Physical operations are expected to pose the biggest challenge to supply chains during the first part of 2024, while politics will create more uncertainty for suppliers later in the year.

According to an S&P Global Market Intelligence report published December 26, physical operations will be the biggest challenge for companies in the beginning of 2024 with the ongoing conflict in the Middle East coupled with climate issues that have disrupted shipping networks.

Even if those issues are resolved, politics “introduces a renewed round of uncertainty” the S&P report said. The report claimed that this year's political uncertainty will lead to a rise in protectionism that will likely impact supply chains in late-2024 and early 2025.

“Many of the main themes for 2024... will be contingent on global events and the situation organizations find themselves in as a result of them. While new regulations can be planned for, what we know from recent experience – COVID, the invasion of Ukraine, the situation between Israel and Gaza – is that things can be unpredictable. The job that risk and compliance teams need to do in relation to these global events can change extremely quickly,” wrote Nicola Passariello, the financial crime practice lead for Moody’s Analytics, in a December 21 blog post. “Unplanned risk and compliance factors can have significant impact on operational controls and practices." Passariello added that companies already using automation with access to well-organized data will "fare best” in 2024.

Moody's said that 2024 will be a year in which financial crime and third-party risk are approached as holistic issues, with the company stating that "compliance and risk management practitioners need a 360-degree view of counterparty risk.”

“Fraud, sanctions, money laundering, terrorist financing don’t exist in isolation, so silos need to be removed," wrote the blog's authors. "Events can come from left-field, so 2024 is about having a holistic view of risk, using data-driven insights, so processes are robust enough to deal with risk and compliance issues as they stand, which are also flexible enough for whatever may come.”

The cost of environmental policies is also expected to rise, while new trade deals will likely take place in 2024, according to the S&P Market Intelligence report.