Every business, regardless of its size, takes some level of risk. There are several variables to consider when making any financial decision, and some risk is inevitable. But you can certainly mitigate it. Therefore, companies are increasingly turning to specialists in this field for expert evaluations to make decisions that directly affect a company’s sales. Read more about financial risk management and why it’s a promising career…
What is financial risk management?
Every investment comes with potential risks. In fact, there is no profit without risk. Contrary to what we are used to, risks in finance can be both positive and negative. in summary, a risk is any deviation from the expected result. Risk management is the necessary step of evaluating possible outcomes, analyzing potential gains and losses, and deciding what actions should (or should not) be taken based on the conclusions of the evaluation.
A Accenture 2019 report pointed out that new investment risks are emerging at an unprecedented rate. The top three emerging challenges identified by specialists were disruptive technologies, data breaches, and operational risks. Additionally, climate change has become a factor to consider as property, infrastructure and land damage present new challenges.
The 2007 US recession was caused by a combination of the real estate boom of the early 2000s and low interest rates, leading investors to offer home loans to individuals with poor credit ratings. Their eventual inability to pay off such loans led to a housing crisis that caused an economic meltdown, one of the worst the country (and the world) has seen.
This is just one example of how financial decisions can affect people’s lives on a national or even global scale. There are many other factors today that responsible financial managers are asking heavily…
While some may believe that financial risk only affects high-level CEOs and investors, it’s important to understand how it affects everyone. A country’s population is completely interconnected through its financial system, and bad financial decisions can lead to an unreliable market and a declining economy. A reliable financial market means a stable and sustainable economy in which everyone benefits from better living conditions.
Solving climate change risks
As mentioned, The reality of climate change can affect businesses and investments in many ways. In addition to the physical risks of property damage, business interruption and the need to relocate, factors such as technological change and political changes must be taken into account in a risk analysis.
However, the full extent of the impact of climate change on the economy is still unknown. Experts predict that the economic impact of climate change will only intensify in the coming years, meaning that future professionals could face a very different scenario than what we see today.
Cyber risk is the biggest threat to the global financial system, says Federal Reserve Chairman Jerome Powell. Financial institutions are prime targets for cyberattacks, and industry leaders have placed cybersecurity at the top of their priorities, above all other potential risks. Risk managers must strategize to effectively address the cyber threat in a world that relies on technology to keep the global economy afloat.
The recent boom in cryptocurrency assets may have a direct impact on the entire financial system. A Financial Stability Board report has highlighted vulnerabilities in the crypto market, such as B. Connections to the regulated financial system, liquidity mismatches, and credit and operational risks. Blockchain intelligence companies have invested in risk management technology, but this remains a sector to watch closely as it evolves.
Not many companies fully appreciate that geopolitics poses a multitude of financial risks. Access to natural resources, proximity to conflict countries, restrictions on external relations, corruption and local culture are just a few Factors to consider in a risk analysis. Each location offers a specific financial scenario, and only when a company fully understands that context can it use it to its advantage.
Every business requires a dedicated financial risk management professional. Many companies hire consultants or teams to anticipate exposure, quantify risk and plan mitigation strategies. As a risk specialist, you can work in sales, trading, marketing, banking and many other areas and benefit from the increasing demand for qualified professionals in this field.
ICADE Business School
You can start a career in risk management with a bachelor’s degree in accounting, economics or mathematics, but companies are more likely to look for professionals with specialized postgraduate degrees in the field. To prepare students for the increasing expectations of the market, ICADE Business School has the Official Master’s Degree in Financial Risk Managementwhich offers specialized training for students of all disciplines who want to start a career in risk management.
As part of the Faculty of Economics and Business Studies at the Pontifical University of Comillas in Spain, ICADE has over 50 years of experience teaching history to students for the competitive business world. Located in beautiful Madrid, ICADE, part of Pontifical University of Comillasstrives to evolve with economic trends and always provide its students with a quality, up-to-date education.
For former student Guillermo Sánchez: “This degree offers excellent education and training that lays the foundation for a successful professional career in a field that is in high demand by companies.”
There are no specific academic requirements for incoming students – you can apply regardless of what field your undergraduate degree was in, but it is highly recommended that you have a strong interest in engineering and mathematics as these are fundamental in this area.
The course is divided into four parts: The first module provides the theoretical basics required for the course, the second shifts to specific risk management topics. The third and fourth modules focus on deepening your thesis and professional experience through an internship.
Graduates of the ICADE program pursue successful careers: almost 100% of alumni find a job within six months of graduation. “This course will enable you to fully develop your talents and respond perfectly to the needs of because of their international perspective on the market,” says graduate Giorgo Bertelli.
For more information on ICADE’s Financial Risk Management master’s program and the application requirements, go to Visit the program website!
Article written in connection with ICADE Business School.