RISKS IN THE NEWS - October 5, 2025

Risks in the News

Date: October 5, 2025

Published by: International Association of Risk and Crisis Communications (IARCC)

The International Association of Risk and Crisis Communications monitors and reports on critical global developments affecting business continuity and resilience. In this report, we highlight key emerging threats, grouped into five primary risk categories: Operational, Strategic, Financial, Compliance, and Reputational. These real-world examples serve as timely reminders that risks—if not proactively managed—can escalate rapidly across systems and sectors.

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Operational Risk Operational risk refers to disruptions caused by failures in internal systems, processes, human error, or external events. These failures can have serious consequences for day-to-day operations and overall business performance.

Issue: Mystery drones have been circling Munich Airport for several nights running, forcing officials to shut down runways repeatedly. Nearly 3,000 passengers found themselves stranded as flights were cancelled or diverted to other cities. German authorities launched helicopter searches but came up empty-handed—no drones captured, no operators identified.

Risk: Every time the airport closes, airlines hemorrhage money from cancelled flights while time-sensitive cargo sits grounded. But the bigger problem is trust. When passengers start questioning whether their flight will actually take off, they book with competitors or choose different routes entirely. That kind of damage takes years to repair, and it shows up in quarterly earnings long after the drones disappear.

Mitigation Strategy: Munich Airport didn’t improvise—they had plans sitting in a drawer for exactly this scenario. Their team coordinated with German federal police and national air traffic controllers to safely reroute incoming planes to nearby airports. Meanwhile, ground crews handed out blankets, meals, and set up temporary sleeping areas for stranded travelers. Behind the scenes, airport executives were already lobbying government officials in Berlin for expanded legal powers to shoot down or jam unauthorized drones without waiting for lengthy approval processes.

Communications Strategy: The airport’s crisis team understood that silence breeds panic. They pushed constant updates through their website and fired off text messages directly to passengers whose flights were affected. Importantly, they resisted the urge to hold immediate press conferences when they didn’t have solid answers. Instead, they waited until they could present verified facts and designated one senior spokesperson to handle all media inquiries. That prevented the chaos of conflicting statements from different officials.

What’s Next: European Union interior ministers are already scheduling emergency sessions to hammer out unified anti-drone regulations that work across borders. Insurance companies, meanwhile, are taking notes. Expect them to require airports to install sophisticated drone detection systems as a condition for renewing coverage. Airports that drag their feet may find themselves uninsurable—or facing premium increases that make their eyes water.

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Strategic Risk Strategic risk emerges when an organization’s long-term plans are misaligned with changing market dynamics or internal capabilities. Poor governance, flawed decision-making, and failure to adapt can severely impact competitiveness and sustainability.

Issue: Washington and The Hague dropped export restriction bombs this week on the semiconductor industry. The United States and Netherlands simultaneously tightened rules on shipping advanced chip making equipment and artificial intelligence processors to certain countries. Giants like NVIDIA, Taiwan Semiconductor Manufacturing Company, Intel, and Dutch equipment maker ASML immediately felt the squeeze.

Risk: Here’s the domino effect: Companies can’t get the specialized tools or chips they need, so product launches get pushed back months. Manufacturing costs spike because you’re scrambling for workarounds. Meanwhile, competitors in countries without these restrictions keep moving forward, potentially grabbing your market share. For tech companies living on razor-thin launch windows, delays can mean the difference between market leadership and irrelevance.

Mitigation Strategy: NVIDIA’s legal team immediately filed applications for special export licenses while their engineers worked overtime modifying product designs to stay under the new regulatory thresholds. ASML, the Dutch equipment maker, carefully synchronized their delivery schedules with the Netherlands’ new export approval windows—ship too early and you violate regulations, too late and you lose the customer. Taiwan Semiconductor and Intel took a different approach: they diversified their supplier networks and started hoarding critical components, building bigger buffer inventories to weather future disruptions.

Communications Strategy: These companies knew their investors would panic without clarity, so they got ahead of the story. They disclosed the financial hit in mandatory financial filings and held direct investor calls, walking through which product lines face delays and exactly how much revenue they expect to lose. They also held separate briefings with key suppliers, reassuring them that despite near-term chaos, the long-term partnerships remain solid. Nobody likes surprises when billions are on the line.

What’s Next: These export controls won’t stay static. Governments will keep tweaking them as they try to balance national security concerns against economic competitiveness—it’s a political tightrope. Watch for allied nations to launch joint programs aimed at building more resilient semiconductor supply chains that don’t depend on potential adversaries. Companies should prepare for this to be an ongoing negotiation, not a one-time adjustment.

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Financial Risk Financial risk involves exposure to market volatility, credit stress, and liquidity shortages. These risks can threaten an organization’s solvency and limit its access to capital markets.

Issue: Government debt auctions flopped spectacularly this week. When Britain and the United States tried to sell 30-year bonds, investors essentially shrugged and walked away. Demand was so weak that treasury officials had to pull back and offer fewer bonds than planned. It’s the financial equivalent of throwing a party where nobody shows up.

