State Street (STT) risk factors, 2026 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
2. 02management, and in our financial results, due to the significant size of our relationship with many of our institutional clients, and are also subject to significant pricing pressure due to trends in the market for custodial services and the considerable market influence exerted by those clients
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. 04State Street Corporation | 22
5. 05Acquisitions, strategic alliances, joint ventures and divestitures pose risks for our business
6. 06investigations into matters conducted in significant part by acquired entities
7. 07The integration and the retention and development of the benefits of our acquisitions result in risks to our business and other uncertainties
8. 08State Street Corporation | 24

Financial Market Risks

1. 09Political, geopolitical and economic conditions and developments could adversely affect us, particularly if we face increased uncertainty and unpredictability in managing our businesses
2. 10As our product offerings expand, in part as we seek to take advantage of perceived opportunities arising under various regulatory reforms and resulting market changes, the degree of our exposure to various market and credit risks will evolve, potentially resulting in greater revenue volatility
3. 11State Street Corporation | 25
4. 12State Street Corporation | 26
5. 13Our business activities expose us to interest rate risk
6. 14Management Activities” in our Management’s Discussion and Analysis in this Form 10-K
7. 15State Street Corporation | 28
8. 16State Street Corporation | 29
9. 17issuing such bonds and contingent liquidity risk
10. 18Fee 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
11. 19If 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
12. 20State Street Corporation | 32
13. 21Our return of capital to shareholders through common share repurchases and common stock dividends may be variable and is subject to various business and financial factors and regulatory requirements and approvals of our Board of Directors
14. 22We may need to raise additional capital or debt in the future, which may not be available to us or may only be available on unfavorable terms
15. 23State Street Corporation | 33
16. 24Any 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
17. 25State Street Corporation | 34
18. 26Compliance and Regulatory Risks
19. 27Basel III and Dodd-Frank Act
20. 28provisions of the Dodd-Frank Act, which could adversely affect us and our ability to comply with the Basel III rule
21. 29Along with the Basel III rule, banking regulators also introduced additional requirements, such as the SLR, LCR and NSFR, each of which presents compliance risks
22. 30State Street Corporation | 35
23. 31Supervisory Stress Testing and Capital Planning
24. 32For 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
25. 33State Street Corporation | 36
26. 34State Street Corporation | 37
27. 35Global and Non-U.S. Regulatory Requirements
28. 36proposed regulations in the United States could create increased compliance and other costs that would adversely affect our business, operations or profitability. Geopolitical events also have the potential to increase the complexity and cost of regulatory compliance
29. 37Consequences of Regulatory Environment and Compliance Risks
30. 38result in significant restructuring or related costs or exposures or may result in inefficiencies or increased costs due to associated changes in our operating model
31. 39Our businesses may be adversely affected by government enforcement and litigation
32. 40State Street Corporation | 39
33. 41Our businesses may be adversely affected by increased and conflicting political and regulatory scrutiny of asset management, stewardship and sustainable investment strategies and services offered in the jurisdictions in which we operate
34. 42directed at other industry participants, could result in reduced investor demand for sustainability- or ESG-related products, which could in turn negatively affect our assets under management and resulting fee revenues
35. 43Any 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
36. 44Changes in accounting standards may adversely affect our consolidated financial statements
37. 45Changes 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
38. 46We could face liabilities for withholding and other non-income taxes as a result of tax authority examinations
39. 47State Street Corporation | 42
40. 48Our businesses may be negatively affected by adverse publicity or other reputational harm

Operational, Cyber and Technology Risks

1. 49State Street Corporation | 43
2. 50impact our ability to comply with regulatory 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. 51State Street Corporation | 44
4. 52Our 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
5. 53State Street Corporation | 45
6. 54State Street Corporation | 46
7. 55Outsourcing of work to global hub locations may expose us to increased operational risk and reputational harm and may not result in expected cost savings
8. 56Long-term contracts expose us to increased operational risk, pricing and performance risk
9. 57State Street Corporation | 47
10. 58We may not be able to protect our intellectual property, and we are subject to claims of third-party intellectual property rights
11. 59Our 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
12. 60State Street Corporation | 48
13. 61We 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
14. 62economic interests in the fund and could exceed the value of our initial seed capital investment
15. 63State Street Corporation | 50