2024 has been the year of historic participation in elections and record temperatures, and of wars, unrest and tensions across many parts of our world. To begin the business year of 2025, the management team chooses to underscore the value of WAIFC’s global network – and to encourage members to use this tool even more.
Nearly every reader must have vivid memories of how swiftly, broadly, and deeply the financial crisis of 2008-2009 hit. It was useful in that moment of acute tension to have people on the other side of the world one had come to know over the years, colleagues to contact based on an existing relationship and some knowledge of one another’s businesses. It is useful, too, in calmer times.
Benefits of International Networks like WAIFC
- Geopolitical Risk Management: through Alliance connections, businesses can gain a broader understanding of the risks in various regions and better plan for contingencies.
- New Market Opportunities: political instability in one region can reduce business opportunities, but a strong network provides access to more stable markets elsewhere.
- Global Talent and Innovation: networking across borders provides access to a wider pool of talent, new ideas, and innovative solutions. This can be especially valuable when domestic markets are underperforming.
- Adaptability in Times of Change: Networking offers insights into alternative strategies and market dynamics. Relationships with local experts, consultants, and industry leaders can guide companies through complex situations, including regulatory changes.
- Partnering for Stability: forming partnerships with companies in politically stable regions or forging alliances provide a buffer against political and military disruptions.
- Knowledge Sharing: networks foster the exchange of information about emerging challenges, including shifts in regulations, tariffs, and trade restrictions affecting the provision of services.
- Navigating Regulatory Challenges: businesses with established networks may gain better access to diplomats, trade organizations, or government bodies that can influence policy.
- Reputation Management: a well-established international presence can help associations, and their marketplaces, maintain credibility and goodwill.
- Cultural Diplomacy: cultural sensitivity and established networks can help businesses avoid misunderstandings and maintain smooth operations across borders.
- Joint Ventures and Strategic Alliances: in uncertain times, businesses can pool resources with international partners to strengthen their market position and share risks.
Past Corporate Success Stories from Networking
There are countless examples where cross-border networking played a critical role in helping businesses navigate global political and military tensions. IFCs have a role to play, when required, in introducing the member institutions in their marketplaces to their peers across the world. And they have their own peer institutions to work with for the development of their financial ecosystems as well.
Let’s look at two examples.
Coca-Cola's Expansion into the Soviet Bloc during the Cold War. Coca-Cola faced the challenge of operating in a world where political tensions often resulted in trade barriers. But the company had already established an extensive network of partners and subsidiaries.
- Networking Strategy: the network enabled it to continue its operations in Western Europe and Asia while maintaining a presence in less-affiliated markets. In the 1970s and 1980s, its connections enabled entry into Eastern European countries. After 1991, Coca-Cola was one of the first Western companies to establish a foothold in Russia.
- Impact: The Cold War exemplified the importance of having international partners and a diversified market strategy. Coca-Cola’s global network allowed the company to weather geopolitical tensions and emerge as one of the dominant brands in post-Soviet Russia.
The 1997 Asian Financial Crisis Impacted Hong Kong and Banking Networks. The 1997 Asian Financial Crisis, triggered by the collapse of the Thai baht and quickly spreading across East Asia, caused significant economic turmoil in many countries, particularly Thailand, Indonesia, Malaysia, and South Korea. An exception was Hong Kong, as a financial hub with deep international ties, which managed to avoid the worst of the crisis.
- Networking Strategy: International banks operating in Hong Kong (such as HSBC, Citigroup, and Standard Chartered) were able to leverage their global networks to stabilize their operations and navigate the crisis. Hong Kong’s strong ties to both Western financial markets and China also played a role in its resilience. Banks and companies with substantial international exposure had better access to liquidity and risk-sharing mechanisms, which helped them avoid bankruptcy.
- Impact: Hong Kong's role as a key financial intermediary in Asia demonstrated how international networks of financial institutions could act as shock absorbers during a regional financial crisis. Hong Kong avoided recession. Its international connections helped maintain economic stability, ultimately aiding its recovery and confirming its long-term reputation for good governance.
Supply Chain Problems Post-Covid and the Financial Equivalent. In very recent memory, in our daily lives we saw the disruptions stemming in complex commercial supply chains, and the work-arounds large global companies had to find to restore merchandise levels.
In finance, we have sudden liquidity crises that occur within hours. There is little time for workarounds. In those sudden moments when markets freeze, central bankers know and work with their peers around the world, which is very much true for payments and custody specialists. The BIS report following the September 2022 squeeze in the dollar market demonstrated how other interbank currency markets made the difference: https://www.bis.org/statistics/gli2301.htm.
Conclusion
These examples demonstrate that networking—whether through peer industry ties, which are the supply chains of finance, market diversification, partnerships, or access to information—has been critical for businesses navigating periods of geopolitical and military tensions. All actors that compose a financial ecosystem in their varied areas of expertise with strong global connections before a crisis were better equipped to manage disruptions, reduce risks, and continue operating successfully during turbulent times. The ability to adapt to new political realities, provide liquidity and counterparty risk management services from more stable partners has been a recurring theme in the survival and recovery of businesses during global crises.
This is not only about maintaining business continuity—it is about building resilience, agility, and strategic depth. By leveraging global connections, financial service businesses can manage risks more effectively, stay ahead of the competition, and navigate uncertain environments with greater confidence.
The WAIFC management team sends best wishes for a prosperous 2025 to members and readers, all across the world.