What the changes say
- KeyCorp faces heightened regulatory scrutiny and capital/liquidity costs as a Category IV bank with assets between $100 billion and $250 billion.
- Deposit retention risks have escalated due to growing competition from alternative savings vehicles like stablecoins and non-interest bearing account shifts.
- New operational risks focus on artificial intelligence adoption, climate-related physical weather events, and corporate responsibility polarization.
What changed since the prior 10-K
New
- New
rating agency requirements our binding constraint and increasing our capital and/or liquidity costs above what they would otherwise be and potentially reducing our profitability
As a Category IV bank with assets between $100 billion and $250 billion, KeyCorp faces potential increases in capital and liquidity costs from evolving regulations.
- New
A loss of customer deposits or an adverse change in deposit mix could increase our funding costs and/or impair our liquidity
KeyBank faces deposit outflows and higher funding costs as customers shift to alternative savings vehicles like stablecoins or higher-yielding accounts.
- New
Our operations and financial performance could be adversely affected by severe weather and natural disasters, both directly and as a result of impacts on our customers
Severe weather and natural disasters can disrupt KeyCorp operations and damage customer businesses, impairing their ability to repay loans.
- New
Our development and use of AI, including through third parties, exposes us to inherent risks that may adversely impact KeyCorp
The use of artificial intelligence exposes KeyCorp to uncertain legal environments, potential competitive disadvantages, and execution failures.
- New
in the financial services industry, or our failure to perform in any of these areas, could significantly weaken our competitive position, which could adversely affect our growth and profitability
Deficiencies in end-to-end operational execution or regulatory compliance can weaken KeyCorp's competitive position and growth.
- New
Negative coverage about Key published in traditional media or on social media websites, whether or not factually
Negative traditional or social media coverage, factual or not, can damage KeyCorp's reputation and hinder talent and customer retention.
- New
Differing views on corporate responsibility and sustainability could adversely affect our reputation and our business and results of operations
Differing stakeholder views on environmental, social, and governance matters expose KeyCorp to criticism, litigation, and customer loss.
- New
governance, establishing and monitoring model control standards and model risk metrics, and completeness and accuracy of the inventory of models
Inadequate models or control standard failures can trigger increased regulatory scrutiny and enforcement actions against KeyCorp.
Dropped
- Dropped
The most recent recession in the U.S., resulting from the impact of the COVID-19 pandemic, did not have significant lasting impact on collateral value. However, there are still risks to economic stability that could reverse recent stable trends in asset prices
- Dropped
The Federal Home Loan Bank (FHLB) system continues to be a source of funding. Changes in FHLB lending policy could adversely affect our liquidity and profitability
- Dropped
Our operations and financial performance could be adversely affected by severe weather and natural disasters exacerbated by climate change
- Dropped
Societal and governmental responses to climate change could adversely affect our business and performance, including indirectly through impacts on our customers
- Dropped
The increased use of remote work infrastructure has expanded potential attack vectors and resulted in increased operational risks
Risks to economic stability from COVID-19 pandemic aftermath, supply chain issues, and geopolitical wars.
- Dropped
process of eliminating banks as intermediaries, known as “disintermediation,” could result in the loss of fee income, as well as the loss of customer loans and deposits and related income generated from those products
- Dropped
Key is subject to corporate responsibility and sustainability efforts risks that could adversely affect our reputation and our business and results of operations
Reworded
- 85% rewritten
Should the fundamentals of the commercial real estate market deteriorate, our financial condition and results of operations could be adversely affected
Updated commercial real estate outlook from pandemic disruptions to a more normalized rate environment over the past 18 months.
- 79% rewritten
Declining asset prices could adversely affect us
Added context noting that most economic recessions are associated with financial market downturns and lower asset prices.
- 69% rewritten
Maintaining or increasing our market share depends upon our ability to adapt our products and services to evolving industry standards and consumer preferences, while maintaining competitive products and services
Minor trailing sentence truncation regarding deposit alternatives dropped from the end of the risk description.
- 46% rewritten
Some models we use employ methodologies based on artificial intelligence or machine learning. Compared to traditional models, these models may involve some additional complexities, such as the need for large datasets for training, the potential for algorithmic bias, and difficulty in interpreting model outputs
Updated AI and machine learning model risk description to highlight dataset needs, algorithmic bias, and interpretation difficulties.
Was: Some models we use employ methodologies based on artificial intelligence (AI) or machine learning (ML). These models bring some unique complexities from those of traditional models, such as the need for large datasets for training, the potential for algorithmic bias, and the difficulty in interpreting model decisions
- 43% rewritten
Capital and liquidity requirements imposed by banking regulators and the credit rating agencies may require banks and BHCs to maintain more and higher quality capital and more and higher quality liquid assets
Maintained core capital and liquidity requirements language with minor formatting updates.
Was: Capital and liquidity requirements imposed by banking regulations require banks and BHCs to maintain more and higher quality capital and more and higher quality liquid assets
- 41% rewritten
We operate in a highly competitive industry
Retained competitive landscape description including private credit funds and financial technology companies.
- 41% rewritten
We are subject to liquidity risk, which could negatively affect our funding levels
Refined liquidity risk definitions to explicitly mention adverse systemic or idiosyncratic conditions and higher borrowing costs.
- 40% rewritten
Our ability to attract and retain customers, clients, investors, and highly skilled management and employees is affected by our reputation. Damage to our reputation could also adversely impact our credit ratings and access to capital markets
Expanded reputational risk sources to specifically include the failure to safeguard client information.
