The Depository Trust and Clearing Corporation (DTCC) has published the results of its annual Systemic Risk Barometer Survey. The top three threats to the financial services industry in 2025, as predicted by survey respondents are: geopolitical risk; cyber risk; and risks resulting from US political uncertainty and the US presidential election outcome.
Geopolitical risk comes ahead as the top concern. 84 per cent of respondents cited their belief that “a significant geopolitical event could develop or advance and substantially impact financial markets”. Geopolitical risk has made it into the top five every year since the survey was first launched in 2013; this is the third consecutive year it has been named the top risk.
Coming in second, cyber risk garnered 69 per cent of the votes, increasing significantly from 50 per cent last year. This made it the top advancer across all risk categories this year.
In third place is US political uncertainty and the US presidential election outcome, perhaps reflecting the timing of the survey, which was before the US election. Respondents expressed worry that market volatilty might result from political and economic uncertainty.
Fintech, not fine
In fourth place with 32 per cent of the votes is inflation risk, while US economic slowdown follows closely in fifth place with 31 per cent.
Fintech risk is behind cyber risk as the second highest advancer, jumping from getting 15 per cent of the votes last year to 25 per cent this year. 69 per cent of the respondents cited emerging technologies such as artificial intelligence (AI), machine learning, and robotic processing automation as being the biggest threats in the coming year as they get increasingly adopted into business procedures.
Timothy Cuddihy, managing director and group chief risk officer at DTCC says, “Firms should regularly update their risk management strategies by conducting scenario planning, reviewing key dependencies, assessing recovery planning, and training employees to understand the risk impacts of these threats.”
