The importance of financial institutions for the current economy is quite apparent in their ability to influence individuals, businesses, market conditions, and the economy at large. The volatility of the economy, especially due to recent geopolitical and market conditions, has placed financial institutions around the world in a precarious position.
The role of risk assessments in preparing such organisations for potential threats cannot be understated.
A well-devised risk assessment has the potential to identify, assess, and mitigate risks associated with the finance industry such as credit risk, operational risk, foreign exchange risk, interest rate risk, liquidity risk, and inflation risk.
Risk assessment in finance allows financial institutions to create robust decision-making processes that support their strategic objectives.