The biggest risk to a financial services company’s public affairs strategy isn’t the regulatory fight directly in front of it. It’s the realignment coming sooner than most think, and it will be cataclysmic. Political coalitions organized around a single dominant figure are inherently unstable, and when that figure leaves the political landscape, the coalition rarely holds together as it did before.
The next two federal elections will create a forceful riptide in an already fragmented and adversarial regulatory environment. Expect the SEC and CFTC to keep swinging between enforcement pushes and deregulation as leadership turns over. The CFPB is in flux and highly dependent on which administration is in power. State-based regulatory policies are often deliberately at odds with those of other states, and a company can be required to do one thing in one state and be investigated for the same decision in another.
What does this mean for financial services over the next decade? A Democratic resurgence likely means a snapback toward tighter regulation and closer alignment with European-style frameworks, which will be especially hard on banking, lending, and AI. A Republican Party without Trump likely means a scramble among factions to hold the coalition together, potentially producing volatile, unfocused rulemaking. The outcome for financial services companies is inevitable: more regulatory complexity and nuance to manage, not less.
And that complexity is already visible. The rules of the road have shifted quickly and will continue to bounce back and forth depending on who is in power. The CFPB, SEC, CFTC, federal banking regulators, and Treasury each have their own priorities, and a change in direction at any one of them can have consequences well beyond its immediate jurisdiction. Add fifty states, their regulators and attorneys general, and a company can find itself navigating multiple approaches to the same product, practice, or risk at once.
None of this is hypothetical; we’ve watched it happen, and there is little reason to expect the underlying complexity to recede.
Most corporate public affairs functions aren’t built for this kind of uncertainty. They’re built to win the fight directly in front of them, such as a bill that could cost the company millions, a congressional hearing, or an agency inquiry. Adding to the difficulty are trade associations that lose utility by the year, paralyzed by a strategy of trying to please everyone, which ends up pleasing no one.
That is the fundamental mistake I see companies make with public affairs. They treat it as a function for winning political fights rather than managing political risk. Winning a fight is rewarding but can be fleeting. Managing political risk is continuous. It means understanding where pressure could come from, identifying the people who can actually change the outcome, building credibility before you need it, and recognizing when an issue that looks manageable today could become a significant business problem six months from now.
A modern public affairs function should be built with the company’s long-term risks and opportunities as its north star. It builds capability that holds up no matter the fight ahead or which party is setting the agenda, and that comes down to three things.
1. Precision over reach
I’ve seen outreach plans built around billboards, mass transit ads, and broad digital buys. But,the audience that actually shapes an outcome, the regulators and policymakers with real authority, numbers fifty or fewer. The message has to reach those fifty people and the staff, press, and stakeholders who inform them, not the widest possible audience. The names on that list shift with the political winds, and strategic agility and deep institutional foresight are more than just advantages; they are fundamental requirements for navigating a shifting landscape.
That kind of precision requires knowing not only who matters now, but who is likely to matter next. The advantage of being in Washington is seeing those shifts before they become obvious elsewhere, often through developments that seem unremarkable on their own: a staffer starts asking different questions, an issue that barely registered in one hearing appears again in the next, an advocacy group changes its language, a state attorney general begins examining something federal regulators have deprioritized, or a trade association suddenly can’t reach consensus among its members. None of those developments necessarily means much in isolation, but taken together, they can show where the ground is moving well before it becomes obvious to everyone else.
2. One strategy, not three
Most large financial services companies already have corporate communications, public affairs, and lobbying capabilities, whether in-house, through outside firms, or a combination of both. The problem is that they are too often treated as three separate disciplines: communications manages the press and corporate reputation, public affairs builds the broader strategy around political and regulatory issues, and lobbyists work the Hill, agencies, and state capitals. They may coordinate, but coordination isn’t the same thing as operating from a single strategy.
The distinction matters because the audiences these functions try to influence don’t experience the company in isolation. A policymaker’s understanding of an issue is shaped not only by what they hear directly from a lobbyist but also by the coverage they read, the arguments made by advocates and competitors, the company’s reputation, and what their own constituents are hearing. The same dynamic runs through investors, customers, and employees, particularly when an issue moves from a regulatory concern into a political or reputational one.
Corporate communications, public affairs, and lobbying have different roles, but they should work from the same strategy, the same understanding of the risk, and the same fundamental argument.
Particularly in financial services, there is little distinction between policy, reputational, and business problems.
3. Building the plane while it takes off isn’t a strategy
The worst time to build a public affairs strategy is when you need one. By the time a company faces a congressional inquiry, an aggressive regulator, organized opposition to a transaction, or a policy proposal that threatens the business, its options are minimal. The people who matter are paying attention, positions are galvanizing, and the company is trying to establish credibility at precisely the moment it needs to spend it.
A good public affairs strategy should anticipate issues that can materially affect the business long before they become urgent. When an issue does emerge, leadership knows what matters, the relevant relationships exist, the argument has been considered, and corporate communications, public affairs, and lobbying know what each is supposed to do.
Getting ahead of an issue doesn’t mean responding earlier. It means being prepared enough that when the issue arrives, you’re executing a strategy rather than inventing one.
Why Vested
Vested has always had financial services at its core. Adding public affairs and special situations puts political and regulatory strategy at the heart of that model as well.
Financial services companies can hire agencies that know their industry but have little meaningful public affairs capability, or public affairs firms that understand Washington but lack deep financial services expertise. Often, they end up spreading the work across several firms and advisers, leaving the company to connect the pieces itself.
That fragmentation also makes it easy to undervalue public affairs, even though it can be a remarkably high-return investment. The cost of getting it wrong is disproportionate to the cost of getting it right. Companies routinely have millions of dollars, major transactions, access to markets, and sometimes entire lines of business exposed to decisions made in Washington or state capitals. Spending a fraction of that to understand the risk, build the right strategy, and protect the business shouldn’t be viewed as an ancillary communications expense.
We’re not building another Washington public affairs firm. We’re making public affairs part of how financial services companies think about communications, reputation, transactions, and business strategy in the first place.
