Date: 2025, May

Classification: OSINT

Executive Summary

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Rising geopolitical tensions are straining the effectiveness of cyber threat intelligence sharing among allied nations and between governments and private-sector institutions. These tensions have direct implications for the financial services sector, particularly in the areas of supply chain security, third-party risk management, and exposure to nation-state threat actors. This briefing outlines the operational risks posed by these dynamics and provides targeted recommendations for mitigating exposure in the 2025–2026 threat landscape.

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1. Strategic Overview

The international cyber threat landscape is undergoing significant disruption as tensions escalate between global powers. Strategic competition between the U.S., China, and Russia, coupled with regional instability, has impacted the free flow of cyber intelligence. Traditionally, alliances such as NATO, the Five Eyes, and U.S.-EU partnerships facilitated real-time exchange of threat indicators and vulnerabilities. However, as countries prioritize national sovereignty, protect critical infrastructure, and hedge against future political shifts, a more fragmented model of cyber defense has emerged. These developments raise concerns about shared visibility on advanced persistent threats (APTs), cross-border incident response, and the security posture of multinational companies.

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2. Geopolitical Trends Affecting Intelligence Sharing

Recent developments illustrate how global tensions have translated into cyber coordination challenges:

U.S.–EU Friction: Political instability and budgetary uncertainty in Washington have diminished confidence in U.S.-hosted cyber infrastructure, such as the National Vulnerability Database (NVD). The European Union, in response, launched its own independent vulnerability disclosure and reporting platforms, signaling a move toward strategic autonomy.

Transatlantic Dependency Gaps: In 2025, a high-profile assassination attempt by Russian operatives on European soil was discovered by the CIA before being detected by local intelligence services. This incident reignited debate in Europe over excessive reliance on U.S. intelligence and spurred discussions about building sovereign capabilities.

Operational Breakdown in Humanitarian Corridors: Russian-linked Fancy Bear (APT28) actors infiltrated security camera networks and tracking systems supporting Western aid to Ukraine. Intelligence-sharing bottlenecks between U.S. and European agencies slowed mitigation efforts and raised alarms about the security of digital logistics frameworks.

Domestic Infrastructure Vulnerabilities: A series of state-sponsored cyberattacks on rural Texas water systems highlighted vulnerabilities in domestic critical infrastructure. These events demonstrated the limits of public–private coordination and exposed rural entities as potential weak points in national resilience.

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3. Political Climate and Private Sector Intelligence Sharing

The domestic political climate—marked by polarization, shifting regulatory priorities, and frequent leadership transitions—can significantly affect the private sector's ability to access and act on cyber threat intelligence. Private entities, especially those in critical sectors like finance, rely heavily on partnerships with federal agencies such as the Department of Homeland Security (DHS), the Cybersecurity and Infrastructure Security Agency (CISA), and sector-specific ISACs. However, these relationships are often strained by the lack of consistent funding, policy direction, and legal clarity.

Cross-Border Impacts on U.S. Financial Institutions

U.S. financial institutions with operations in Canada, India, Europe, and Asia are experiencing a growing web of conflicting data privacy laws, threat intelligence standards, and reporting requirements. For example, companies operating in Canada must comply with the Personal Information Protection and Electronic Documents Act (PIPEDA), which includes strict rules on cross-border data transfers. In Europe, the General Data Protection Regulation (GDPR) and the Digital Operational Resilience Act (DORA) have created additional friction, requiring financial institutions to localize incident response workflows and maintain in-region security operations centers (SOCs).

In India, recent amendments to the Digital Personal Data Protection Act and sectoral financial regulations have introduced stringent notification requirements for data breaches—sometimes requiring disclosure before a forensic investigation is complete. This puts multinational firms in the difficult position of balancing global cyber defense strategy with local compliance mandates that may not align.

Furthermore, U.S. firms operating in Asia face increased scrutiny from foreign regulators and cybersecurity review boards, particularly in jurisdictions where political tensions with the U.S. are high. These reviews can delay mergers, acquisitions, or technology rollouts, as seen in recent fintech investments blocked by data localization rules in Southeast Asia.

