Blog — 14 Dec, 2021
Insight Weekly: Rise of cyberrisk; banks' branch closure spree; understanding NFTs
By Louis Bacani
In this edition, we take a close look at the rise of cyberrisk and its impact on various industries. In financial services, experts fear that a cyberattack on a company could trigger a domino effect leading to a financial crisis due to the sector’s digital interconnectedness. According to the IMF, cyberthreats could cost banks up to 9% of their average annual net income globally, or about $100 billion. Cyberincidents are also especially costly in the healthcare industry, which is facing greater risk of cybersecurity hacks amid aging medical devices and a shift to at-home care during the pandemic. The energy sector is also grappling with expanding vulnerabilities and evolving threats as governments and private stakeholders race to secure critical infrastructure.
The COVID-19 pandemic has bolstered digital banking usage, allowing U.S. banks to accelerate branch closures and shift resources toward technology and digital. The industry has closed more than 2,700 branches so far in 2021, surpassing the record number of net closures in 2020, and industry experts do not expect banks to slow down anytime soon.
Nonfungible token, or NFT, uses the concept of a distributed blockchain for the chain of ownership of any type, or sometimes just a piece, of a digital asset. NFT technology is expected to persist and form part of the digital transformation for many types of trade, according to 451 Research.
Cyberrisk in Focus
Cyberattacks threaten stability of interconnected financial services
Rapid digitalization puts the global financial system at risk as cybercriminals rake in tens of millions of dollars by attacking businesses and institutions.
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At-home care boom, aging medical devices open up healthcare to cyberattacks
From pacemakers to insulin pumps, the healthcare technology revolution has transformed patient care and created new entrances for enterprising hackers.
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Power sector races against multiplying cyberthreats
The specter of cybersecurity risk is growing as the electricity sector decentralizes and digitizes, with the influx of millions of smaller assets on the system — from wind turbines to electric vehicles — increasing the surface of attack.
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Pipeline operators face huge challenge preventing repeat of Colonial hack
With vulnerabilities expanding, threats multiplying and regulation developing, U.S. pipeline operators will have to rapidly scale up their cyber capabilities.
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Deep Dives
In-depth features looking at the impact of major news developments in key industries.
Financials
No end in sight for US banks' record-breaking branch closure spree
U.S. banks are looking to do more with less by rapidly consolidating their branch footprints and reinvesting resources into digital channels.
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US banks' efficiency ratios improve in Q3 as net interest income jumps
U.S. banks posted total net interest income of $134.4 billion in the quarter, up from $129.2 billion in the linked quarter and $128.8 billion in the year-ago period.
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Biden's pick for supervision vice chair to be tough on banks, whoever it is
Attention has turned to President Joe Biden's choice to regulate the country's bank holding companies after he reappointed Chair Jerome Powell to his post and tapped Fed Governor Lael Brainard to be vice chair.
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European banks record 'material' rise in problem loans for pandemic-hit sectors
The average nonperforming loan ratio in the accommodation and food service sector grew to 9.7% from 7.8% a year ago, according to the European Banking Authority.
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Global systemic importance set to rise for China banks, fall for Japan lenders
Chinese lenders will likely be more interconnected with the global financial system, thus boosting their global systemic importance, while Japanese megabanks are set to further scale back their overseas operations.
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Credit and Markets
Quicker Fed taper to bolster dollar, hit bonds, stocks
Federal Reserve Chairman Jerome Powell opened the door to ending bond purchases sooner as markets weigh the possible impact of the latest COVID-19 variant.
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Bad breadth plagues Nasdaq as mega-cap stocks mask market weakness
Leaving aside its five largest stocks, the Nasdaq Composite Index is down more than 22% on the year.
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Technology, Media and Telecom
E-commerce retailers' hiring spree shows robots not ready for many human tasks
Retailers are utilizing more automation to help improve operational efficiencies in a tight labor market, but attracting and retaining human workers remains essential as many tasks are too advanced for robots.
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Metals and Mining
Top miners' copper output plummets 4.4% in Q3'21
Among the top 20 copper miners, only six companies had year-over-year production increases in the third quarter.
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Nickel producers suffer bruising Q3'21 despite steel, battery hype
The world's top five nickel producers reported lower primary nickel output during the third quarter as accidents and unplanned maintenance, alongside persistent supply disruptions, bogged down production at several facilities.
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Energy and Utilities
US solar developers see hot Q3 as they turn to battery storage
The U.S. added 2,369 MW of solar generation and pairing projects with 127.6 MW of battery storage, according to S&P Global Market Intelligence data.
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Gas utilities see earnings decline in Q3; few beat Wall Street estimates
Just two out of nine natural gas utilities in a select group topped year-ago EPS in the third quarter, and only three beat equity analysts' expectations, continuing and deepening a short-term earnings slump for the group.
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US LNG exports hit record highs as global gas crunch persists
Exports of the fuel from the U.S. have shown little sign of slowing down in the final month of 2021 as world buyers continue to seek winter supplies.
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The Week in M&A
NVIDIA-Arm deal scrutiny risks torpedoing big payday for financial advisers
Asia-Pacific financial institutions M&A interest tracker
NextEra considers financial flexibility in internal, external M&A strategies
Athene's $1B Aqua Finance buy evokes a bygone era but furthers a modern strategy
The Big Number
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