FIS FIS Business Risk Report

A. Cybersecurity Threats

1. Data breaches: FIS, being a global provider of financial services technology, faces significant risks related to data breaches. The company manages substantial amounts of sensitive financial data, making them a prime target for cyberattacks.

2. Phishing attacks: Phishing remains a consistent threat to FIS as cybercriminals aim to trick employees into providing access to the company’s internal systems. Successful phishing attacks can lead to significant information security breaches.

B. Technology Failure

1. System outages: FIS’s operations could be severely impacted by unforeseen system outages. As a technology-based service provider, these outages can disrupt their service offerings globally, affecting numerous clients.

2. IT disruptions: Routine IT disruptions pose operational challenges for FIS. These could result from software malfunctions or hardware failures, potentially leading to temporary disruptions in their services to banks, businesses and other clients.

A. Market Volatility

1. Fluctuations in interest rates: Changes in interest rates can affect FIS’s financial performance, particularly in terms of how the company manages its own investments and the financing costs for its operations.

2. Foreign exchange exposure: FIS operates on a global scale, which exposes it to foreign exchange risk. Movements in currency exchange rates can impact the company’s earnings and overall financial condition.

B. Credit Risk

1. Default risk on loans: As a part of its financial offerings, FIS is exposed to the risk of loan defaults, which can affect its asset quality and financial sustainability.

2. Counterparty risk: In its dealings with other financial institutions, there is always a risk that the counterparty might fail to fulfill its financial obligations, which could impact FIS’s financial position.

A. Non-Compliance

1. Violations of financial regulations: FIS must adhere to numerous financial regulations across different regions. Non-compliance could result in penalties and affect its business operations.

2. GDPR compliance: As FIS operates extensively in Europe, compliance with GDPR is crucial. Failure to adhere to these regulations could lead to substantial fines and reputational damage.

B. Legal Risks

1. Lawsuits and legal actions: FIS may be subject to various lawsuits and legal actions, which could involve significant legal expenses and damage its reputation.

2. Regulatory fines: Non-compliance with financial and data protection regulations can result in significant fines from regulatory bodies, impacting the financial health of the company.

A. Competition

1. Market share erosion: FIS faces intense competition from both established financial service providers and fintech start-ups. This competition could potentially erode its market share.

2. Disruptive technologies: The rapid evolution of disruptive technologies in the financial sector poses a continual strategic risk to FIS, challenging the company to innovate continually or risk obsolescence.

B. Reputational Risk

1. Brand damage: Any negative publicity, whether true or not, can damage FIS’s brand reputation, which is crucial in the trust-sensitive financial services industry.

2. Public relations crises: Mishandling of sensitive data, service failures, or high-profile litigation could lead to public relations crises and lasting damage to its reputation.

A. Pandemics and Natural Disasters

1. Business disruptions: Pandemics or natural disasters can disrupt FIS’s global operations, potentially leading to temporary closures of offices and data centers.

2. Supply chain interruptions: Such events could also interrupt the supply chains and affect the reliability and delivery of critical services to their clients.

B. Key Personnel Risk

1. Loss of critical employees: The unexpected loss of key personnel at FIS could disrupt operations and delay strategic initiatives.

2. Succession planning: Adequate succession planning is necessary to mitigate the risk connected with the turnover of critical staff.

A. Operational: FIS utilizes advanced cybersecurity measures, regular IT audits, and system upgrades to safeguard against operational risks such as system failures and cyberattacks.

B. Financial: FIS manages financial risks through diversified investments, hedging against currency and interest rate exposures, and stringent credit assessments.

C. Regulatory and Compliance: The company adheres strictly to regulatory requirements, engages in continuous training for compliance, and regularly reviews its compliance strategies.

D. Strategic: FIS maintains a competitive edge through continuous research and development, investing in innovative technologies, and strategic partnerships.

E. Business Continuity: FIS develops comprehensive disaster recovery plans and maintains multiple data centers around the world to ensure continuity of service during disasters.