Risk Factors Update Summary

• Increased resiliency risk and client expectations require additional investments for operational infrastructure and compliance. This may result in significant costs and reputational damage.
• Transition of ETF assets from a large client to other providers represents a significant financial impact of approximately 1.9% of total fee revenue.
• Changes in interest rates and market conditions could lead to reduced levels of client deposits and impact net interest income.
• Outsourcing work to global hub locations, such as India and Poland, may expose the company to increased operational risk and reputational damage. This could lead to an increase in reputational risk.
• Introduction of new products and services related to digital assets and artificial intelligence may impose costs and increased operational risks.
• Acquisitions of Investment Servicing and Asset Management businesses entail fiduciary risks associated with client retention and potential cultural conflicts.
• Implementation of new technology infrastructure and operational initiatives may result in inadvertent data disclosures or operating errors.
• The company faces potential loss resulting from inadequate internal processes, employee supervision, or monitoring mechanisms. This could materially affect future consolidated results of operations.
• Acquisitions, joint ventures, and strategic alliances present risks of not achieving anticipated revenue growth, cost savings, or operational improvements.
• Increased costs and expenses due to competitive labor market pressures and inflationary factors may impact financial performance.
• Failure to protect technology infrastructure against cybersecurity threats could result in significant financial losses and reputational harm. The company may need to expend significant additional resources to remediate vulnerabilities.
• Increased operational risk from outsourcing work to lower-cost geographic locations may lead to reputational risk. Clients may question services conducted in specific jurisdictions due to geopolitical risks.
• Failure to protect intellectual property effectively may allow competitors to duplicate technology and products, affecting the company's ability to compete. This could result in revenue decline.
• Acts of terrorism, natural disasters, or other unforeseen events could negatively impact business operations and financial markets, leading to potential losses.