Risk: When government borrowing costs rise, the pain spreads everywhere. Corporate bond markets move in sympathy—if the government has to pay more to borrow, companies certainly will too. Firms with maturing debt face eye-watering refinancing costs. Companies already carrying heavy debt loads watch their interest expenses climb, squeezing profit margins and forcing difficult choices about layoffs, delayed investments, or selling assets.

Mitigation Strategy: British debt managers quickly scaled back how much they were trying to sell, while the Bank of England hit the brakes on its program of selling off bonds it had accumulated over years of economic stimulus. Corporate treasurers, sensing trouble, started tapping their revolving credit lines—basically drawing cash now before banks tighten lending standards. Others accelerated negotiations with lenders to extend debt deadlines, essentially kicking the refinancing can down the road and hoping conditions improve.

Communications Strategy: Chief financial officers sent targeted briefings to their lenders and bond investors, essentially saying: “Here’s exactly how much cash we have right now, here’s what debt comes due when, and here’s what we’ve already done to protect ourselves.” That kind of transparency prevents rumors and maintains access to credit markets when you need it most.

What’s Next: Every word from central bank officials will be parsed like an ancient prophecy. Markets are hunting for signals about whether interest rates will rise, fall, or hold steady. If these auction problems persist, expect dramatic coordinated intervention—central banks and treasury departments working together to stabilize markets. Companies should stress-test their balance sheets now for higher interest rate scenarios.

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Compliance Risk Compliance risk arises from the failure to adhere to regulatory requirements, ethical standards, or internal policies. It can result in legal penalties, reputational damage, and operational disruption.

Issue: Britain’s Financial Conduct Authority publicly dressed down multiple investment brokerages this week for running sloppy operations. The regulator called out weak systems for monitoring trades and inadequate oversight of computer algorithms making split-second trading decisions. The subtext was clear: fix this immediately or face consequences.

Risk: Getting caught with weak controls opens companies to a world of hurt. Regulators impose substantial fines that hit quarterly earnings. They can suspend trading operations, which is a death sentence for firms whose business is, well, trading. Worse, clients flee once your name appears in regulatory enforcement actions—nobody wants their money managed by the firm that couldn’t manage its own compliance.

Mitigation Strategy: Targeted firms went into emergency mode, implementing immediate fixes like requiring human approval for any unusually risky trades while their technology teams patched monitoring systems. Several brought in outside compliance consultants—essentially admitting they needed adult supervision—to conduct thorough audits and build detailed plans for fixing everything regulators flagged. They also established weekly progress reports to send regulators, showing they’re taking this seriously.

Communications Strategy: Firms under scrutiny didn’t try to hide. They notified regulators about their remediation efforts, hired major accounting firms to independently verify their progress, and held frank conversations with their biggest institutional clients. The message: “Yes, we have a problem. Here’s specifically what we’re doing to fix it, and here’s the timeline.” That kind of transparency helps maintain client relationships during crises.

What’s Next: The Financial Conduct Authority is preparing a public report that will almost certainly name non-compliant firms and detail penalties. It’s going to be ugly reading for companies featured. Smart competitors should be auditing their own trade monitoring and algorithm controls right now, before regulators come knocking on their door next.

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Reputational Risk Reputational risk refers to the potential damage to an organization’s image, stakeholder trust, and public perception. It often results from ethical breaches, poor crisis response, or actions that conflict with stated values.

Issue: WestJet disclosed a data breach this week affecting passenger personal information. The Canadian airline emphasized that credit card numbers weren’t stolen, but declined to specify exactly how many passengers were affected. Under United States law, they sent direct notifications to American residents whose data was exposed.

Risk: Data breaches trigger cascading damage that extends far beyond the initial incident. Customer trust evaporates—people start booking with competitors who haven’t had recent security problems. Class-action lawyers smell blood in the water and start filing lawsuits seeking damages. Regulators launch investigations that often uncover additional security gaps, leading to more headlines and more damage. Meanwhile, your brand takes a beating on social media as customers vent frustration and competitors subtly highlight their own security measures.

Mitigation Strategy: WestJet immediately launched an internal investigation using forensic specialists to figure out how the breach happened and what data actually got exposed. They coordinated with the Federal Bureau of Investigation in the United States and the Canadian Centre for Cyber Security, treating this as both a criminal matter and a national security concern. The airline proactively notified affected passengers rather than waiting for them to find out through news reports, and implemented enhanced monitoring to catch any suspicious activity in their systems.

Communications Strategy: WestJet took ownership publicly. They sent direct notifications to impacted passengers, published detailed statements clarifying exactly what type of information was exposed and what wasn’t, and put senior executives in front of media inquiries rather than hiding behind public relations representatives. They committed to regular updates as the investigation progressed, understanding that information vacuums get filled with speculation and conspiracy theories.

What’s Next: Expect this story to have legs. Media will continue covering it, regulators will dig deeper into WestJet’s security practices, and privacy advocates will use this as ammunition for stricter data protection legislation. Plaintiff attorneys are almost certainly preparing class-action lawsuits claiming negligence. The airline industry may face renewed calls for transparency around how they use artificial intelligence and algorithms to process passenger data, with demands for clearer labeling of automated systems.

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