What the changes say
- New risks emphasize sophisticated fraud, including generative-AI social engineering and account takeovers.
- Privacy, cybersecurity, data-transfer and AI regulations may raise costs and restrict data use and automated decision-making.
- Reworded risks sharpen exposure to interest-rate effects, technology investments, model data quality and expanded payment products.
What changed since the prior 10-K
New
- NewOperational and Compliance Risks
Fraudulent activity associated with our products and services could have a material adverse effect on our business and results of operations
Generative AI, social engineering, account takeovers and other sophisticated fraud could cause losses and harm American Express’s operations.
- NewOperational and Compliance Risks
Regulation in the areas of privacy, data protection, data management, resiliency, data transfer, third party oversight, account access, AI & ML and information security and cybersecurity could increase our costs and affect or limit our business opportunities and how we collect, use and/or retain personal information
Fragmented privacy, cybersecurity, data-transfer and AI regulations could increase compliance costs and restrict personal-information use and automated decision-making.
Reworded
- 86% rewrittenCredit, Market and Liquidity Risks
Interest rate changes could materially adversely affect our earnings
Net interest income increased from $15.5 billion to $17.4 billion, while the risk now also covers prolonged rate periods, spending, economic activity and deposit demand.
- 80% rewrittenOperational and Compliance Risks
Our success is dependent on maintaining a culture that adheres to our values and upon our executive officers and other key personnel, and misconduct by or loss of personnel could materially adversely affect our business
The risk now specifically covers harm to customers and colleagues, Blue Box Values, controls and risk management, but no longer mentions unexpected key-person loss.
Was: Our success is dependent on maintaining a culture of integrity and respect and upon our executive officers and other key personnel, and misconduct by or loss of personnel could materially adversely affect our business
- 66% rewrittenOperational and Compliance Risks
Our use of models, including the data that underlie them, to manage risk and make business decisions may not be effective
The risk adds forecasting liquidity and funding needs and formula and algorithm integrity, while dropping the historical-data example and credit-profile limitation.
Was: Our use of models to manage risk and make business decisions may not be effective
- 61% rewrittenStrategic and Reputational Risks
We may not be successful in our efforts to promote card usage or attract new customers, including through marketing and promotion, merchant acceptance and Card Member rewards and services, or to effectively control the costs of such investments, all of which may materially impact our profitability
American Express added travel, dining, checking, debit and expense-management products and intense payments competition, while dropping the short-term-incentive attrition example.
Was: We may not be successful in our efforts to promote card usage or attract new Card Members, including through marketing and promotion, merchant acceptance and Card Member rewards and services, or to effectively control the costs of such investments, all of which may materially impact our profitability
- 53% rewrittenStrategic and Reputational Risks
Our business is subject to the effects of geopolitical conditions, weather, natural disasters and other catastrophic events
The geopolitical example now spells out “United States” instead of “U.S.”, with no substantive change in the threats described.
- 50% rewrittenCredit, Market and Liquidity Risks
We are subject to capital adequacy and liquidity rules, and if we fail to meet our capital and liquidity requirements, our business would be materially adversely affected
The risk now emphasizes extensive, complex current and future requirements rather than specifically highlighting the 2023 proposed capital and long-term-debt rules.
Was: We are subject to capital adequacy and liquidity rules, and if we fail to meet these rules, our business would be materially adversely affected
- 48% rewrittenOperational and Compliance Risks
Tax legislative initiatives or assessments could adversely affect our results of operations and financial condition
The tax risk is substantively unchanged; the referenced financial-statement note changed from Note 20 to Note 19.
- 46% rewrittenStrategic and Reputational Risks
If we are not able to successfully invest in, and compete with respect to, technological developments and new products and services across all our businesses, our revenue and profitability could be materially adversely affected
The technology risk adds agentic commerce, digital currencies and blockchain technologies to the investment areas requiring governance and controls.
