The three biggest threats to financial services in 2023
Geopolitical risk and trade tensions, inflation, and cyber risk are the most significant threats to the financial services ecosystem in the coming year, according to a new survey.
The annual Systemic Risk Barometer Survey by the Depository Trust & Clearing Corporation (DTCC) found almost 70% of respondents see geopolitical risks and trade tensions as a top threat, up from 49% last year.
Nearly three years since the start of the pandemic, concerns around COVID-19 as a top threat to the industry had dropped from 52% to just 8%, the survey noted, as vaccines rose and case numbers fell.
Some 61% of respondents identified inflation as another threat. Uncertainty around how long inflationary pressures would last and its impact on monetary policy and supply chains were key reasons behind their worries.
Amid growing sophistication of cyber threat actors and increased technology adoption in the industry, cyber risk was another concern for 47% of respondents, although it had dropped from 59% in the previous year..
Michael Leibrock, chief systemic risk officer at DTCC, highlighted how quickly the threat landscape evolves and the importance of keeping up with any potential shocks to market stability.
“Firms must continually review their risk management practices and procedures, conduct scenario planning exercises and ensure their operating structure is nimble to protect themselves and the broader industry,” he said.
AUTHOR
Rhea Nath
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The biggest threat to the Financial services Industry is giving ASIC & AFCA access to a Compensation Scheme of Last resort. We have always seen that when the battle should be fought, ASIC are nowhere to be seen yet once the battle is lost ASIC are there to bayonet the wounded. AFCA are already proving that they are just looking for an excuse to make the industry pay for consumers mistakes.