Partner, Risk Advisory National Leader
For many New Zealand businesses, materialised risk and disruption is no longer the exception. It has become the operating norm. Over the past six years we’ve faced a global pandemic, geopolitical tension, conflict, severe weather events, inflation, supply chain disruption and the rapid rise of AI and emerging technologies. For business owners and leaders, this changes the calculation. There may no longer be perfect conditions or an obvious right time to act. Fuel price surges, shipping and logistics disruption, border settings that affect immigration and access to talent, inflation and price volatility, cost-of-living pressure and political instability, at home and abroad, all paint the same picture. Waiting for certainty may mean waiting indefinitely, and the cost of delay can be easy to underestimate. While one business holds off, others are adapting, investing and accelerating. The real risk is not making the wrong move in uncertain conditions. It is standing still while the environment, and your competitors, keep moving. – Tarunesh Singh, BDO Risk Advisory National Leader
The BDO Global Risk Landscape Report surveyed 500 business leaders around the world, to explore the attitudes of risk leaders towards evolving challenges such as geopolitical tensions, artificial intelligence, and supply chains and offers practical takeaways to help manage risks.
In this report, we explore the key themes identified in the BDO Global Risk Landscape Report and what they mean for New Zealand business leaders, with expert insight from BDO's Risk Advisory National Leader, Tarunesh Singh.
The global findings point to a business environment where crisis response is becoming routine, but proactive risk management is becoming harder to sustain.
Geopolitical instability is also intensifying other risks, while fraud remains underestimated and many organisations continue to respond reactively rather than taking a more proactive approach to risk management.
▲ 17% from last year
New measure this year
Same as last year
▼ 4% on last year
▼ 11% on last year
▲ 12% from last year
▼ 9% on last year
“New Zealand businesses appear increasingly resilient. They may not be optimistic, but they are adapting, making decisions and focusing on areas they can influence. Business leaders have spent years navigating disruption. Geopolitical tensions, economic volatility, technology change, cyber threats and regulatory complexity have become part of the operating environment. The businesses succeeding today aren't waiting for certainty. They're focusing on what they can control, building resilience, and making informed decisions despite uncertainty.”
The May 2026 BDO Business Performance Index reinforces this point and indicates that business leaders are becoming more positive about areas they can control, including risk management, compliance, systems and technology performance, and internal operations, while remaining cautious about external economic and political conditions. This suggests that many leaders are not waiting for the environment to become easier. They are focusing on the parts of performance and resilience they can actively influence.
Of the top global risks, Tarunesh sees cyber and AI, geopolitics and fraud as three of the most relevant for New Zealand businesses. However, for local business leaders, regulatory compliance also warrants specific attention. While it may not sit in the global top three, New Zealand businesses are operating in an environment shaped by increasing regulatory complexity, changing reporting obligations and heightened expectations around governance, transparency and accountability.
Cyber and AI are now closely connected risk areas for business leaders. Cyber is the top global risk at 40%, up from 23% in 2025, while AI is the second-highest risk at 27%, newly measured this year. Together, they show how quickly digital transformation can create new vulnerabilities when governance, controls and capability do not keep pace.
The New Zealand context shows why this matters. Cybercrime is already creating significant financial and operational harm, and AI-enabled tools can make scams, impersonation attempts and cyber-attacks more sophisticated, personalised and scalable.
New Zealand’s Cyber Security Strategy, released in February 2026, estimates that New Zealanders are losing more than $1.6 billion annually to cybercrime, predominantly through cyber-enabled fraud. In the first quarter of 2026 alone, the National Cyber Security Centre responded to 1,164 cyber incidents, including three highly significant breaches affecting essential services. Direct financial losses from these incidents totalled $5.6 million.
As businesses digitise operations and adopt AI tools, their exposure increases across systems, data, people and third-party platforms. AI can improve productivity and decision-making, but it can also amplify existing weaknesses in data quality, access controls, compliance processes and cyber resilience.
