A new survey conducted by the Depository Trust & Clearing Corporation (DTCC) has found that cyber risks top the list of financial service concerns, but that geopolitical threats such as Brexit and the U.S. presidential nominee, Donald Trump, are not far behind.
The survey, Systemic Risk Barometer, by the DTCC found that cyber risks remained the number one overall risk with 22 percent stating that it is the single biggest threat to financial services while 56 percent of respondents ranking it within the top five.
While cyber risks remain the number one concern, the survey found that the top five risks have moved toward geopolitical concerns.
The remaining top four concerns included the U.S. Presidential Election outcome at 50 percent; geopolitical risk at 38 percent with a slight decrease from 39 percent six months ago; the impact of new regulations at 35 percent, which was less than the 38 percent reported six months ago; and Britain’s exit from the European Union (EU) at 33 percent, up from 24 percent in the same timeframe.
However, even though banks are doing more to implement security measures to prevent them from becoming targets of cyberattacks, respondents of the survey believe that the evolving nature of cyberattacks and their more sophisticated nature puts the financial service industry at greater risk.
Michael Leibrock, Managing Director and Chief Systemic Risk Officer at DTCC, said:
Several respondents rightfully point to the growing incidence and sophistication of state-sponsored cyberattacks as a particularly worrisome trend that is emerging at the intersection of both areas of risk.
Concerns Over Global Economic Slowdown Decrease
Macroeconomic concerns such as the risk of economic slowdowns in the U.S., Asia, and Europe have decreased over the past six months.
Compared to the Q1 2016 results which saw 51, 37 and 24 percent of respondents concerned about an Asia, U.S., and European economic slowdown, respectively, those figures decreased to 24, 22, and 18 percent respectively with results returning to levels reported last year.
The results from DTCC’s most recent survey have shown that the financial system, broadly speaking, continues to be increasingly interconnected, with new risks emerging and affecting the overall level and nature of systemic risk.
He added that while it is difficult to determine when and how these new emerging risks will produce an impact on the financial industry, it’s vital that firms continue to introduce tools and put measures into place that will help to detect threats as quickly as possible for the financial service industry.
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