American Express 2015 Annual Report Download - page 47

Our brand and reputation are key assets of our Company, and our business may be affected by how we are
perceived in the marketplace.
Our brand and its attributes are key assets of ours, and we believe our continued success depends on our ability to
preserve, grow and leverage the value of our brand. Our ability to attract and retain consumer and small business Card
Members and corporate clients is highly dependent upon the external perceptions of our level of service,
trustworthiness, business practices, merchant acceptance, financial condition and other subjective qualities. Negative
perceptions or publicity regarding these matters — even if related to seemingly isolated incidents — could erode trust
and confidence and damage our reputation among existing and potential Card Members and corporate clients, which
could make it difficult for us to attract new Card Members and customers and maintain existing ones. Negative public
opinion could also result from actual or alleged conduct in any number of activities or circumstances, including card
practices, regulatory compliance and the use and protection of customer information, and from actions taken by
regulators or others in response to such conduct. Social media channels can also cause rapid, widespread reputational
harm to our brand.
Our brand and reputation may also be harmed by actions taken by third parties that are outside our control. For
example, any shortcoming of a third-party vendor, merchant acquirer or GNS partner may be attributed by Card
Members and merchants to us, thus damaging our reputation and brand value. The lack of acceptance or suppression
of card usage by merchants can also negatively impact perceptions of our brand and our products, lower overall
transaction volume and increase the attractiveness of other payments systems. Adverse developments with respect
to our industry may also, by association, negatively impact our reputation, or result in greater regulatory or legislative
scrutiny or litigation against us. Furthermore, as a corporation with headquarters and operations located in the United
States, a negative perception of the United States arising from its political or other positions could harm the
perception of our company and our brand. Although we monitor developments for areas of potential risk to our
reputation and brand, negative perceptions or publicity could materially and adversely affect our revenues and
profitability.
If we cannot successfully execute on our strategy, our business and financial results may be adversely
impacted.
We may not be able to implement important strategic initiatives in accordance with our expectations, which may
result in an adverse impact on our business and financial results. These strategic initiatives are designed to improve
our results of operations and drive long-term shareholder value, and include:
• Growing our Card Member base and merchant network
• Deepening customer relationships through lending and rewards
• Increasing our international presence
• Growing in commercial payments
• Developing newer, adjacent opportunities like our loyalty coalition business
The process of developing new products and services and enhancing existing products and services is complex,
costly and uncertain, and any failure by us to anticipate customers’ changing needs and emerging technological trends
accurately could significantly harm our ability to compete effectively. In addition, we may underestimate the time and
expense we must invest in new products and services before they generate material revenues, if at all.
Our growth strategy also includes the pursuit of new business opportunities and, potentially, acquisitions.
However, we may not be able to take advantage of new business opportunities or to identify and secure future
acquisition candidates on terms and conditions that are acceptable to us, which could impair our growth.
We also continue to pursue a disciplined expense-management strategy, although there is no guarantee that we
will be able to control the growth of expenses. Expenses incurred in our foreign entities are subject to foreign exchange
volatility and may cause our expenses to increase in any particular period even if we otherwise achieve cost savings. In
addition, compliance, legal and related costs are difficult to predict or control given the current environment and may
vary from period to period. As cybersecurity threats continue to evolve, we have invested and will continue to invest
significant additional resources to continue to modify and strengthen our protective security measures, investigate
and remediate any vulnerabilities of our information systems and infrastructure and develop new technology to
mitigate security risks. If we are unable to successfully manage our expenses, our financial results will be negatively
affected.
A significant disruption or breach in the security of our information technology systems or an increase in
fraudulent activity using our cards could lead to reputational damage to our brand and significant legal,
regulatory and financial exposure and could reduce the use and acceptance of our charge and credit cards.
We and other third parties process, transmit and store account information in connection with our charge and
credit cards and prepaid products, and in the normal course of our business, we collect, analyze and retain significant
volumes of certain types of personally identifiable and other information pertaining to our customers and employees.
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