Cyber risk seen as top threat to financial markets says DTCC
07 December 2021 US
Image: kras99/stock.adobe.com
A Depository Trust and Clearing Corporation (DTCC) survey reveals cyber risk to be the top threat to face the global financial markets in 2022, with the COVID-19 pandemic and geopolitical tensions rounding out the top three threats overall.
Respondents of the survey highlighted the increased sophistication of cyber attacks as well as the industry’s growing digital footprint as key drivers of this concern, which 24 per cent of participants listed as a top overall threat to the industry.
While the number of respondents who identified the COVID-19 pandemic as a top five concern dropped 15 percentage points over last year’s survey, it still ranked second among the top five risks to the industry at 52 per cent.
Many believed that the pandemic will continue to impact the industry, disrupting supply chains and driving market volatility. Some respondents also expressed concerns over maintaining effective cybersecurity practices in a remote work environment.
49 per cent of the survey respondents identified geopolitical risks and trade tensions as a significant risk, with many citing concerns over the potential for growing state-sponsored cyber attacks.
DTCC also revealed two risks which saw significant increases in this year’s survey, with climate change concern jumping 20 per cent from 2020 and inflation worries rising by 7 per cent.
Respondents said climate change posed increased “physical risks” that can take their toll through higher costs, business disruption, and loss of lives.
On the subject of inflation, 77 per cent of respondents said they expect inflation to be equal to or higher than current levels a year from now, with some citing the belief that inflation does not appear to be transitory and that it may slow down the economy as it weighs on purchasing power.
Commenting on the survey results, Michael Leibrock, chief systemic risk officer at DTCC, says: “The survey shows that cyber risk is pervasive; it’s striking to see its impact extend across multiple top threat areas. When describing the pandemic, risk managers stated that it left the industry more vulnerable to cyber crime. As a result of this and other drivers, it is critically important that firms continue to bolster their response plans, practice simulations, and frequently review their cybersecurity and risk management practices to assess whether they’re staying on top of this evolving threat.”
Respondents of the survey highlighted the increased sophistication of cyber attacks as well as the industry’s growing digital footprint as key drivers of this concern, which 24 per cent of participants listed as a top overall threat to the industry.
While the number of respondents who identified the COVID-19 pandemic as a top five concern dropped 15 percentage points over last year’s survey, it still ranked second among the top five risks to the industry at 52 per cent.
Many believed that the pandemic will continue to impact the industry, disrupting supply chains and driving market volatility. Some respondents also expressed concerns over maintaining effective cybersecurity practices in a remote work environment.
49 per cent of the survey respondents identified geopolitical risks and trade tensions as a significant risk, with many citing concerns over the potential for growing state-sponsored cyber attacks.
DTCC also revealed two risks which saw significant increases in this year’s survey, with climate change concern jumping 20 per cent from 2020 and inflation worries rising by 7 per cent.
Respondents said climate change posed increased “physical risks” that can take their toll through higher costs, business disruption, and loss of lives.
On the subject of inflation, 77 per cent of respondents said they expect inflation to be equal to or higher than current levels a year from now, with some citing the belief that inflation does not appear to be transitory and that it may slow down the economy as it weighs on purchasing power.
Commenting on the survey results, Michael Leibrock, chief systemic risk officer at DTCC, says: “The survey shows that cyber risk is pervasive; it’s striking to see its impact extend across multiple top threat areas. When describing the pandemic, risk managers stated that it left the industry more vulnerable to cyber crime. As a result of this and other drivers, it is critically important that firms continue to bolster their response plans, practice simulations, and frequently review their cybersecurity and risk management practices to assess whether they’re staying on top of this evolving threat.”
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