These dynamics not only increase compliance burdens but also fragment situational awareness across global operations. U.S. companies may be unable to share key threat indicators across national borders, limiting their ability to detect or respond to coordinated attacks. In the financial sector, where real-time threat intelligence is crucial to preventing fraud, ransomware, and insider threats, this disconnect can create exploitable seams for adversaries.

Ultimately, the geopolitical fragmentation of cyber norms and regulatory policy presents a systemic risk to the resilience of cross-border financial operations.

Expanding Consequences of Political Friction

The political landscape—both domestically and internationally—continues to shift in ways that affect cooperation between governments and private organizations. A notable development in recent years is the erosion of bipartisan support for cybersecurity funding and interagency collaboration in the United States. Budget delays, contested leadership appointments, and disagreements over surveillance and privacy policies have directly impacted the flow of resources and guidance to the private sector.

Furthermore, international tensions have led some countries to become more protectionist with threat intelligence. For example, recent EU data privacy laws (like the Digital Operational Resilience Act) create restrictions on the types of threat data that can be shared with non-EU countries. Financial institutions operating in both jurisdictions now face regulatory and ethical dilemmas when balancing data sovereignty with operational threat visibility.

U.S. private sector entities have also become cautious participants in federal programs. After several high-profile leaks and politicized investigations, confidence in the long-term security and neutrality of data-sharing frameworks has diminished. Firms now question whether intelligence shared with one administration might be weaponized or subpoenaed under a subsequent one with a different agenda.

Finally, diverging approaches to artificial intelligence regulation—particularly as it relates to surveillance, facial recognition, and biometric data—have raised compliance barriers between allied nations. These conflicts not only slow joint response to cross-border threats but also force global firms to design fragmented, region-specific security protocols.

The cumulative result is a more siloed threat intelligence environment that limits real-time situational awareness, slows incident response, and allows advanced persistent threats to operate in the gaps created by political mistrust and legal inconsistency.

Within the financial services sector specifically, the effects of the political climate are amplified due to its dual role as both a pillar of national economic stability and a frequent target for cyber adversaries. Financial institutions depend on near real-time cyber threat intelligence to mitigate fraud, protect consumer data, and maintain the continuity of services such as electronic payments, trading platforms, and retirement account access. Yet political instability can cause critical delays in the dissemination of such information.

For instance, partisan debates over cybersecurity budgets can stall or suspend federal initiatives like cross-sector information exchange frameworks or real-time alert systems. In previous cycles, lapses in funding for the National Vulnerability Database and the Joint Cyber Defense Collaborative (JCDC) created uncertainty among financial stakeholders, who were left without clear federal guidance during emerging threat windows. These gaps lead institutions to either adopt inconsistent security postures or overcompensate with redundant spending on commercial threat feeds.

Moreover, politically driven narratives about regulatory overreach or foreign influence may deter firms from openly cooperating with federal agencies. Financial institutions—especially those operating internationally—have to carefully assess the risk of engaging with intelligence-sharing programs that could later be scrutinized or politicized. This hesitancy often causes underreporting of incidents and lower participation in sector-wide initiatives such as FS-ISAC, degrading collective situational awareness.

Additionally, heightened scrutiny from state attorneys general and politically motivated lawsuits related to data privacy, ESG policies, or foreign ownership complicates internal governance. This puts compliance officers in a bind: comply swiftly with threat reporting protocols or wait for legal clearance, even if that delay risks spreading malware or extending dwell time.

The net effect is a fragmented intelligence-sharing ecosystem, where each institution must navigate not only technical threats but also the unpredictability of the political environment in which it operates. For the financial sector, the stakes are particularly high—as cyberattacks against banks, pension systems, and insurance firms have the potential to ripple into economic instability and erode public trust in national institutions.

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4. Implications for the Financial Services Sector

Financial institutions face specific risks stemming from geopolitical and operational shifts. The reduction in global cyber threat collaboration poses immediate and long-term challenges:

Threat Intelligence Blind Spots: If shared intelligence slows or is filtered through political gatekeeping, financial institutions may experience delays in receiving high-fidelity Indicators of Compromise (IOCs) and threat behavior updates. This impacts incident detection and response speed, particularly for sophisticated attacks.

Third-Party Risk Complications: Many of the institution’s partners and service providers operate across jurisdictions affected by these tensions. As national governments begin to hoard intelligence or impose reporting barriers, validating the security postures of third-party entities becomes more difficult.

