The Russian invasion of Ukraine has caused the threat of cyber attacks as well as market, reputational and counterparty risks to soar, the KRM22 Capital Markets Risk Sentiment Index (CMRSI) has found.
The KRM22 CMRSI, compiled by Acuiti and first released in H2 2021, is a measure of how senior executives perceive a variety of risks facing their business, how prepared they are to deal with them and where firms are investing in risk management.
The H1 2022 report, which is released today, found that cyber risk and market risk remained the top concerns for senior executives in capital markets and the perceived threat they pose had increased substantially since H2 2021.
Counterparty risk and reputational damage had also shot up the list of concerns in the face of high volatility and sanctions against Russian firms and individuals.
“The Russian invasion of Ukraine came during the data collection for the risk index and had an immediate impact,” says Will Mitting, Founder and Managing Director of Acuiti.
“Cyber risk was already trending higher but counterparty risk and the risk of reputational damage soared in the wake of the invasion resulting in both moving up the index. In addition, concerns over market risk spiked following the volatility in the wake of the invasion leading to an elevated risk score for that metric in this report.”
The CMRSI breaks down perceptions of risk by company type and found significantly greater harmonisation of perceived risk in this report compared with H2 2021 with cyber risk and market risk dominating for most respondents.
Conversely, concerns over compliance readiness for new regulations and internal technology risk fell back in terms of the concerns of senior executives.
To download the full report, visit https://www.acuiti.io/capital-markets-risk-index-h1-2022/