception” approach.

While organizations must grapple with increased risks and regulations in a more interconnected world, they also have exponentially more powerful tools at hand. Our whitepaper, created in partnership with CeFPro, uses quantitative and qualitative data to show how GenAI can help close the productivity gap.

Bridging the Productivity Gap in Third-Party Risk Management with AI

Too many vendors. Too little time.

Close the productivity gap with AI.

Manual risk reviews. Endless document analysis. Stagnant budgets. TPRM teams are stretched thin - and falling behind.

Discover how your peers are using AI to unlock 30% efficiency gains, streamline due diligence, and finally get ahead of the growing third-party risk burden.

The new whitepaper from CeFPro and Certa reveals why AI isn’t just a tool - it’s the turning point.

Download your free copy today >

FINTECH LEADERS 2025

Summary

To celebrate the launch of CeFPro's Fintech Leaders 2025 report, here's a breakdown of some of the standout stats and figures that you won't want to miss.

Top Investment Priorities for 2025

AI and Automation

AI top applications:

• Fraud Detection

• Process Optimization

• Risk Management

AI Governance:

• Only 43% say IT is primarily responsible

• 19% list “Other,” showing governance ambiguity

Key Takeaways

• Cybersecurity remains the most critical area of investment, driven by

and reputational

• AI’s use in fraud, compliance, and optimization is expanding, but regulatory pressures (e.g., EU AI Act) limit full-scale adoption.

• Efficiency and compliance are prioritized over innovation across most firms.

• Fintech adoption faces internal hurdles: cost, complexity, and workforce gaps.

• GenAI, CBDCs, and tokenization are set to shape the fintech landscape by 2030.

The Demystification of AI in Fraud Detection and Model Risk Management

Dr. Abhishek Gupta heads the Model Risk Management and Enterprise Risk Reporting group at Metropolitan Commercial Bank in New York, focusing on model risk management, model validation, enterprise risk governance and reporting, AI /automation, and regulatory compliance. Previously, at Natixis, he served as Head of Model Governance, enhancing model risk frameworks and strengthening compliance with regulatory expectations.

In March, I had the pleasure of attending CefPro’s Advanced Model Risk Management Conference in New York City, where industry leaders convened to explore the evolving landscape of model governance.

Amidst the technical deep dives and regulatory discussions, one presentation stood out for its ability to translate complexity into clarity.

The session on ‘Transformers for Fraud Detection’, led by Chandrakant Maheshwari, was a masterclass in making advanced AI concepts accessible without diluting their rigor.

The Challenge: Making AI Comprehensible in Model Risk Management

The rapid advancements in artificial intelligence, particularly Transformer architectures like those powering ChatGPT and BERT, are transforming industries –from natural language processing to fraud detection.

However, for model risk professionals, these models often remain a black box, posing challenges for explainability, compliance, and governance.

Chandrakant Maheshwari tackled this challenge head-on. Using a blend of storytelling, analogy, and technical precision, he demystified Transformers, ensuring that even

attendees without a machine learning background could grasp their significance and function.

The Classroom Analogy: A Simple Yet Powerful Explanation

Chandrakant began with a relatable question: “Can anyone explain how photosynthesis works?”

He went on to paint a picture of a classroom where students from different disciplines –biology, history, physics – offered varying explanations. Rather than selecting a single answer, the teacher in this example assigned weight to each response based on its relevance, synthesizing a well-rounded explanation.

This, Chandrakant explained, is precisely how the self-attention mechanism in Transformers functions works, assigning ‘attention weights” to different inputs (such as transactions or words) based on their relevance to the task at hand.

The once-intimidating concept of Query (Q), Key (K), and Value (V) matrices suddenly became intuitive, eliciting nods and smiles of understanding from the audience.

From Theory to Practice: Fraud Detection with Transformers

Having established a conceptual foundation, the speaker transitioned seamlessly into realworld applications.

He demonstrated how Transformers excel at analyzing transaction sequences, identifying fraudulent behavior by considering contextual patterns rather than assessing transactions in isolation.

For instance, a $10,000 withdrawal might not raise suspicion in a conventional fraud model. But viewed in the context of prior transactions, it could be an anomaly.

Transformers’ ability to process entire transaction histories makes them a game-changer in fraud detection and anti-money laundering (AML) efforts.

Unpacking the Attention Mechanism: A Hands-on Approach

A particularly compelling part of the session was a handson Excel-based walkthrough of Transformer mechanics. Breaking the process down into five key steps, the presenter outlined the principles behind:

1. Turning Transactions into Numbers – Converting financial data into a format the model can process.

2. Identifying Key Information

– Assigning roles to inputs to determine their importance.

3. Finding Relevant Patterns –

Comparing data points to identify relationships.

4. Prioritizing Important Details

– Adjusting weights to emphasize key information.

5. Making a Final Decision

– Synthesizing insights into a risk score or fraud alert.

This step-by-step breakdown translated abstract AI principles into a concrete workflow, helping attendees visualize how Transformers enhance fraud detection.