Compliance Overload: Regulatory divergence across U.S., EU, and Asia-Pacific regions is creating a labyrinth of data handling, breach disclosure, and cyber resilience mandates. Navigating these overlapping frameworks places significant demands on governance, risk, and compliance (GRC) teams.

Strategic Target Profile: Financial institutions are increasingly seen as high-value targets in the context of economic warfare. Their involvement in banking, investment products, and retirement planning makes them attractive targets for disruption or espionage.

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5. Priority Threat Actors to Monitor (2025–2026)

Multiple nation-state and criminal groups pose an elevated threat to the financial services sector:

APT38 (North Korea): Targets financial institutions to fund the regime’s objectives using ransomware and ATM-switching attacks.

FIN7 and UNC3944 (Russia): Use spear phishing, credential theft, and RaaS platforms to exploit digital assets and sensitive data.

APT41 (China): Engages in cyberespionage campaigns targeting intellectual property and financial data.

Volt Typhoon (China): Uses stealthy infiltration methods and may pivot toward disrupting financial infrastructure.

BlackCat/ALPHV and LockBit: Ransomware actors targeting insurance and financial firms with advanced extortion tactics.

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6. Strategic Recommendations for Financial Institutions

To build resilience amid rising geopolitical risk, rapid threat evolution, and increasing regulatory pressure, financial institutions must adopt a multi-layered and forward-leaning approach to cybersecurity and intelligence coordination. The following strategic actions are recommended:

• Enhance Intelligence Participation: Engage in FS-ISAC and classified briefings through InfraGard or JCDC to gain early warnings on nation-state actors and ransomware campaigns. Expand collaboration with peer institutions to foster collective defense.
• Internal Threat Hunting Programs: Establish dedicated blue teams to proactively monitor cloud workloads, identity systems, and privileged access controls. Use behavioral analytics and anomaly detection to surface early indicators of compromise.
• Robust Red Teaming: Conduct quarterly adversary simulations to evaluate resilience against ransomware, APTs, and business email compromise (BEC). Include social engineering and insider threat scenarios in tabletop exercises.
• Enterprise-Wide Tabletop Simulations: Model incident response and decision-making with a third-party-led simulation modeled after U.S. Army Warfighter exercises. These simulations should involve senior leadership, IT, legal, communications, operations, and compliance units. A realistic, full-spectrum cyberattack scenario is played out in real time across multiple teams to assess interdepartmental coordination, strategic risk decisions, and crisis communication. Outcomes include gaps in policy, technical bottlenecks, and training needs, as well as refining executive playbooks.
• Geopolitical Risk Forecasting: Develop threat intelligence functions that incorporate geopolitical analysis into cyber risk models. Monitor developments in China, Russia, North Korea, and Iran for emerging tactics or threat actor movements.
• Third-Party Cyber Governance: Update procurement policies to include geopolitical and regulatory exposure in vendor risk assessments. Require SOC 2 or ISO certifications, regular penetration testing, and incident reporting SLAs for key suppliers.
• Zero Trust and Identity-Centric Security: Implement zero trust architecture, emphasizing continuous authentication and role-based access controls. Protect crown-jewel assets with identity segmentation and just-in-time access policies.
• Crisis Communication and Brand Protection: Prepare incident response teams and communications staff to handle public-facing breaches. Develop media response templates, pre-approved talking points, and law enforcement coordination protocols.
• Regulatory Readiness and Audit Trail Automation: Use compliance automation tools to map controls to multiple frameworks (e.g., GLBA, SOX, DORA). Ensure all detection and response activities are logged, encrypted, and reportable.
• Cybersecurity Investment Governance: Create executive-level cyber investment boards to prioritize spending, assess ROI, and align security initiatives with enterprise risk appetite.**: Create executive-level cyber investment boards to prioritize spending, assess ROI, and align security initiatives with enterprise risk appetite.

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7. AI-Enhanced Social Engineering in Financial and Healthcare Sectors

The emergence of generative artificial intelligence has significantly amplified the effectiveness, scale, and sophistication of social engineering attacks. Financial and healthcare institutions—already high-value targets for nation-state actors and organized cybercrime—are now facing a new wave of AI-powered threats aimed directly at their mid-level and executive leadership. These attacks are no longer limited to phishing emails; they now include voice cloning, deepfake videos, and synthetic identities designed to compromise trust, trigger high-value transactions, or extract sensitive data.

