Geopolitical risks fuel financial outsourcing explosion: Ocorian survey

SAINT HELIER, JERSEY — Family offices and investment houses are looking to outsource more in reaction to mounting economic uncertainty and geopolitical volatility in order to control risks. 

To negotiate the complicated financial terrain, companies are deliberately diversifying their investments and outsourcing activities, according to a recent worldwide survey by Ocorian.

Diverse approaches to diversity develop momentum

According to the study, 49% of companies have outsourced to third parties to take advantage of specialized knowledge, while 52% have already broadened their investment focus areas to reduce risks. 

With 60% of respondents intending to boost outsourcing more broadly over the next year and a half, this trend indicates no slowing down.

“It is clear that outsourcing of more operations and working with more specialist third parties will continue to trend over the next 18 months as companies look to ensure they are protected as much as possible from the latest economic and geopolitical issues which have a significant impact on decision making,” said Charlotte Cruickshank, Global Head of Fund Solutions at Ocorian.

Banking industry expected to gain

Gathering comments from top executives in the European Union, the United Kingdom, the United States, Canada, South Africa, Asia, and the Middle East, the survey also highlighted hope about the future of the banking industry.

With 51% predicting similar positive outcomes for insurance, almost 71% of senior executives at large corporations and asset managers working in alternative investments believe the banking industry will most profit from recent election results worldwide.

Conducted in October 2024 by independent research firm Pure Profile, the extensive poll comprised 300 top executives from several different financial sectors. Participants varied from wealth managers, family offices, and professional services providers to asset managers in private equity, venture capital, and real estate to board directors of companies with minimum annual revenues of $10 million.

This deliberate move toward outsourcing by financial firms to preserve stability and seize growth prospects while reducing exposure to turbulent market conditions marks a determined response while economic uncertainty remains.