The Depository Trust & Clearing Corporation (DTCC) issued its annual Systemic Risk Barometer Survey results, which identified geopolitical risks and trade tensions, inflation and cyber risk as the most significant threats to the financial services ecosystem in the coming year.
- 68% of survey respondents cited geopolitical risks and trade tensions as a top threat, up from 49% last year, as tensions around the world continue to impact global markets
- 61% of survey respondents identified inflation as a top threat, up from 34% last year, which represents the most significant jump across all risks. Respondents cited unknowns around how long inflationary pressures may last, as well as the impact of monetary policy and supply chains as key reasons behind their concerns.
- 47% of respondents ranked cyber risk as a top risk, a decrease from 59% last year, driven by the growing sophistication of threat actors, the proliferation of new technology adoption and an increasingly interconnected marketplace.
- Funding liquidity risk was not one of the top risk concerns identified by respondents, but did rise to 12% from 9% year-on-year.
- Nearly three years since the start of the pandemic, most respondents no longer consider COVID-19 a top threat to the industry, as case numbers decline, and vaccine availability continues to increase.
“The dramatic increase in concerns around geopolitical risks and trade tensions, inflation and US economic slowdown reinforce how quickly the threat landscape evolves and the importance of regularly monitoring the external environment to gain intelligence into potential shocks to market stability,” said Michael Leibrock, chief systemic risk officer at DTCC, in a statement. “As a result, 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.”