What is the Financial Risk Management Process? A financial risk management process is a series of steps undertaken to identify potential financial risks, assess their severity, and identify how they can be managed. The overarching process of any risk management process is the following: Identifying the risk Assessing and quantifying the risk Defining strategies to…
What are Financial Risk Management Strategies? Financial risk management strategies are a plan of action or policies that are designed to deal with various forms of financial risk. The strategies are important for any firm or individual to manage the inherent financial risks that come with operating within the economy and financial system. Examples of…
What is Human Capital Management (HCM)? Human capital management (HCM) refers to how an organization recruits, engages with, empowers, and ultimately retains its people. The concept of human capital management has always existed, although it was primarily considered the domain of HR (Human Resources). But as ESG (Environmental, Social & Governance) has evolved as an…
The Importance of Risk Management in Finance Explained Risk management is particularly important within the field of finance, and over time has become increasingly important for each and every player within the financial services ecosystem. During the 2008 Global Financial Crisis, many vulnerabilities in our risk management systems were uncovered. Since then, governments, financial services…
The Importance of Financial Risk Management Books Like any discipline, financial risk management has best practices and standards that have accumulated and become more sophisticated over time. Financial risk management books allow new and aspiring risk managers to quickly learn these best practices and standards. These books also provide insight into previous financial mishaps, exploring…
What is Risk and Return in Financial Management? When it comes to investing, risk and return come hand-in-hand – you cannot have one without the other. As an investor, typically, you need to take on more investment risk in order to realize higher investment returns. While this is not always the case, in general, investors…
What are Tools of Financial Risk Management? Tools of financial risk management are the set of systems and processes in place to identify and assess various financial risks, as well as formulate, implement, and monitor appropriate risk responses. Financial risk is present in some form in every business large and small. That being said, financial…
What is Financial Risk Management Software? Financial risk management software solutions are computer-based programs that help identify, measure, and model out the risk associated with specific financial risk exposures. Investment in financial risk management software by firms is a form of risk mitigation. The software is widely used by companies in the financial services sector…
What is an ESG Fund? An ESG Fund is a broad term used to describe any investment vehicle for which the fund manager(s) used environmental, social, and governance (ESG) criteria to inform its composition and asset allocation strategy. ESG fund managers use a variety of investment strategies – including negative screening, thematic investing, or ESG…
