Data transfers may increase which types of risks?

Data transfers may increase which types of risks?

• A. Cybersecurity, confidentiality, and data protection risks
• B. Market and liquidity risks
• C. Operational delays and scheduling risks
• D. Reputational risks only

Answer: (A)

Transferring data exposes systems and processes to security and privacy threats that aren’t tied to financial markets or scheduling. When data moves between networks, apps, vendors, or across borders, it can be intercepted, accessed by unauthorized parties, or leaked—hence the heightened cybersecurity and confidentiality risks. If personal or sensitive information is involved, data protection obligations come into play, so breaches can lead to regulatory penalties and compliance issues as well. While reputational harm can follow a breach, the core risk created by data transfers is the actual exposure of data to unauthorized access and improper handling, not just how the transfer might affect market conditions or timelines.

Transferring data exposes systems and processes to security and privacy threats that aren’t tied to financial markets or scheduling. When data moves between networks, apps, vendors, or across borders, it can be intercepted, accessed by unauthorized parties, or leaked—hence the heightened cybersecurity and confidentiality risks. If personal or sensitive information is involved, data protection obligations come into play, so breaches can lead to regulatory penalties and compliance issues as well. While reputational harm can follow a breach, the core risk created by data transfers is the actual exposure of data to unauthorized access and improper handling, not just how the transfer might affect market conditions or timelines.