Strategic Shareholder Climate and Risk Financial Financial Barclays PLC 278 report information sustainability report Governance review review statements Annual Report 2022 Material existing and emerging risks (continued) customers), loss of business, missed require changes to certain operations or to clients and counterparties in a timely practices which could also inhibit the business opportunities and reputational manner; (ii) failing to settle and/or confirm Group’s development or marketing of damage, all of which could have a material transactions; (iii) causing funds transfers, certain products or services, or increase adverse impact on the Group’s business, capital markets trades and/or other the costs of offering them to customers. results of operations, financial condition transactions to be executed erroneously, Any of these events could damage the and prospects. illegally or with unintended consequences; Group’s reputation, subject the Group to and (iv) adversely affecting financial, e) Data management and information material fines or other monetary penalties, trading or currency markets. Any of these protection make the Group liable to the payment of events could materially disadvantage the The Group holds and processes large compensatory damages, divert Group’s customers, clients and management's time and attention, lead to volumes of data, including personal counterparties (including them suffering enhanced regulatory oversight and information, financial data and other financial loss) and/or result in a loss of otherwise materially adversely affect its confidential information, and the Group’s confidence in the Group which, in turn, business, results of operations, financial businesses are subject to complex and could have a material adverse effect on the condition and prospects. evolving laws and regulations governing Group’s business, results of operations, the privacy and protection of data, For further details on data protection regulation financial condition and prospects. + applicable to the Group, refer to the supervision and including Regulation (EU) 2016/679 regulation section. h) Supplier exposure (General Data Protection Regulation as it applies in the EU and the UK). This data The Group depends on suppliers for the f) Algorithmic trading could relate to: (i) the Group’s clients, provision of many of its services and the In some areas of the investment banking customers, prospective clients and development of technology. Whilst the business, trading algorithms are used to customers and their employees; (ii) clients Group depends on suppliers, it remains price and risk manage client and principal and customers of the Group’s clients and fully accountable to its customers and transactions. An algorithmic error could customers and their employees;(iii) the clients for risks arising from the actions of result in erroneous or duplicated Group’s suppliers, counterparties and suppliers and may not be able to recover transactions, a system outage, or impact other external parties, and their from its suppliers any amounts paid to the Group’s pricing abilities, which could employees; and (iv) the Group’s customers and clients for losses suffered have a material adverse effect on the employees and prospective employees. by them. The dependency on suppliers and Group’s business, results of operations, sub-contracting of outsourced services The international nature of both the financial condition, prospects and introduces concentration risk where the Group’s business and its IT infrastructure reputation. failure of specific suppliers could have an also means that data and personal g) Processing errors information may be available in countries impact on the Group’s ability to continue The Group’s businesses are highly other than those from where the to provide material services to its dependent on its ability to process and information originated. Accordingly, the customers. Failure to adequately manage Group must ensure that its collection, use, monitor, on a daily basis, a very large supplier risk could have a material adverse transfer and storage of data, including number of transactions, many of which are effect on the Group’s business, results of personal information, complies with all highly complex and occur at high volumes operations, financial condition and applicable laws and regulations in all and frequencies, across numerous and prospects. relevant jurisdictions, which could: (i) diverse markets in many currencies. As the increase the Group’s compliance and Group’s customer base and geographical operating costs; (ii) impact the reach expand and the volume, speed, development of new products or services frequency and complexity of transactions, or the offering of existing products or especially electronic transactions (as well services; (iii) affect how products and as the requirements to report such services are offered to clients and transactions on a real-time basis to clients, customers; (iv) demand significant regulators and exchanges) increase, oversight by the Group’s management; developing, maintaining and upgrading and (v) require the Group to review some operational systems and infrastructure elements of the structure of its businesses, operations and systems in less becomes more challenging, and the risk of efficient ways. Concerns regarding the systems or human error in connection with effectiveness of the Group’s measures to such transactions increases, as well as the safeguard data, including personal potential consequences of such errors due information, or even the perception that to the speed and volume of transactions those measures are inadequate, could involved and the potential difficulty expose the Group to the risk of loss or associated with discovering errors quickly unavailability of data or data integrity enough to limit the resulting issues and/or cause the Group to lose consequences. Furthermore, events that existing or potential clients and customers, are wholly or partially beyond the Group’s and thereby reduce the Group’s revenues. control, such as a spike in transaction Furthermore, any failure or perceived volume, could adversely affect the Group’s failure by the Group to comply with ability to process transactions or provide applicable privacy or data protection laws banking and payment services. and regulations may subject it to potential contractual liability, claims, litigation, Processing errors could result in the regulatory or other government action Group, among other things: (i) failing to (including significant regulatory fines) and provide information, services and liquidity