- 46% rewrittenOperational and Compliance Risks
We may not be able to effectively manage the operational and compliance risks to which we are exposed
- 44% rewrittenCredit, Market and Liquidity Risks
Adverse market conditions may significantly affect our access to, and cost of, capital and ability to meet liquidity needs
- 38% rewrittenStrategic and Reputational Risks
Surcharging, steering or other differential acceptance practices by merchants could materially adversely affect our business and results of operations
- 38% rewrittenOperational and Compliance Risks
Our business is subject to evolving and comprehensive government regulation and supervision, which could materially adversely affect our results of operations and financial condition
- 38% rewrittenOperational and Compliance Risks
If we are not able to protect our intellectual property rights, or successfully defend against any infringement or misappropriation assertions brought against us, our revenue and profitability could be negatively affected
Was: If we are not able to protect our intellectual property, or successfully defend against any infringement or misappropriation assertions brought against us, our revenue and profitability could be negatively affected
- 35% rewrittenStrategic and Reputational Risks
We may face additional compliance and regulatory risks to the extent that we expand into new business areas, and we may need to dedicate more expense, time and resources to comply with regulatory requirements than our competitors, particularly those that are not regulated financial institutions
- 33% rewrittenOperational and Compliance Risks
Litigation and regulatory actions could subject us to significant fines, penalties, judgments and/or requirements resulting in significantly increased expenses, damage to our reputation and/or a material adverse effect on our business and results of operations
- 32% rewrittenOperational and Compliance Risks
We rely on third-party providers for acquiring and servicing customers, technology, platforms and other services integral to the operations of our businesses. These third parties may act in ways or experience issues that could materially harm our business
Was: We rely on third-party providers for acquiring and servicing customers, technology, platforms and other services integral to the operations of our businesses. These third parties may act in ways that could materially harm our business
- 31% rewrittenStrategic and Reputational Risks
Our brand and reputation are key assets of our Company, and our business may be materially affected by how we are perceived in the marketplace
- 31% rewrittenStrategic and Reputational Risks
Our operating results may materially suffer because of substantial and increasingly intense competition worldwide in the payments industry
- 29% rewrittenCredit, Market and Liquidity Risks
We are exposed to credit risk and trends that affect Card Member spending and the ability of customers and partners to pay us, which could have a material adverse effect on our results of operations and financial condition
- 26% rewrittenStrategic and Reputational Risks
We face intense competition for partner relationships, which could result in a loss or renegotiation of these arrangements that could have a material adverse impact on our business and results of operations
- 25% rewrittenCredit, Market and Liquidity Risks
Any reduction in our credit ratings could increase the cost of our funding from, and restrict our access to, the capital markets and have a material adverse effect on our results of operations and financial condition
- 25% rewrittenCredit, Market and Liquidity Risks
Our ability to declare or pay dividends on, or to purchase, redeem or otherwise acquire, shares of our common stock will be prohibited, subject to certain exceptions, in the event that we do not declare and pay in full dividends for the last preceding dividend period of our preferred stock
- 23% rewrittenStrategic and Reputational Risks
Macroeconomic conditions are a major driver of our results of operations and changes in the business and economic environment may materially adversely affect our business
Was: Business and economic conditions are a major driver of our results of operations and difficult conditions in the business and economic environment may materially adversely affect our business
- 21% rewrittenOperational and Compliance Risks
A major information or cybersecurity incident could lead to reputational damage to our brand and material legal, regulatory and financial exposure, and could reduce the use and acceptance of our products and services
Was: A major information or cybersecurity incident or an increase in fraudulent activity could lead to reputational damage to our brand and material legal, regulatory and financial exposure, and could reduce the use and acceptance of our products and services
All 34 risk factors
Headings as the filing states them, in filing order.