Key Takeaways for Model Risk Managers

Beyond the technical aspects, the session reinforced several critical lessons for model risk management:

Explainability Is Non-Negotiable: While powerful, AI models must remain interpretable. Transparency is essential for compliance, regulatory approval, and risk governance.

Regulations Drive Innovation, Not Just Compliance: Frameworks like GDPR and the EU AI Act are shaping AI governance. Instead of being seen as constraints, they should be leveraged to build fair, transparent, and robust models.

Collaboration Is Key: Model risk teams must act as a bridge between data scientists, compliance officers, and executives to align AI-driven decisions with business and regulatory requirements.

Discussions on AI often get bogged down in technical complexity or regulatory abstraction. This session struck a balance – explaining advanced AI in a way that was engaging, rigorous, and practical.

By the end, the room buzzed with discussions on AI’s role in risk management, regulatory compliance, and fraud detection. Attendees walked away with not only a clearer understanding of Transformers but also practical insights into applying them within their organizations.

A Call to Action: Making AI Transparent and Trustworthy

As AI adoption grows, ensuring transparency and trust in machine learning models is a shared responsibility. Sessions like this demonstrate that complex AI topics can be made accessible through clear analogies, hands-on demonstrations, and industry relevance.

Moving forward, the challenge for model risk professionals is not just to understand AI, but to integrate it responsibly ensuring its decisions are explainable, fair, and aligned with regulatory expectations.

This session provided a blueprint for how that can be done. Now, it’s up to industry to put these insights into practice.

Why Open Banking is a Trust Disaster Waiting to Happen

Adam Ennamli is the Chief Risk, Compliance and Security Officer at the General Bank of Canada. He was previously Global Vice President, Operations and Technology at Thomson Reuters

Despite years of regulatory development and technological investment, open banking is still viewed with suspicion by many customers.

Compliance may be in place, but psychological confidence in processes around data privacy are lagging far behind – and at the heart of this challenge is a failure by financial institutions to bridge the gap between data protection and emotional reassurance.

While data sharing frameworks such as PSD2 in Europe and local equivalents elsewhere provide the legal and technical backbone for open banking, they don’t automatically deliver trust, and much of the hesitation appears to stem from confusion about what ‘open’ actually means.

The perception that personal financial data is freely available to anyone is hard to shake. In reality, of course, access is strictly controlled, and customer consent is required at every stage.

But that message often gets lost amid the jargon.

What customers need is not just security but also simplicity, and this means the industry needs to frontload its communication efforts, beginning with practical, non-technical storytelling that shows how data sharing can actually improve financial outcomes when handled correctly.

Case studies, relatable scenarios, and digestible formats like visuals and videos must be embedded into the

customer journey. Education must be persistent and tailored, not just a oneoff onboarding exercise – it should be something that adds free, continuous value.

Transparency also plays a critical role in building this trust. Customers need to receive real-time notifications whenever their data is accessed, by whom, and for what purpose.

This not only ensures compliance with consent management regulations, but reinforces the idea that it is the end

users who remain in control. Tools that allow people to grant or revoke access easily must be part of the core platform experience, not hidden in settings or legalese.

Banks also have a human responsibility. AI and encryption might secure the backend, but customers need frontfacing reassurance. Something as simple as a dedicated support line for open banking concerns can offer a much-needed human touch.

It’s worth reminding ourselves, after all, that people trust people, not protocols. Misconceptions remain one of the biggest barriers to adoption. One common myth is that once data is shared, it can be used indefinitely or sold without the customer knowing.

Another is the belief that open banking increases the risk of fraud. In fact, modern open banking systems often

deploy better security than traditional setups, leveraging multi-factor authentication, encryption, and AIpowered monitoring.

Still, the increased number of third parties introduces inherent complexity – something institutions must acknowledge and manage rather than dismiss.

Education must also confront the belief that open banking is a regulatory obligation rather than a value-add.

Customers will not buy in unless they see how it benefits them. Features like adaptive loan calculators or smart savings tools, which depend on data sharing, need to be integrated into the core digital experience as part of the ‘Why?’ narrative.

In some jurisdictions, such as Canada, customer privacy protections are not yet as mature as in the EU under GDPR.

This only intensifies the need for banks to lead with clarity and assurance. SMBC, for instance, remains at the early stage of its open banking journey, but already recognises the importance of communication over compliance.

In more mature markets like Spain, BBVA has shown what proactive investment can achieve. Launching their open banking platform in 2017, before PSD2 enforcement, they positioned themselves as digital leaders while maintaining strict internal safeguards and giving customers full control.

The question of liability remains a key sticking point. If a customer grants access to a less secure third-party provider and a breach occurs, where does the responsibility lie? Banks must be clear and consistent.

They cannot simply offload risks onto the customer. Minimum standards

for third-party integration, real-time monitoring of data flows, and clearly

defined incident response protocols must all be in place. Legal clarity is not enough – ethical duty demands more.

As open banking evolves, institutions must also invest in transparency about the benefits. Customers need to know how and why their data is being used.

