What do the UK, US, Mexico, South Africa, European Parliament, and India have in common? They, among many other countries, are all holding elections in 2024, which will impact the geopolitical state of the world and the global banking industry.

In the session ‘The Globe At The Polls: What 40+ Elections Around The World In 2024 Means For Our Sector’, at ifgs 2024 that took place in the Guildhall in London, journalist Edie Lush hosted a panel on what global elections means for the financial industry, with speakers Christopher Woolard, UK fintech leader and global financial services regulatory network chair at EY, Iain Anderson, founder and managing director at Cicero, and Jessica Renier, managing director and head of digital finance at the Institute of International Finance.

64 countries are holding elections this year, not including the EU, which means that nearly half the world is holding national elections, nearly 1.5 billion people will head to the polls, and that will definitively have worldwide economic, social, and geopolitical consequences in coming years.

Source: Visual Capitalist

Touching on geopolitical risk, Woolard said that international unrest can seem distant while businesses are at the initial stages of their development, but it does impact the environment fintechs are in as they grow. He notes that as geopolitics become more divisive, a lot more nuance will be required for companies that are looking to operate internationally.

In the UK, the moderator stated that a Labour government is likely on the horizon, which will have implications for the public sector and financial services, especially when it comes to spending. Anderson responded by saying that what the UK public is seeking is certainty and predictability in their policy.

He continued: “Labour has talked about a sandbox for the underserved and that is a key idea in terms of financing growth and an opportunity to see the democratisation of finance.”

Going back to global politics, Renier explained that the world is marching towards a protectionist stance and away from the globalised stance it was in before, which will be damaging for AI development. She outlined how the “patchwork” of AI policies developed in separate countries in a vacuum will not be able to be put together to make a cohesive “quilt”. 

She commented: “I do worry a bit about direction of protectionism we're moving in, but I do think that at some point we will reap what we have sown from a range of data protection and data sharing policies have evolved to work together.”

Woolard added that sustainability is a global issue, but there are different ways to approach it and various ESG frameworks that need to be adopted depending on the regulations of various states, and firms will be experiencing friction in trying to fit into multiple frameworks as they expand.

Anderson highlighted that there needs to be a dialogue between the government and the industry. He stated that it lies with the politicians to decide the level of risk they want to set for the economy.

Renier explained how countries are looking at development and risk: “In such a wide range of jurisdictions, there are about three different priorities and that show up an infinite amount of times when discussing development; and any one of these countries in an election  year is either thinking about regulation first, setting technical standards first, or investments and capability building first. We see each country prioritise those three pieces in a different order, depending on what infrastructure they have and the level of risk it is willing to take, and I think that will explain a lot of the development, time, and investment happen with some of the technologies we are looking at.”

She added that in there will be technology standards being set up in the US surrounding AI and quantum, and that the US tends to not act as quickly as the EU when it comes to regulation, but they need to be able to strike a balance between regulation principles-based variations and specific variations going forward.

The use of AI to spread misinformation is a major concern for the upcoming elections, especially as AI and deepfake technology is still in process of development and majority of AI remains unchecked by regulatory frameworks. Online tracker rest of world tracks major AI misinformation circulating concerning the elections, which can provide people with an insight into the sheer volume of AI-generated lies are being spread to entertain voters and sway political stances.

“In order to support growth we need to be thoughtful about just how quickly we rush to very specific variations as to the principle-based, by which is fairly common here in the UK; entertaining a principles approach.”

Anderson agreed that the balance is critical, and that there is a lot of growth and potential focused right here in the UK.

Among the major elections that already took place this year was the election in Pakistan, where the Pakistan Muslim League (N) and Pakistan People’s Party won the most seats and formed a coalition government with Shehbaz Sharif as prime minister, and Taiwan, in which Lai Ching-te of the Democratic Progressive Party, vice president to the previous president, won the vote and will be inaugurated in May. In Russia, Vladimir Putin was elected into his fifth term as president. In Indonesia defence minister and retired army general Prabowo Subianto won the election by the highest amount of votes in Indonesian history, and in South Korea the liberal opposition party the Democratic Party (DPK) won by a landslide against the People Power Party.

Upcoming elections to keep an eye on that will shift the fintech industry globally are the elections in the EU, UK, India, and the US.