“Cyber and AI should not be treated as separate risk conversations. AI is changing how businesses operate, but it is also changing how threats emerge, how data is used and how quickly weaknesses can scale. For New Zealand business leaders, the priority is to understand where sensitive data sits, how AI tools are being used and whether controls work in practice. Strong digital resilience depends on clear accountability, informed people and practical governance that keeps pace with change.”
The global risk environment has been in constant flux for more than a decade. While geopolitical conditions remain unpredictable and volatile, the BDO Global Risk Landscape Report shows geopolitical risk has plateaued year-on-year. Rather than suggesting the risk has eased, this indicates businesses are increasingly treating geopolitical uncertainty as part of the operating environment, one that needs to be built into planning, investment decisions and resilience strategies.
“Geopolitics is no longer a standalone risk. It acts as a multiplier, cutting across supply chains, pricing, regulation, cyber, talent and customer demand. For New Zealand businesses, this matters because our distance from major markets can amplify disruption when global tensions affect shipping routes, energy prices or access to critical goods. Business leaders do not need to predict every geopolitical event, but they do need to understand where their business is exposed. That means mapping key dependencies, stress-testing supply chains and building enough flexibility into operations to respond quickly when conditions shift.”
The May 2026 Business Performance Index reflects the same tension. While more businesses are demonstrating resilience, overall positivity remains constrained by external economic and political uncertainty. Many businesses are adapting internally, but external pressures continue to affect investment, pricing, supply chains and planning decisions. Positivity with external political factors has declined 7% since September, now ranking second lowest (previously fourth lowest) – likely influenced by the war in Iran and New Zealand’s upcoming General Election.
It is a common narrative that the economy can slow in the lead-up to a general election, as households and business leaders defer some investment or purchasing decisions until the policy direction becomes clearer. With New Zealand’s 2026 General Election scheduled for 7 November, political uncertainty is likely to remain one factor affecting confidence through the second half of the year. The Reserve Bank of New Zealand increased the Official Cash Rate from 2.25% to 2.5% on 8 July 2026, noting that it uses the OCR to keep inflation low and stable. Higher interest rates can flow through to mortgage, loan and savings rates, which may affect consumer spending, borrowing decisions and business confidence.
“Geopolitical uncertainty is not something New Zealand businesses can wait out. Whether it is conflict in the Middle East, pressure on fuel prices, shifts in US trade and foreign policy, or the next unexpected disruption, there will always be another reason to pause. But waiting is no longer a strategy. It is a risk.”
According to the 2026 BDO Global Risk Landscape Report, while 79% of business leaders said they had a plan to defend against AI-driven fraud last year, 93% don’t rank fraud as one of the major threats they’re unprepared for this year. This raises an important question: has fraud risk has reduced, or it is being absorbed into broader cyber and AI concerns?
According to New Zealand’s Serious Fraud Office, fraud (including cybercrime), is still the most prevalent crime type in the country and continues to show substantial growth while the prevalence of other crimes has decreased over time. Undoubtedly this tracks with how rapidly advancements in technology have created increasingly sophisticated scams, including more recently, AI-powered deepfake technology which enables automated scams at scale.
Despite this, just 13% of business leaders surveyed are actively monitoring and updating their defences, specifically for AI-enabled fraud in 2026.
“Fraud may be underreported as a standalone risk because it is increasingly being absorbed into broader conversations about cyber and AI. For New Zealand businesses, that makes it more important, not less. Scams are becoming more sophisticated, more targeted and harder to detect, particularly as AI enables impersonation, deepfakes and automated attacks at greater scale. Business leaders should not wait for fraud to appear as a separate item on the risk register before acting. Take the time to review internal controls, test approval processes, strengthen staff awareness and make sure financial, technology and governance teams are working together to identify weaknesses before they are exploited.”