- 36% rewritten
Federal agencies’ actions to ensure stability of the U.S. economy and financial system may have costly or disruptive effects on us
- 27% rewritten
We may not be able to attract and retain skilled people
- 25% rewritten
The soundness of other financial institutions could adversely affect us
- 24% rewritten
Geopolitical destabilization could adversely impact our loan portfolios
All 42 risk factors
Headings as the filing states them, in filing order.
Other
- 01We have concentrated credit exposure in commercial and industrial loans, commercial real estate loans, and commercial leases
- 02Should the fundamentals of the commercial real estate market deteriorate, our financial condition and results of operations could be adversely affected85% rewritten
- 03We are subject to the risk of defaults by our loan clients and counterparties
- 04Declining asset prices could adversely affect us79% rewritten
- 05Various factors may cause our allowance for loan and lease losses to increase or to be inadequate
- 06Geopolitical destabilization could adversely impact our loan portfolios24% rewritten
- 07We are subject to interest rate risk, which could adversely affect net interest income
- 08Our profitability depends upon economic conditions in the geographic regions where we have significant operations and in certain market segments in which we conduct significant business
- 09The soundness of other financial institutions could adversely affect us25% rewritten
- 10We are subject to liquidity risk, which could negatively affect our funding levels41% rewritten
- 11Capital and liquidity requirements imposed by banking regulators and the credit rating agencies may require banks and BHCs to maintain more and higher quality capital and more and higher quality liquid assets43% rewritten
- 12rating agency requirements our binding constraint and increasing our capital and/or liquidity costs above what they would otherwise be and potentially reducing our profitabilityNew
- 13Federal agencies’ actions to ensure stability of the U.S. economy and financial system may have costly or disruptive effects on us36% rewritten
- 14We rely on dividends by our subsidiaries for most of our funds
- 15Our credit ratings affect our liquidity position
- 16A loss of customer deposits or an adverse change in deposit mix could increase our funding costs and/or impair our liquidityNew
- 17We are subject to a variety of operational risks
- 18We and third parties on which we rely (including their downstream service providers) may experience a cyberattack, technology failure, information system or security breach or interruption
- 19We rely on third parties to perform significant operational services for us, and their failure to perform to our standards or other issues of concern with them could harm us
- 20Our framework for managing risks and mitigating losses may not be effective
- 21We are, and may in the future be, subject to claims, litigation, arbitration, investigations, and governmental proceedings, which could result in significant financial liability and/or reputational harm
- 22Our controls and procedures may fail or be circumvented, and our methods of reducing risk exposure may not be effective
- 23Our operations and financial performance could be adversely affected by severe weather and natural disasters, both directly and as a result of impacts on our customersNew
- 24Our development and use of AI, including through third parties, exposes us to inherent risks that may adversely impact KeyCorpNew
- 25We are subject to extensive government regulation, supervision, and tax legislation
- 26We are subject to complex and evolving laws and regulations regarding privacy and cybersecurity, which could limit our ability to pursue business initiatives, increase the cost of doing business and subject us to compliance risks and potential liability
- 27We may not realize the expected benefits of our strategic initiatives
- 28We operate in a highly competitive industry41% rewritten
- 29in the financial services industry, or our failure to perform in any of these areas, could significantly weaken our competitive position, which could adversely affect our growth and profitabilityNew
- 30Maintaining or increasing our market share depends upon our ability to adapt our products and services to evolving industry standards and consumer preferences, while maintaining competitive products and services69% rewritten
- 31We may not be able to attract and retain skilled people27% rewritten
- 32Acquisitions or strategic partnerships may disrupt our business and dilute shareholder value
- 33Scotiabank holds a significant equity interest in our business and may exercise influence over us, including through its ability to designate up to two directors to our Board of Directors
- 34Our ability to attract and retain customers, clients, investors, and highly skilled management and employees is affected by our reputation. Damage to our reputation could also adversely impact our credit ratings and access to capital markets40% rewritten
- 35Negative coverage about Key published in traditional media or on social media websites, whether or not factuallyNew
- 36Differing views on corporate responsibility and sustainability could adversely affect our reputation and our business and results of operationsNew
- 37We rely on quantitative models to manage certain accounting, risk management, capital planning, and treasury functions
- 38Some models we use employ methodologies based on artificial intelligence or machine learning. Compared to traditional models, these models may involve some additional complexities, such as the need for large datasets for training, the potential for algorithmic bias, and difficulty in interpreting model outputs46% rewritten
- 39governance, establishing and monitoring model control standards and model risk metrics, and completeness and accuracy of the inventory of modelsNew
- 40The preparation of our consolidated financial statements requires us to make subjective determinations and use estimates that may vary from actual results and materially impact our financial condition and results of operations
- 41Changes in accounting policies, standards, and interpretations could materially affect how we report our financial condition and results of operations
- 42Impairment of goodwill could require charges to earnings, which could result in a negative impact on our results of operations
Other Keycorp 10-Ks
- FY2024 10-K risk factors41 risks
KeyCorp faces concentrated credit exposure primarily in commercial and industrial loans, commercial real estate loans, and commercial leases, representing 69% of the portfolio. Profitability is heavily tied to net interest income and regional economic conditions across branches in Washington, Oregon, Ohio, and other states. Regulatory capital requirements, liquidity risks, and operational vulnerabilities from cyberattacks and third-party dependencies heavily shape risk factors.
Filed Feb 21, 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.