The landscape of operational risk and financial services risk management, including financial risk management, is shifting rapidly. Each day’s news carries fresh indications that the future is on its way, and often it feels like there are new threats and reaction tactics around every corner. There are already evident the outlines of opportunities and potential challenges for risk leaders, indeed, all business leaders.
And what are certified financial risk managers and leaders supposed to plan for? Identifying these seven developments that have the potential to transform the risk landscape for businesses around the world dramatically and change how they react to and manage risk, including financial risk analysis for liquidity risks and risk management.
What you’ll see is that the emergence and implications of risks, including liquidity risks and improper financial risk management, where the very essence of the discipline of risk, are changing. The good news here? The strategic conversation about risk is also shifting. For today’s leaders, risk can be used as a tactic to build value and reach higher performance levels. It’s no longer to fear, minimize, and avoid something. For each pattern, explore the factors, possibilities, risks, and real-world examples. And ask yourself: can your company leverage these patterns to be even more robust, more resilient?
As companies collaborate more closely with a broad number of external stakeholders, particularly ‘crowds,’ they will rely heavily on them to collectively define, manage and minimize risks, including financial risks and enable effective financial risk management. Consequently, the interconnected economy demands collaborative finance and risk management.
Disruption influences the executive agenda as the persistent threat of disruption arising from new technology, changes in the business model, and changes in the environment will push executives to make crucial strategic decisions to drive organizations’ performance. Especially for certified financial risk managers, this will help them make strategic decisions with practical financial risk analysis.
In order to thrive in a hyper-connected environment dominated by mobile devices, social media, and evolving public standards, leaders can efficiently and effectively resolve accelerated, exacerbated threats to the reputations of their organizations.
As risk monitoring and compliance points, intelligent technologies (also known as the Internet of Things) are equipped with a range of sensors, communications, and computing capabilities support. However, not everyone can invest in such hefty technologies. Then how do organizations recognize risk incidents, obtain critical risk insights, and even take urgent environmental action? Opt for consulting firms with apt finance and risk management services who have the right expertise to handle and formulate pervasive and complex risk management procedures, including financial risk management. Such certified financial risk managers specialize in risk management and bring years of experience that cannot be automated.
Decreasing costs, declining size, increased digital accessibility, rising usage on the Internet of Things, and increasing acceptance of wearables in the workplace surely have enabled organizations to leverage advanced analytics.
However, it is still crucial to ensure effective monitoring strategies in networked environments to avert any risks, including problems arising out of user access or data breaches. For the same, while organizations leverage advanced technology, it is essential they consider hiring a team of expert risk management consultants, including financial risk management consultant and operational risk management professionals, to ensure effective supervision.
Methods of risk management, be it for operational risk or financial risk management, can never be foolproof, and growing investments in preventive procedures frequently produce only small benefits along with unwelcome side effects such as slowing down innovation.
In order to focus on awareness (detecting trends that may suggest or even predict risk events) and resilience (the ability to contain and reduce the effect of risk events quickly), organizations are widening their approaches. Actions such as these can be expected to increase in importance: tracking emerging risks, detecting business process anomalies, handling third-party vendor stoppages, and planning for workplace disturbances related to emerging risks.
Contact our team at TRC Corporate Consulting to find more about our risk management services, including financial risk management. Our financial services risk management team has extensive experience in handling risk management for all types of organizations!