American Express 2015 Annual Report Download - page 50

We may not be successful in realizing the benefits associated with our strategic alliances, joint ventures and
investment activity, and our business and reputation could be negatively impacted.
Joint ventures and minority investments inherently involve a lesser degree of control over business operations,
thereby potentially increasing the financial, legal, operational and/or compliance risks associated with the joint
venture or minority investment. In addition, we may be dependent on joint venture partners, controlling shareholders
or management who may have business interests, strategies or goals that are inconsistent with ours. Business
decisions or other actions or omissions of the joint venture partner, controlling shareholders or management may
adversely affect the value of our investment, result in litigation or regulatory action against us and otherwise damage
our reputation and brand.
As discussed in “Global Commercial Services,” we created a joint venture for our Global Business Travel
operations in 2014. There can be no assurance that we will be able to realize the underlying assumptions related to the
joint venture transaction, including accelerating the transformation and growth of the corporate travel business,
creating additional investment capacity and enhancing its suite of products and services. We and the GBT JV face the
risk of potential loss of key customers, vendors and other key business partners as a result of the joint venture
transaction. Our failure to address these risks or other problems encountered in connection with the joint venture
transaction could cause us to fail to realize the anticipated benefits of the transaction, incur unanticipated liabilities
and adversely affect our operations.
We rely on third-party providers of various computer systems, platforms and other services integral to the
operations of our businesses. These third parties may act in ways that could harm our business.
We rely on third-party service providers, merchants, processors, aggregators, GNS partners and other third
parties for services that are integral to our operations, including the timely transmission of accurate information
across our global network. If a service provider or other third party fails to provide the data quality, communications
capacity or services we require, as a result of natural disaster, operational disruptions, terrorism, hacking or other
cybersecurity incidents or any other reason, the failure could interrupt or compromise the quality of our services to
customers.
We are subject to the risk that activities of our third-party service providers may adversely affect our business. A
failure to exercise adequate oversight over third-party service providers, including compliance with service level
agreements or regulatory or legal requirements, could result in regulatory actions, fines, sanctions or economic and
reputational harm to us. There is also a risk the confidentiality, integrity, privacy and/or security of data held by third
parties or communicated over third-party networks or platforms could become compromised, which could
significantly harm our business even if the attack or breach does not impact our systems. In addition, the management
of multiple third-party vendors increases our operational complexity and decreases our control. It is also possible that
the cost efficiencies of certain outsourcings will decrease as the demand for these services increases around the
world.
Our business is subject to the effects of geopolitical events, weather, natural disasters and other conditions.
Geopolitical events, terrorist attacks, natural disasters, severe weather conditions, floods, health pandemics,
intrusion into or degradation of our infrastructure by hackers and other catastrophic events can have a negative effect
on our business. Because of our proximity to the World Trade Center, our headquarters were damaged as a result of
the terrorist attacks of September 11, 2001. Similar events or other disasters or catastrophic events in the future and
events impacting other sectors of the economy, including the telecommunications and energy sectors, could have a
negative effect on our businesses and infrastructure, including our information technology systems. Because we
derive a portion of our revenues from travel-related spending, our business will be sensitive to safety concerns, and
thus is likely to decline during periods in which travelers become concerned about safety issues or when travel might
involve health-related risks. In addition, disruptions in air travel and other forms of travel caused by such events can
result in the payment of claims under travel interruption insurance policies that we offer and, if such disruptions to
travel are prolonged, they can materially adversely affect overall travel-related spending. If the conditions described
above (or similar ones) result in widespread or lengthy disruptions to travel, they could have a material adverse effect
on our results of operations. Card Member spending may also be negatively impacted in areas affected by natural
disasters or other catastrophic events. The impact of such events on the overall economy may also adversely affect
our financial condition or results of operations.
Our success is dependent, in part, upon our executive officers and other key personnel, and the loss of key
personnel could materially adversely affect our business.
Our success depends, in part, on our executive officers and other key personnel. Our senior management team
has significant industry experience and would be difficult to replace. The market for qualified individuals is highly
competitive, and we may not be able to attract and retain qualified personnel or candidates to replace or succeed
members of our senior management team or other key personnel. As further described in “Supervision and
Regulation — Compensation Practices,” our compensation practices are subject to review and oversight by the
Federal Reserve and the compensation practices of our U.S. bank subsidiaries are subject to review and oversight by
the FDIC and the OCC. Regulatory review and oversight could further affect our ability to attract and retain our
executive officers and other key personnel. The loss of key personnel could materially adversely affect our business.
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