Cyber attacks and Brexit among concerns for 2018, according to DTCC survey
12 December 2017 New York
Image: Shutterstock
Cyber risk remains the number one threat to global financial stability in 2018, according to a new survey published by the Depository Trust & Clearing Corporation (DTCC).
Overall, 36 percent of survey respondents named cyber risk as the main threat to the economy in 2018, while more than two thirds of respondents (79 percent) ranking cyber risk in the top five, an increase of 7 percentage points compared to DTCC’s last survey in Q1 2017.
Commenting on the increase risk of cyber attacks, Stephen Scharf, DTCC’s managing director and chief security officer, said: “We’ve learned that no companies or sectors are immune to the threat of cyber attacks, as firms and leaders are continuing to accept the inevitability that they will be forced to address and respond to a cyber attack.”
“It is becoming increasingly imperative not just to safeguard systems and infrastructure—but for companies to prepare response plans and maintain crisis management playbooks to respond to cyber attacks.”
Geopolitical risks ranked second in the survey, while the impact of new regulations came in third place.
Geopolitical risks saw the most significant increase of any risk category from the prior Q1 survey, with 69 percent of respondents viewing it as a top-five risk, compared to 52 percent in the last survey.
Brexit and the US Federal Reserve Monetary Policy followed in fourth and fifth place, respectfully.
Mark Wetjen, DTCC managing director and head of global public policy, said: “As geopolitical tensions continue to simmer and the consequences of any missteps or aggression exacerbate—there is the possibility of broad spikes, fluctuations and/or dislocations to ripple through markets.”
A total of 45 percent of those asked saw new regulations as a key risk to the broader economy in Q3 2017, compared to 40 percent in Q1.
Brexit negotiations and tensions in Asia also influenced the increase in fears about destabilising of the global economy, according to DTCC.
A total of 38 percent said they were worried about Britain’s exit from the EU, a small increase of 4 percentage points compared to Q1.
Andrew Douglas, CEO of DTCC’s derivatives repository and managing director of government relations for EMEA and Asia, said: “As Brexit negotiations move forward with limited concrete progress leading to continued uncertainty, financial institutions are increasingly looking to enact their own contingency plans to ensure that their business models can continue to operate under the worst case scenario.”
Fintech risk, which was included in this survey for the first time, was acknowledged as significant by 15 percent of respondents.
DTCC said: “While fintech is generally recognised as holding great promise, these results demonstrate a growing awareness of potential emerging risks, highlighting the need to evaluate both risks and rewards associated with fintech initiatives.”
The DTCC Systemic Risk Barometer Survey, which was first conducted in 2013, monitors existing and emerging risks that may impact the safety, resilience and stability of the global financial system.
Overall, 36 percent of survey respondents named cyber risk as the main threat to the economy in 2018, while more than two thirds of respondents (79 percent) ranking cyber risk in the top five, an increase of 7 percentage points compared to DTCC’s last survey in Q1 2017.
Commenting on the increase risk of cyber attacks, Stephen Scharf, DTCC’s managing director and chief security officer, said: “We’ve learned that no companies or sectors are immune to the threat of cyber attacks, as firms and leaders are continuing to accept the inevitability that they will be forced to address and respond to a cyber attack.”
“It is becoming increasingly imperative not just to safeguard systems and infrastructure—but for companies to prepare response plans and maintain crisis management playbooks to respond to cyber attacks.”
Geopolitical risks ranked second in the survey, while the impact of new regulations came in third place.
Geopolitical risks saw the most significant increase of any risk category from the prior Q1 survey, with 69 percent of respondents viewing it as a top-five risk, compared to 52 percent in the last survey.
Brexit and the US Federal Reserve Monetary Policy followed in fourth and fifth place, respectfully.
Mark Wetjen, DTCC managing director and head of global public policy, said: “As geopolitical tensions continue to simmer and the consequences of any missteps or aggression exacerbate—there is the possibility of broad spikes, fluctuations and/or dislocations to ripple through markets.”
A total of 45 percent of those asked saw new regulations as a key risk to the broader economy in Q3 2017, compared to 40 percent in Q1.
Brexit negotiations and tensions in Asia also influenced the increase in fears about destabilising of the global economy, according to DTCC.
A total of 38 percent said they were worried about Britain’s exit from the EU, a small increase of 4 percentage points compared to Q1.
Andrew Douglas, CEO of DTCC’s derivatives repository and managing director of government relations for EMEA and Asia, said: “As Brexit negotiations move forward with limited concrete progress leading to continued uncertainty, financial institutions are increasingly looking to enact their own contingency plans to ensure that their business models can continue to operate under the worst case scenario.”
Fintech risk, which was included in this survey for the first time, was acknowledged as significant by 15 percent of respondents.
DTCC said: “While fintech is generally recognised as holding great promise, these results demonstrate a growing awareness of potential emerging risks, highlighting the need to evaluate both risks and rewards associated with fintech initiatives.”
The DTCC Systemic Risk Barometer Survey, which was first conducted in 2013, monitors existing and emerging risks that may impact the safety, resilience and stability of the global financial system.
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