Risk Technology Awards 2025: Tariff turmoil’s tech effects

Upheaval in US trade policy drove demands for more data, more simulations as supervisors pushed banks to plan for the worst

Key points Summary Q&A

• Technology vendors have been facing demands for richer data, plus more frequent and comprehensive stress tests, as clients try to gauge the impact of Trump’s tariff plans.
• In one case, banks have been pushed by supervisors to review strategic and recovery plans, assuming the tariffs are implemented in full after the current 90-day freeze ends next month.
• The diverse possible impacts – and cascading knock-on effects – have prompted some vendors to look again at how they capture the range of possible outcomes.

 

These summaries are generated by an LLM, but edited by humans.

A decade ago, when speaking to banks about Credit Benchmark – then a young firm – David Carruthers occasionally brought up supply chain risk and trade credit risk. It felt like a winning hand for the firm, which collected default probabilities from lenders, using them to build a more inclusive set of ratings than agencies could offer – many more companies take out loans than those who issue public debt.

So, Carruthers argued, lenders who wanted to understand supply chain exposures should participate in Credit Benchmark’s exercise in consensus credit scoring.

The pitch often fell flat.

“People’s eyes glazed over. And if you mentioned trade credit risk, they were like, ‘Well, that doesn’t seem to be a big deal’,” he says.

Trump’s tariff roll-out – and partial roll-back – has changed all that, by applying sudden stress to firms all over the globe that are involved in US-exporting supply chains.

“Now it’s all different,” says Carruthers. “Everybody’s going to be looking quite closely at our data. In some cases, it’s very name-specific, and you only need one name in your supply chain to be a problem.”

Credit Benchmark had already decided to ramp up the frequency of its credit updates from monthly to weekly. This proved immediately helpful in the aftermath of the tariff announcement, helping users keep tabs on rapidly souring sentiment for some sectors. The impact was first seen in April, with credit downgrades of companies in the forestry, auto parts, real estate and industrial engineering sectors. As examples, the proportion of Canadian oil and gas producers downgraded in April was 6%, compared to an average downgrade rate of 1% in the months prior to the tariff announcement; EU consumer goods downgrades moved from a 3% share to 7%; and US food and drug retailers jumped from 5% to 10%.

I think everybody is going to look inwards. In uncertain times, people tend to look at how they can save money

Jonas Jacobi, ValidMind

Many other technology vendors also faced new demands and expectations in the confused, volatile weeks after the April 2 tariff announcement – a trend some anticipated. Among the more-than-140 pitches to this year’s Risk Technology Awards (all of which were submitted prior to April) were a host that flagged the heavily trailed tariffs as a potential source of stress for clients. Those expectations were borne out.

Some bank clients of Prometeia, for example, have been asked by their supervisors to revisit their strategic plans, recovery plans, and risk forecasts, and assume that Trump’s tariffs are implemented in full once the current, 90-day pause lifts – a task with which the software vendor is helping. The firm won this year’s ‘Bank ALM’ category.

At SS&C Algorithmics, scenarios and simulations have also been the focus, with clients wanting to run more comprehensive – and more frequent – analysis of their positions, under a range of different assumptions. The firm has had to think about how to capture the complex, cascading effects that might result from US trade policy.

Running those simulations potentially requires more computing capacity, but the new tension between Europe and the US means it’s no longer as simple to just dial up new virtual machines from US cloud providers. Many clients now want their data processed locally rather than on international servers, says Paolo Laureti, a director and product manager with the firm.

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“We have seen more concern about the physical location of the data centres and concerns about business continuity,” he says.

SS&C Algorithmics won this year’s ‘Life and pensions ALM’ award.

At first glance, it might seem as though all of this uncertainty would be a good thing for technology vendors – pushing new clients into their arms, and prompting existing customers to ask for new or tweaked services. Of course, tech users aren’t just facing uncertainty about the risk profile of their books – they are also facing uncertainty about their own, near-term commercial prospects, which could hold up spending plans.

For ValidMind, winner of this year’s ‘Model risk service’ category, that may actually be a tailwind. Jonas Jacobi, the firm’s chief executive, says ValidMind has seen more interest from prospective clients this year as model users have been forced to consider how they can test, validate and document their models more efficiently.

“I think right now we’re sort of in the eye of the storm,” says Jacobi. “I think everybody is going to look inwards. In uncertain times, people tend to look at how they can save money. What can I do inside my organisation to make us more efficient so that I don’t have to hire? For us, I think we’re in a very strong position.”

Slicing and dicing

Credit Benchmark was one of this year’s awards participants that flagged the tariff threat when pitching.

“Trade restrictions, export controls, and shifting trade policies are likely to contribute to supply chain volatility, supplier defaults, delayed production, and rising costs,” the company argued. “These disruptions pose significant risks for credit analysts and risk managers who must assess the creditworthiness of suppliers and counterparties impacted by these challenges.”

When Trump’s slate of tariffs was first unveiled, much of the attention focused on the heavy burden facing major emerging market manufacturing nations. Credit Benchmark noted that such countries are “especially vulnerable due to their dependence on global trade and exposure to currency fluctuations”, and flagged that one broken link in a complex, cross-border chain means distress can quickly be transmitted to other parties around the world.

I see a trend of increasing number of stress tests, and not only stress tests on deterministic scenarios and areas that combine different risk factors, but also large simulations under stress

Paolo Laureti, SS&C Algorithmics

This is increasing demand for credit data – Credit Benchmark claims – and the firm is trying to seize the opportunity, not just by increasing the frequency of updates, but also by making them more granular. In the past, the firm provided reports with the data broken out by country and industry sector. This year, it has added more metadata to its systems, allowing the research team to cut the data in new ways, for instance breaking countries down into constituent regions.

