State Street (STT) risk factors, 2025 10-K

Strategic Risks

1. 01We are subject to intense competition in all aspects of our business, which could negatively affect our ability to maintain or increase our profitability
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3. 03Development and completion of new products and services, including State Street Alpha and those related to wealth servicing, alternative investment management or digital assets or incorporating artificial intelligence, may impose costs on us, involve dependencies on third parties and may expose us to increased risks
4. 04Acquisitions, strategic alliances, joint ventures and divestitures pose risks for our business
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6. 06or reduced opportunities due to the effects of non-competition or other restrictive covenants
7. 07result in risks to our business and other uncertainties
8. 08foreclose execution on material opportunities or initiatives, create regulatory risks and limit divestment opportunities
9. 09Competition for qualified members of our workforce is intense, and we may not be able to attract and retain the personnel we need to support our business

Financial Market Risks

1. 10Political, geopolitical and economic conditions and developments could adversely affect us, particularly if we face increased uncertainty and unpredictability in managing our businesses
2. 11operations, including the degree of any offset between increases or decreases to both revenue and expenses, will depend upon the nature and scope of our operations and activities in the relevant jurisdictions during the relevant periods, which may vary from period to period
3. 12We have significant global operations, and clients, that can be adversely impacted by disruptions in key economies, including local, regional and geopolitical developments affecting those economies
4. 13Given the scope of our global operations, economic or market uncertainty, volatility, illiquidity or disruption resulting from these and related factors could have a material adverse impact on our consolidated results of operations or financial condition, with a greater relative impact as compared to our peers
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7. 16Our business activities expose us to interest rate risk
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9. 18risks, either resulting from our role as principal or because of commitments we make in our capacity as agent for some of our clients
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11. 20implementation, change management and operational errors, any of which could be material in light of the magnitude and volume of our settlement-related activities and obligations. These risks will also be relevant in other jurisdictions that may similarly change their settlement cycles
12. 21lending and repurchase agreements, we, rather than our client, are exposed to the risks associated with collateral value
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14. 23Fee revenue represents a significant majority of our consolidated revenue and is subject to decline, among other things, in the event of a reduction in, or changes to, the level or type of investment activity by our clients
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16. 25If we are unable to effectively manage our capital and liquidity, including by continuously attracting deposits and other short-term funding, our consolidated financial condition, including our regulatory capital ratios, our consolidated results of operations and our business prospects, could be adversely affected
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18. 27In addition, our advanced systems are subject to update and periodic revalidation in response to
19. 28We may need to raise additional capital or debt in order to maintain our credit ratings, in response to regulatory changes, including capital rules, or for other purposes, including financing acquisitions and joint ventures and optimizing capital management
20. 29Any downgrades in our credit ratings, or an actual or perceived reduction in our financial strength, could adversely affect our borrowing costs, capital costs and liquidity position and cause reputational harm
21. 30The risk that we may be perceived as less creditworthy than other market participants is higher
22. 31Compliance and Regulatory Risks
23. 32Basel III and Dodd-Frank Act
24. 33Banking regulators could change the Basel III rule or their interpretations as they apply to us, including changes to these standards or interpretations made in regulations implementing provisions of the Dodd-Frank Act, which could adversely affect us and our ability to comply with the Basel III rule
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26. 35Along with the Basel III rule, banking regulators also introduced additional requirements, such as the SLR, LCR and NSFR, each of which presents compliance risks
27. 36Supervisory Stress Testing and Capital Planning
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29. 38For additional information about the above matters, refer to “Regulatory Capital Adequacy and Liquidity Standards” under “Supervision and Regulation” in Business and “Capital” under “Financial Condition” in our Management’s Discussion and Analysis in this Form 10-K
30. 39Global and Non-U.S. Regulatory Requirements
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32. 41Consequences of Regulatory Environment and Compliance Risks
33. 42The evolving regulatory environment, including changes to existing regulations and the introduction of new regulations, may also contribute to decisions we may make to suspend, reduce or withdraw from existing businesses, activities, markets or initiatives
34. 43Our businesses may be adversely affected by government enforcement and litigation
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37. 46Our businesses may be adversely affected by increased and conflicting political and regulatory scrutiny of asset management, stewardship and corporate sustainability or ESG practices in the jurisdictions in which we operate
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39. 48Any theft, loss, damage to or other misappropriation or inadvertent disclosure of, or inappropriate access to, the confidential information we possess could have an adverse impact on our business and could subject us to regulatory actions, litigation and other adverse effects
40. 49Changes in accounting standards may adversely affect our consolidated financial statements
41. 50Changes in tax laws, rules or regulations, challenges to our tax positions with respect to historical transactions, and changes in the composition of our pre-tax earnings may increase our effective tax rate and thus adversely affect our consolidated financial statements
42. 51We could face liabilities for withholding and other non-income taxes as a result of tax authority examinations
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44. 53Our businesses may be negatively affected by adverse publicity or other reputational harm

Operational, Cyber and Technology Risks

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2. 55regulatory obligations, leading to regulatory fines and sanctions. We may be required to expend significant additional resources to investigate or remediate vulnerabilities or other exposures arising from cybersecurity threats
3. 56Our business may be negatively affected by risks associated with strategic initiatives we are employing to enhance the effectiveness and efficiency of our operations and of our cybersecurity and technology infrastructure
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5. 58Outsourcing of work to global hub locations may expose us to increased operational risk and reputational harm and may not result in expected cost savings
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7. 60Long-term contracts expose us to increased operational risk, pricing and performance risk
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9. 62We may not be able to protect our intellectual property, and we are subject to claims of third-party intellectual property rights
10. 63Our reputation and business prospects may be damaged if investors in the collective investment pools we sponsor or manage incur substantial losses in these investment pools or are restricted in redeeming their interests in these investment pools
11. 64were less than $1.00. If in the future we were to continue to process purchases and redemptions from such products at $1.00 when the fair market value of our collateral pools’ assets is less than $1.00, we could be exposed to significant liability and our reputation could be harmed
12. 65We may incur losses arising from our investments in sponsored investment funds, which could be material to our consolidated results of operations in the periods incurred
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14. 67of its direct affect on State Street, based on the broader societal impact of the matter