Communication platforms must become knowledge hubs, not just transaction portals. Practical engagement tools, community forums, and personalized simulations can help demystify the process.

Ultimately, open banking will only succeed if it is built on something deeper than compliance: trust. And trust is not earned through encryption alone. It takes clarity, consistency, and the courage to engage openly with customers – even when they’re afraid.

Otherwise, the very systems meant to empower users may end up alienating them.

Chandrakant is First Vice President, Lead Model Validator at Flagstaff Bank, New York and a regular monthly contributor to Connect Magazine

ROBIN CASTELLI ON CLIMATE RISK, CAREER PIVOTS AND THE FUTURE OF TRANSITION FINANCE

In the first of our regular fireside conversations in which leading figures in risk management share career tips and expertise, regular Connect columnist Chandrakant Maheshwari sits down with C. Robin Castelli to find out what has led him to becoming one of the world’s leading voices in Transition Finance.

Robin is Head of Transition Finance Investing at Orange Ridge Capital. He’s an expert in climate risk, transition finance, and private equity, with a strong background in quantitative modeling, financial analysis, and strategic management. In a long and successful career, he has led defense programs, conducted due diligence, and driven innovation in financial and technological sectors. He is fluent in three languages and is a highly respected author on the subject of transition finance.

Can you tell us a little about your career journey, and how and why you chose to specialize in climate risk issues?

I entered climate risk in a somewhat unusual way, which is definitely in line with what the rest of my career has looked like over the decades. My academic background is in Molecular Biology and Evolutionary Biology, which made me an outlier in the Financial world, but allowed me to come in with fresh views, methodologies and an ‘out-of-thebox’ approach that proved to be quite successful.

At Citi, I started out by leading the Systemic Risk Early Warning Signals group, as they wanted someone untainted by the traditional economists’ views and set tenets, and, as an evolutionary biologist used to computational and behavioral models, I fit the bill perfectly.

I spent the first 18 months of my tenure at Citi in building a very large and complex data-mining operation.

This was a successful operation and led me down a path of various different senior risk modeling and reporting roles at the bank where I was generally managing analytics teams and also covering the role of division CAO/COO.

When the epidemic hit, my biology background became very interesting,

as we had to run a stress test on how COVID would affect the bank (domestically and globally), and my experience and knowledge proved to be very useful.

I co-developed and ran the epidemic models that we used for our stress test, achieving very good fits with how the epidemic played out, and publishing the results for our investors a few months later.

What were the biggest hurdles you faced when transitioning into this field, particularly in terms of the technical, scientific, and regulatory aspects of climate risk?

The major hurdles in entering climate risk as a practitioner came from having to fight entrenched beliefs and sup-par models, while trying to educate the users and model sponsors on the correct way of dealing with the risks (and opportunities) that are intrinsic to a Climate Transition.

Given my background in evolutionary biology I had very limited issues with fully getting into the technical and scientific aspects of climate risk.

The regulatory ones were somewhat more challenging, as I was responsible for models that were used in over 140 different countries, with different rules and regulations (as well as accounting standards) in most of them.

I knew I wanted to work on advanced modeling and make a difference in how things are done. I never was interested in executing things the way everyone else has been doing forever, especially in cases where the state of the art is unsatisfactory, so the change to climate was a welcome and stimulating one.

What steps helped you bridge any skill or knowledge gaps – I’m thinking particularly about certifications, mentors, or communities that played a pivotal role, and how did you build credibility?

I believe in never pausing on my learning journey.

Over my entire life I have kept learning new skills, and every few years pick up a new language, with R and Python being the latest additions. I also keep abreast of other topics/areas of interest.

One important area of feedback and advice that I can definitely recommend has been reaching out to leaders in the areas of interest that you have (I have met over 30 Nobel Prize winners in my life, in the physics, life sciences and economics fields). It has been my experience that the majority of highly accomplished and recognized figures in Science and Economics are generally happy to share advice and feedback with young and hardworking students, and they get way fewer reach outs than one might think.

What advice would you give to professionals (especially mid- or senior career) considering a pivot into climate risk and how do you see the future of climate risk evolving?

My advice to anyone looking at shifting to Climate Risk and Transition Finance would be to get a solid

background on the fundamentals of the underlying shifts that the entire field is based upon.

I have covered the basis of the necessary skillsets in the book that I co-authored with Prof. Cyril Shmatov from Columbia University (‘Quantitative Methods for ESG Finance’ – Wiley 2022) and will be covering the Climate Risks/ Opportunities in far greater detail in my upcoming (August 2025) ‘Principles of Transition Finance Investing – finding Alpha in a World Adapting to Climate Change’).

With the ongoing changes of the global macro-economic chessboard, I believe that Climate Risk will evolve more and more into the areas of Climate Adaptation, as opposed to Climate Mitigation.

How should professionals futureproof their careers given the rapid evolution of climate-related regulations, technologies, and expectations?

Never in the history of mankind has the pace of information growth been faster than it is today.

I personally make sure I keep abreast of news within the transition finance space on a daily basis (and often post about items of interest) and do some regular deep diving on topics of interest on a regular basis.