At the same time, AI is increasingly being viewed as part of the solution. Seventy percent of business leaders surveyed expect their organisations to increase their use of AI to identify fraud over the next two years, compared with 39% today. This points to a clear shift in how businesses are thinking about fraud prevention, but technology alone will not be enough. AI-enabled detection needs to be supported by strong controls, clear accountability and people who know how to identify and escalate suspicious activity.
Regulatory requirements for companies are increasing globally, and New Zealand businesses are not exempt. Regulatory change can move quickly, creating additional cost, complexity and time pressure for business owners.
In New Zealand, we’re seeing heightened levels of compliance risk, where businesses fail to adhere to certain rules and regulations, often inadvertently. Non-compliance can result in reputational damage, data breaches, loss of revenue, legal implications and organisational shutdowns, so it’s essential for business owners and leaders to keep a watching brief on the rules and regulations impacting them.
“For New Zealand business owners, regulatory compliance is no longer just an administrative task. It is becoming a test of how well a business understands its obligations, protects its people and customers, and adapts when the rules change. The challenge is that many smaller businesses do not have dedicated compliance teams, so new requirements can quickly become another pressure on already stretched owners and managers. The priority is not to overcomplicate compliance, but to stay informed, focus on the obligations that create the greatest risk, and build simple systems that make it easier for people across the business to do the right thing consistently.”
Considerable work is underway by various parties in New Zealand to address compliance burden concerns raised by small and medium-sized businesses. In fact, the May 2026 BDO Business Performance Index showed that business leaders are feeling more positive about meeting tax compliance and commitments, and meeting other regulations and compliance than they were six months ago. However, there are still some significant regulatory updates for business owners to navigate this year.
These risks matter not only because they can disrupt operations, but because they can delay the decisions business owners need to make about growth, succession, investment and transformation. For many business owners, the practical challenge is not identifying uncertainty. It is deciding what to do next despite it.
Many business leaders are delaying growth, investment, technology decisions or succession planning while waiting for conditions to improve. But what if uncertainty is simply the permanent operating environment?
“In my own work with clients across sectors, a consistent pattern is emerging. The businesses that keep moving are not the ones with the most certainty. They are the ones with the clearest view of their own risks. Much of the advice being sought right now is less about predicting what happens next, and more about making confident decisions in spite of it - how to invest, restructure, transition ownership or adopt new technology without taking on risk they cannot see or manage. What people are waiting for varies, but the theme is familiar. Some are waiting for interest rates or the economy to settle, some for the election and policy direction to become clear, and others for the right successor, the right buyer or the right moment to modernise. The common thread is a hope that acting later will feel safer. In many cases, it will not.”
What stands out about the businesses continuing to move forward is discipline rather than appetite for risk. They understand where their real exposures sit, they have tested their controls, and they surround themselves with the right advice before they need it. That preparation is precisely what gives them the confidence to act.
Encouragingly, there are areas where businesses can move forward now, provided the right safeguards are in place. Growth and investment decisions can proceed where they are supported by a clear plan, sound financials and honest stress-testing. Ownership transition and succession can begin well ahead of any exit, through early conversations and a documented roadmap. Digital and AI adoption can accelerate where it is matched by strong governance, clear accountability and controls that are tested in practice. In each case, the safeguard is not delay. It is doing the groundwork that makes action defensible.
Recent BDO Business Performance Index findings suggest that New Zealand businesses are becoming more resilient in the areas they can influence, but many owners may still be delaying larger decisions around growth, succession, investment and technology. That gap matters - operational resilience can help businesses keep moving, but strategic resilience depends on making clear decisions before pressure builds.
With only 9% of global business leaders describing their risk management as very proactive, practical action is becoming a clear differentiator.
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BDO New Zealand's Risk Advisory service can help you to better understand your current risk profile, develop a proactive risk management strategy and prepare for any future risk events. We can provide you with a range of advice, including:
Learn more about our BDO Risk Advisory services here, or get in touch below to see how we can help. To discover what’s on the minds of New Zealand business leaders, view our latest BDO Business Performance Index.
