Cyprus business leaders warn against complacency as AI reshapes strategy

AI and geopolitical uncertainty force companies to rethink strategyCyprus business leaders have warned that geopolitical instability, rising borrowing costs and the rapid development of artificial intelligence (AI) are forcing companies to rethink their strategies, with investment in technology, workforce skills and resilience emerging as key priorities for 2027. Speaking at a chief executives’ panel discussion at the Limassol Economic Forum 2026, senior executives from banking, consulting, law and property said businesses must prepare for risks that cannot always be predicted using historical data, while ensuring they do not sacrifice long-term competitiveness in pursuit of immediate results. The discussion, titled “Leading Through Uncertainty: How CEOs Are Preparing for the World of 2027”, examined how geopolitical tensions, economic shifts, the energy transition and technological disruption are influencing corporate decision-making. The panel was moderated by Emilia Papadopoulos, a presenter and broadcast journalist, and featured Demetris Demetriou, chief risk officer at the Bank of Cyprus, Pieris Markou, chief executive of Deloitte Cyprus, Elias Neocleous, managing partner at Elias Neocleous & Co LLC, and Constantinos Savvides, chief executive of bbf:. Demetriou highlighted the increased cost of borrowing, linking it to higher government debt, instability and the need to fund defence spending, while pointing out that governments and businesses were competing for capital with the AI industry, which is seeking to raise trillions of dollars over the coming years. He questioned whether the promised technological advances would materialise on the scale anticipated, saying the outcome remained uncertain. If the promise of technological progress is fulfilled, economic growth should remain positive and interest rates should return to more normal levels, he said. Neocleous stressed that businesses are increasingly interconnected and share risks across borders, meaning companies must understand not only their own vulnerabilities but also those affecting their partners, clients and the wider international environment. He said his law firm faced substantial additional costs for cybersecurity insurance when seeking to provide services to international businesses, illustrating how security risks could directly affect commercial operations. Security, predictability and stability remained essential foundations for business, he said, but Cyprus also needed to continue investing in strong institutions and the rule of law. Markou argued that businesses across Europe, the Middle East and Africa (EMEA) needed to work together to make substantial investments in technology, warning that countries acting separately risked falling behind. Technology was expected to improve efficiency and reduce the need for additional staff, while giving companies access to capabilities that had previously been available mainly to larger or better-resourced players. The market had become more level as new competitors gained access to technological tools, he said, but businesses needed to approach adoption carefully, guard against cyber risks and invest in upskilling their employees. Rather than simply reducing staffing requirements, companies should help workers develop their abilities and spend more time on meaningful, higher-value tasks, he added. Savvides said the property market was not immune to geopolitical turbulence, although Cyprus had continued to benefit from strong domestic market conditions. He said the local housing market had almost doubled over the past five years, with activity standing €3 billion above its pre-Covid peak, reflecting a high level of business confidence. Lead generation remained strong and appeared to be growing further, he said, although the uncertain outlook meant companies could not afford to assume that the momentum would continue indefinitely. Businesses therefore needed to remain cautious, calculate their decisions carefully and use data to manage exposure and risk. Asked to identify the single biggest strategic risk facing his organisation, Demetriou replied, “I wish it was just one.” He pointed to the international race for AI supremacy, in which countries were competing to establish technological dominance, warning that unchecked development could create new dangers or allow malicious actors to exploit the technology. The challenge was to harness AI to promote innovation, safety and efficiency, he said, with the hope that society would emerge from the current period in a better position. Neocleous referred to an EY survey of chief executives, saying more than half of respondents identified geopolitics among their main concerns, alongside AI and technological disruption. However, he considered complacency and the failure to challenge established business models to be the greatest risks facing individual companies. Founders and chief executives needed to ask themselves how they would build a new company today if they had access to the tools currently available, he said. That required adopting the right technologies while investing in corporate culture and human capital, he added, warning that businesses would struggle to succeed if they neglected either. Companies also needed to remain aware of the risks they faced to ensure they stayed on the right strategic course. Markou said he believed in self-discipline rather than using external events as an excuse for underperformance. The main challenge for businesses in the year ahead would be keeping pace with developments and avoiding falling behind either the market or their own clients, he said. Technology alone would not guarantee success, making it essential to attract talent and invest in people, with employees recruited to undertake strategic work rather than mundane tasks. Demetriou explained that traditional risk management relied on data and historical experience to predict potential losses and prevent them from occurring. Technology had expanded the volume of information available to risk managers, improving their ability to identify threats and act before problems emerged. However, he said, “we live in a time where uncertainty is the new norm.” Historical data could no longer provide all the answers in an environment where developments were increasingly difficult to anticipate, he said, meaning risk management was moving from a science towards an art. Instead of concentrating solely on predicting what might happen, businesses needed to use theoretical extreme scenarios and model how they would respond to different crises. Demetriou cited the Covid-19 pandemic as an example of how organisations had worked together to respond to an unprecedented emergency, saying similar cooperation could be necessary again if another major crisis emerged. Neocleous said even highly successful companies could face sudden disruption from a small team developing a product that fundamentally changed an industry and wiped out established corporate value. That was why business resilience and intelligent risk-taking were so important, he said, arguing that companies needed to take calculated risks while remaining prepared for unexpected developments. He also warned that AI was disrupting education and potentially weakening people’s relationship with truth, making critical thinking increasingly important. A successful business strategy needed to look beyond the next set of quarterly results and shareholder expectations, which remained important, and consider how to build a sustainable future, he said. Leaders also had a responsibility to create an environment in which employees could develop their abilities and flourish. Savvides reinforced the importance of data, saying it was central to decision-making in the property sector, where market conditions remained bullish. Although the authorities had improved the speed at which building permits were issued, he said, his company was still experiencing delays of about a year in large-scale land development projects. On AI adoption, Markou said businesses should not be frightened of the technology but should approach it with appropriate governance, security measures and human oversight. Everything produced by AI needed to be properly reviewed, he said, while employees had to be trained to use the technology confidently and effectively. Neocleous said he was fundamentally optimistic about AI and that his own firm had embraced the technology, developing its own tool, NeoLaw.AI. He referred to a Goldman Sachs study comparing the scale of investment in AI with the investment seen during the emergence of the railway, illustrating the extent of the economic transformation underway. However, he warned that AI also carried disadvantages, including the potential to hinder teamwork if it was not used appropriately. Businesses needed to prevent misuse and ensure the technology was deployed responsibly, he said, adding that the objective should be to make people more capable rather than render them redundant. Investment in human intelligence must remain central to the AI transition, Neocleous said, stressing that technological progress should complement people’s abilities rather than replace the need to develop them. Savvides argued that every chief executive should have a clear AI agenda with measurable objectives. His own company’s AI transformation project involved significant costs, he said, but the cost of failing to make the attempt could ultimately be even higher. Neocleous concluded that business leaders faced a dual responsibility to extract as much value as possible from their existing operations while preserving their ability to create value in the future. Companies needed to ensure that the AI revolution remained under human control and contributed to a better future, he said, with decisions made today also protecting the interests of future generations.