By DEREK SMITH

In 2025, corporate leaders will continue to face multiple workplace risks that can both impact operational performance and employee well-being. In order to safeguard company goals and maintain a resilient workforce, it is important to identify and mitigate these threats. The human factor is becoming ever-more crucial in a world where artificial intelligence (AI) is reshaping risk management.

Regulatory and cyber security risks, along with psychological factors such as leadership behaviour and employee well-being, are among the key workplace challenges.

Regulatory compliance risks

Regulatory environments in the financial services sector are stringent, particularly in The Bahamas, the US and Europe. Non-compliance with anti-money laundering (AML) regulations, the general data protection regulation (GDPR) in Europe, or Common Reporting Standards (CRS) and the US Foreign Account Tax Compliance Act (FATCA), can result in heavy fines and reputational damage. Corporate leaders must ensure robust internal controls, comprehensive compliance training and proactive engagement with regulatory authorities to minimise exposure. According to a report in 2023, financial institutions globally incurred fines of more $5bn for anti-money laundering and Know Your Customer (KYC) regulatory breaches.

Cyber security threats

Due to increasing digitisation, data breaches and cyber attacks pose a serious threat, especially in the financial industry where customer data is highly sensitive. Ransom ware attacks can cause disruptions and erode the trust of customers. Executives should prioritise cyber security governance, regular penetration testing and employee training to maintain a strong defensive posture. An IBM 2024 report noted that financial organisations take an average of 233 days to identify and contain a breach, increasing costs and operational disruption.

Workplace psychological risks

There is a significant correlation between productivity, employee well-being and psychological factors, such as leadership behaviour.

* Leader Behaviour: Micro management and lack of empathy can reduce innovation and efficiency by demoralising teams. To inspire trust and motivation, effective leaders model transparency, listen actively and provide clear direction.

* Employee Well-Being: Employees often burn out in high-pressure environments with unrealistic performance expectations. A 2023 survey by the World Health Organisation (WHO) highlighted that employees in the financial services industry report burnout at rates 1.5 times higher than those in other industries.

Cultural and diversity risks

Group think, missed innovation opportunities and dissatisfaction can result from a lack of diversity and inclusion. Institutions operating across multiple jurisdictions must cultivate inclusive cultures that respect differences and encourage a diversity of perspectives. In order to mitigate these risks, your company should conduct regular cultural sensitivity training and review hiring practices regularly.

Mitigating workplace risks

Addressing these challenges requires a strategic, data-driven approach. Executives should:

1. Conduct enterprise-wide risk assessments tailored to geographic and sector-specific challenges.

2. Invest in leadership development programmes to enhance emotional intelligence and adaptive decision-making.

3. Foster a culture of psychological safety where employees feel valued and supported.

Managing regulatory compliance, technological resilience and employee well-being will enable executives to maintain flexibility and competitiveness while mitigating workplace risks. Achieving sustainable growth in today’s complex financial landscape requires recognising how operational risk interacts with human factors.

• NB: About Derek Smith Jr

Derek Smith Jr. has been a governance, risk and compliance professional for more than 20 years with a leadership, innovation and mentorship record. He is the author of ‘The Compliance Blueprint’. Mr Smith is a certified anti-money laundering specialist (CAMS) and the assistant vice-president, compliance and money laundering reporting officer for CG Atlantic’s family of companies (member of Coralisle Group Ltd) for The Bahamas, St Vincent & The Grenadines, St Lucia and Curaçao.