“Banks are trying to take a more holistic credit portfolio view. What they’re trying to do now is to understand what their overall exposure looks like, and that means they want to look at whether some sectors and countries are more or less correlated in terms of how credit risk is behaving,” says Carruthers.

“There’s definitely appetite for more bespoke indices. The more detail you can provide the happier people are,” he adds.

Plan for the worst

That sentiment is echoed by Maurizio Pierigé, senior partner at Prometeia.

Trump’s tariffs have left bank ALM teams contending with fluctuating exchange rates and asset values, as well as increased – and hard to divine – default risk among issuers. This has affected bank hedging strategies and caught the eye of regulators.

Pierigé says some clients have been asked by their banking supervisors to incorporate uncertainty caused by Trump’s tariffs into their strategic planning, risk forecasting and recovery planning processes. Prometeia has been developing scenarios based on what would happen to balance sheets if the full slate of April 2 tariffs was fully implemented.

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“We are now discussing with the chief executives and boards of those banks, what will need to change in these plans, to incorporate the geopolitical risk and also alternative scenarios,” he says.

There is a growing expectation that the tariffs will not be fully implemented when the 90-day pause ends, but risk managers, boards and supervisors do not have the luxury of working to the best-case outcome.

The trick is working out what the worst-case might actually look like. This is not easy, notes Pierigé, because a punishing new US trade policy “might simultaneously generate different impacts on different areas of the economy”, with announcements affecting demand for goods and services with knock-on effects on supply chains, individual companies and entire economies.

As a result, the company is improving its framework to take into account what Pierigé calls “multifaceted risk factor events” with “bi-directional interaction”. In effect, this would enable the firm to consider connections between macroeconomic and sectoral risk factors so that if, say, a blanket tariff hits EU countries, and a separate one applies to car manufacturers, then the effects on EU GDP would be factored in alongside the second-round effects on German GDP, which has a high exposure to that sector.

Putting it all together

SS&C Algorithmics is also working on linking risk factors – or ‘cascade effects’, to use the firm’s term.

Most of the vendor’s insurance clients do their credit risk and market risk calculations in separate siloes, then aggregate them using a correlation matrix, says Laureti.

“It’s not the same as doing it scenario by scenario and looking – under each scenario – at what happens to credit ratings, to default probabilities, to spread changes in the event of default, and so on. We have a consistent framework that is built specifically for buy-side insurance clients, and there is growing interest in that, especially for asset/liability management,” he says.

Laureti says the Trump tariff announcement has led to clients wanting to do more comprehensive stress testing more regularly, and this has increased the need for computing capacity and speed.

“I see a trend of increasing number of stress tests, and not only stress tests on deterministic scenarios and areas that combine different risk factors, but also large simulations under stress,” he says.

SS&C launched its ‘hyper’ high-performance computing product for buy-side clients earlier this year, cutting the time taken for some simulations down to minutes, says Laureti.

Risk Technology Awards 2025: roll of honour

The winners

ERM, regulation and cross-risks

Risk dashboard software of the year: Quantifi

Regulatory capital calculation product of the year: S&P Global Market Intelligence

Bank ALM system of the year: Prometeia

Life and pensions ALM system of the year: SS&C Algorithmics

Regulatory reporting system of the year: Wolters Kluwer

Best vendor for systems support and implementation: Quantifi

Model risk service of the year: ValidMind

GRC product of the year: Swiss GRC

Operational risk

Cyber risk/security product of the year: ReadiNow

Financial crime product of the year: LexisNexis Risk Solutions

Trade surveillance product of the year: TT Trade Surveillance

Third-party risk product of the year: S&P Global Market Intelligence

Consultancy of the year, op risk: PwC

Credit risk

Credit data provider of the year: Credit Benchmark

Credit stress-testing product of the year: Wolters Kluwer

IFRS 9 solution of the year: Acies

Credit risk innovation of the year: Cumulus9

In-house systems

Best in-house credit risk technology: Generali Asset Management

Best in-house climate risk initiative: Morgan Stanley

Best in-house risk data initiative: EFG Bank

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Methodology

Technology vendors were invited to pitch in 27 categories by answering a standard set of questions within a maximum word count. More than 145 submissions were received, resulting in over 70 shortlisted entries across the categories. A panel of 11 industry experts and Risk.net editorial staff reviewed the shortlisted entries, with judges recusing themselves from categories or entries where they had a conflict of interest or no direct experience.

The judges individually scored and commented on the shortlisted entrants, before meeting in April to review the scores and, after discussion, make final decisions on the winners.

In all, 20 awards were granted this year. Awards were not granted if a category had not attracted enough entrants, or if the judging panel was not convinced by any of the pitches.

The judges

Nicola Crawford, interim CRO, JN Bank

Sidhartha Dash, chief researcher, Chartis Research

Vishnupriya S Devarajulu, software engineer, American Express

Christian Hasenclever, senior manager, risk management, X1F

Deborah Hrvatin, chief risk officer, CLS Group

Michael Grimwade, managing director, operational risk, ICBC Standard Bank

Becky Pritchard, contributor and awards manager, Risk.net

Andrew Sheen, independent consultant

Jeff Simmons, head of advisory group and risk management and compliance lead, Alba Partners

Jagat Singh, director, software engineering (risk and pricing), Ice Clear Credit

Duncan Wood, global editorial director, Risk.net