Threat Vectors

1. Hyper-Personalized Phishing
2. Voice Cloning and Vishing Attacks
3. Deepfake Videos and Executive Impersonation
4. Synthetic Identities and Credential Harvesting

Real-World Incidents

• In the UK, a fake video of financial analyst Michael Hewson promoting crypto investments circulated across LinkedIn and WhatsApp. Dozens of victims were duped into transferring funds after believing they were interacting with a real executive.
• Journalist Amanda Hoover conducted an experiment using an AI clone of her own voice and was able to bypass a major U.S. bank’s phone verification system, underscoring how susceptible legacy voice authentication systems are to AI-driven attacks.
• Health-ISAC reported in 2025 that 48% of cyberattacks on healthcare organizations involved social engineering, and 80% of ransomware events began with human error caused by deception. Attackers frequently impersonated patients, suppliers, or executives to trigger malicious activity.

Impact on Financial and Healthcare Sectors

• Erosion of Trust in Internal Communication: As deepfake videos and synthetic voices become harder to distinguish from legitimate communications, organizations face an internal credibility crisis. Employees may hesitate to act even on genuine instructions without additional validation.
• Bypassing Traditional Security Controls: These attacks often exploit human behavior rather than system vulnerabilities, slipping past email filters, endpoint protection, and firewalls.
• Business Disruption and Financial Loss: Executive impersonation incidents have resulted in multi-million dollar wire frauds, litigation, reputational damage, and regulatory scrutiny.
• Increased Regulatory Exposure: Financial regulators in the U.S., UK, and EU are already examining the role of AI in fraud amplification. Firms may be held liable for failing to update identity verification and fraud prevention mechanisms in light of known AI threats.

Recommendations

• Adopt Multi-Factor Executive Validation: All high-risk approvals, especially those involving finance, HR, or legal matters, should require multi-modal authentication including biometric or app-based confirmation.
• Deploy Deepfake Detection Tools: Incorporate AI-enabled monitoring tools that analyze speech patterns, latency, facial movements, and other biometrics to flag potentially fraudulent interactions.
• Update Staff Training Programs: Traditional phishing awareness is no longer sufficient. Training must now include simulated AI-driven threats, including voice and video impersonation scenarios.
• Improve Third-Party Verification: Many of these attacks originate from compromised vendors or partners. Strengthen identity assurance and communication validation protocols with all external entities.
• Participate in Sector-Specific Threat Exchanges: Engage actively in ISACs like FS-ISAC and H-ISAC to receive up-to-date indicators of AI-driven threats and access incident intelligence from peer institutions.

Conclusion

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International tensions are embedded in the daily operational environment of financial firms. Financial institutions must recognize that cyber conflict now intersects with political disruption, information warfare, and digital crime. By investing in intelligence collaboration, governance, and technical resilience, institutions can safeguard their operations and customer trust in a volatile global landscape.

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Distribution: Executive Leadership, CISO, Cyber Risk Management, Third-Party Risk Office

Classification: Open Source

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References

• U.S. Department of the Treasury. (2024). Data Localization and Its Effects on U.S. Financial Firms Operating Abroad. https://home.treasury.gov/data-international-compliance
• Bank Policy Institute. (2025). Challenges of Cross-Border Cybersecurity Regulations. https://bpi.com/cross-border-cybersecurity
• Harvard Kennedy School. (2024). Regulatory Fragmentation and the Erosion of Global Cyber Intelligence Collaboration. https://www.hks.harvard.edu/research
• Government of Canada. (2024). Understanding PIPEDA. https://www.priv.gc.ca/en/privacy-topics/privacy-laws-in-canada/the-personal-information-protection-and-electronic-documents-act-pipeda
• European Commission. (2024). Digital Operational Resilience Act (DORA). https://finance.ec.europa.eu/regulation-and-supervision/digital-finance/digital-operational-resilience-act_en
• Ministry of Electronics and Information Technology, Government of India. (2024). Digital Personal Data Protection Act. https://www.meity.gov.in/data-protection-framework