Strategic and Reputational Risks
- 01Macroeconomic conditions are a major driver of our results of operations and changes in the business and economic environment may materially adversely affect our business23% rewritten
- 02Our business is subject to the effects of geopolitical conditions, weather, natural disasters and other catastrophic events53% rewritten
- 03Our operating results may materially suffer because of substantial and increasingly intense competition worldwide in the payments industry31% rewritten
- 04We may face additional compliance and regulatory risks to the extent that we expand into new business areas, and we may need to dedicate more expense, time and resources to comply with regulatory requirements than our competitors, particularly those that are not regulated financial institutions35% rewritten
- 05We face intense competition for partner relationships, which could result in a loss or renegotiation of these arrangements that could have a material adverse impact on our business and results of operations26% rewritten
- 06We face continued intense competitive pressure that may materially impact the prices we charge for accepting our cards for payment, as well as the risk of losing merchant relationships, which could have a material adverse impact on our business and results of operations
- 07Surcharging, steering or other differential acceptance practices by merchants could materially adversely affect our business and results of operations38% rewritten
- 08We may not be successful in our efforts to promote card usage or attract new customers, including through marketing and promotion, merchant acceptance and Card Member rewards and services, or to effectively control the costs of such investments, all of which may materially impact our profitability61% rewritten
- 09Our brand and reputation are key assets of our Company, and our business may be materially affected by how we are perceived in the marketplace31% rewritten
- 10If we are not able to successfully invest in, and compete with respect to, technological developments and new products and services across all our businesses, our revenue and profitability could be materially adversely affected46% rewritten
- 11We may not be successful in realizing the benefits associated with our acquisitions, strategic alliances, joint ventures and investment activity, and our business and reputation could be materially adversely affected
Operational and Compliance Risks
- 12We may not be able to effectively manage the operational and compliance risks to which we are exposed46% rewritten
- 13A major information or cybersecurity incident could lead to reputational damage to our brand and material legal, regulatory and financial exposure, and could reduce the use and acceptance of our products and services21% rewritten
- 14The uninterrupted operation of our information systems is critical to our success and a significant disruption could have a material adverse effect on our business and results of operations
- 15Fraudulent activity associated with our products and services could have a material adverse effect on our business and results of operationsNew
- 16Our business is subject to evolving and comprehensive government regulation and supervision, which could materially adversely affect our results of operations and financial condition38% rewritten
- 17Litigation and regulatory actions could subject us to significant fines, penalties, judgments and/or requirements resulting in significantly increased expenses, damage to our reputation and/or a material adverse effect on our business and results of operations33% rewritten
- 18We rely on third-party providers for acquiring and servicing customers, technology, platforms and other services integral to the operations of our businesses. These third parties may act in ways or experience issues that could materially harm our business32% rewritten
- 19Our use of models, including the data that underlie them, to manage risk and make business decisions may not be effective66% rewritten
- 20Our success is dependent on maintaining a culture that adheres to our values and upon our executive officers and other key personnel, and misconduct by or loss of personnel could materially adversely affect our business80% rewritten
- 21Regulation in the areas of privacy, data protection, data management, resiliency, data transfer, third party oversight, account access, AI & ML and information security and cybersecurity could increase our costs and affect or limit our business opportunities and how we collect, use and/or retain personal informationNew
- 22If we are not able to protect our intellectual property rights, or successfully defend against any infringement or misappropriation assertions brought against us, our revenue and profitability could be negatively affected38% rewritten
- 23Tax legislative initiatives or assessments could adversely affect our results of operations and financial condition48% rewritten
- 24Our operations, business, customers and partners could be adversely affected by climate-related risks
Credit, Market and Liquidity Risks
- 25We are exposed to credit risk and trends that affect Card Member spending and the ability of customers and partners to pay us, which could have a material adverse effect on our results of operations and financial condition29% rewritten
- 26Interest rate changes could materially adversely affect our earnings86% rewritten
- 27We are subject to capital adequacy and liquidity rules, and if we fail to meet our capital and liquidity requirements, our business would be materially adversely affected50% rewritten
- 28We are subject to restrictions that limit our ability to pay dividends and repurchase our capital stock. Our subsidiaries are also subject to restrictions that limit their ability to pay dividends to us, which may adversely affect our liquidity
- 29Our ability to declare or pay dividends on, or to purchase, redeem or otherwise acquire, shares of our common stock will be prohibited, subject to certain exceptions, in the event that we do not declare and pay in full dividends for the last preceding dividend period of our preferred stock25% rewritten
- 30Adverse market conditions may significantly affect our access to, and cost of, capital and ability to meet liquidity needs44% rewritten
- 31Any reduction in our credit ratings could increase the cost of our funding from, and restrict our access to, the capital markets and have a material adverse effect on our results of operations and financial condition25% rewritten
- 32Adverse currency fluctuations and foreign exchange controls could decrease earnings we receive from our international operations
- 33An inability to attract or maintain deposits could materially adversely affect our liquidity position and our ability to fund our business
- 34The value of our investments may be adversely impacted by economic, political or market conditions
Other American Express 10-Ks
- FY2024 10-K risk factors34 risks
Card spending, lending and fee growth depend on consumer and business activity, credit performance, and attracting and retaining Card Members.
Filed Feb 07, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.