Global Risk Update

Geopolitical & Security Insights – 7 May 2025

Date: 7 May 2025

Author(s): Custodia Intelligence Team

Report Reference: CIR-070525

Providing Actionable Intelligence for Business Leaders, Policymakers, and Security Professionals

Custodia Global Risk Management

Introduction

In today’s global risk update, Custodia Intelligence delivers strategic insights into escalating geopolitical tensions, cyber threat activity, and financial system vulnerabilities. The India-Pakistan conflict intensifies following targeted military strikes, while the Salt Typhoon cyberattack compromises critical U.S. telecom infrastructure. In Oceania, New Zealand’s central bank warns of emerging economic risks. These developments highlight the growing need for actionable intelligence and threat-led risk assessments to inform decision-making across global operations, from maritime security in the Red Sea to infrastructure resilience in North America

Executive Summary

Escalating regional tensions, cyber sabotage, and signs of systemic financial stress define the global security landscape on 7 May 2025. India’s pre-emptive military campaign in response to a major cross-border terrorist attack has reignited hostilities with Pakistan, raising the spectre of prolonged conflict in South Asia. This confrontation is not only destabilising regional security balances but also disrupting key trade corridors and investor sentiment.

Simultaneously, a sophisticated cyberattack attributed to the China-linked Salt Typhoon group has compromised U.S. telecommunications infrastructure, affecting public sector operations and exposing national vulnerabilities in civil command-and-control systems. The intrusion reflects an evolving threat environment where state-aligned cyber actors target core infrastructure as part of peacetime pressure tactics.

In parallel, the Reserve Bank of New Zealand has issued a warning over rising financial system risks, citing external market volatility, rising household debt, and diminishing liquidity buffers. Although typically viewed as a stable economy, this shift signals emerging fragility that may ripple across similarly exposed markets.

Looking ahead, the risk of regional escalation in South Asia remains high, and retaliatory cyber measures may be under consideration by Western actors. Financial stress indicators should be watched closely for signs of systemic pressure beyond the Pacific.

Thematic Insights: Global Risk Updates

• Geopolitical Flashpoints Intensify: India’s Operation Sindoor represents a marked escalation in retaliatory capability. Market volatility and investor anxiety are rising across South Asia and key trade corridors.

• Cybersecurity as a Strategic Weapon: Salt Typhoon’s breach of U.S. telecom networks marks a trend in peacetime cyber operations targeting command-and-control infrastructure with national security implications.

• Systemic Economic Fragility: New Zealand, traditionally seen as economically resilient, now reports widening stress across household and commercial lending — a signal of regional fragility with global knock-on effects.

• Emerging Market Fragility: Concerns are mounting around currency instability and capital flight in vulnerable markets such as Türkiye and parts of Latin America, driven by tightening global liquidity conditions and regional governance pressures.

Global Situation Analysis

South Asia

• India–Pakistan Conflict: India launched precision strikes on nine militant-linked targets in Pakistan-administered Kashmir following a high-profile paramilitary bombing. Pakistan has placed its air defence forces on high alert. The risk of miscalculation or escalation remains high, with minimal external mediation thus far.

Cybersecurity – Global

• Salt Typhoon APT Activity: Salt Typhoon, a China-aligned cyber threat group, has infiltrated backbone networks of multiple U.S. telecom providers. The attack disrupted data traffic for critical services in healthcare, aviation, and state governments. Cybersecurity agencies warn that latent vulnerabilities remain in compromised systems.

Oceania

• Financial System Stress: The Reserve Bank of New Zealand issued a formal risk advisory noting increased systemic vulnerability. Drivers include rising mortgage default risk, commercial lending exposure, and weaker-than-expected external trade flows. Analysts suggest this may foreshadow broader economic fragility across the Pacific.

Middle East (MENA)

• Maritime Security Tensions: Houthi-linked threats to Red Sea shipping remain active, with UAV and missile launches intercepted by U.S. naval assets. Iran’s Revolutionary Guard has increased naval patrols near the Strait of Hormuz, prompting fresh concerns over the freedom of navigation in one of the world's most vital energy corridors.

Europe

• Information Warfare and Policy Tensions: While no new major escalations were recorded on May 7, EU nations continue to face coordinated disinformation campaigns, particularly targeting defence debates and electoral processes. Western European governments are increasingly vocal about the need for enhanced cyber-defence cooperation and strategic deterrence, although internal cohesion on Ukraine policy remains uneven.

North America

• Cyber Infrastructure Hardening Post-Breach: In the wake of Salt Typhoon’s telecom disruption, U.S. federal agencies and commercial operators have initiated wide-scale cybersecurity reviews and regulatory updates. While no kinetic threats emerged, Washington has elevated its cyber threat posture and encouraged public-private threat-sharing mechanisms.

Central & South America

• Monitoring Political and Migratory Pressure Points: Although no critical incidents were reported on May 7, structural pressures remain. Venezuela’s contested electoral environment and intensified migration through Panama’s Darién Gap continue to strain regional stability. Brazil is monitoring tensions tied to land disputes in forested regions, though violence remains contained.

Risk Level Assessment Matrix

Category	Region	Threat Summary	Likelihood	Impact	Score	Trend	Controls	Priority	Risk Level
Geopolitical	South Asia	India–Pakistan escalation following Operation Sindoor	5	5	25	↑	Weak	Immediate	⚫ Critical
Cybersecurity	Global	Salt Typhoon cyberattack on U.S. telecom networks	5	4	20	↑	Weak	Immediate	⚫ Critical
Economic Stability	Oceania	New Zealand financial system stress due to household and commercial debt exposure	4	4	16	↑	Moderate	Short-term	🔴 High

Risk Level Definitions

• 🟢 Low (1–5) – Minimal concern, routine monitoring

• 🟠 Moderate (6–10) – Monitor and prepare contingency plans

• 🔴 High (11–15) – Elevated risk; proactive mitigation needed

• ⚫ Critical (16–25) – Severe threat; immediate action required

Strategic Recommendations

• Cybersecurity Crisis Readiness: All critical infrastructure sectors — including telecoms, energy, logistics, and public health — should urgently review vulnerability management, apply advanced monitoring, and establish escalation protocols for APT scenarios.

• South Asia Business Continuity: Multinational firms and NGOs with exposure in India, Pakistan, or dependent supply chains should activate scenario-based planning. Consider pre-authorising cross-border response logistics and communication blackout contingencies.

• Financial Risk Contingency Planning: Financial institutions and private equity firms should assess Pacific exposure to secondary contagion from New Zealand’s reported banking stress. Risk scenario testing and short-term liquidity reviews are advised.

Actionable insights and support

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Disclaimer

This report is provided for informational purposes only. Custodia accepts no liability for decisions made based on its content. Risk levels are assessed at the time of publication using verified intelligence sources and are subject to change.