New Face of Risk Management

Every displacement at large has a negative connotation to it due to its nature of ruling out the obvious. Similar is the story of the recent economic turmoil. But it has a brighter side to it. Of course, we can cry over spilled milk and point out a 1000 things that we did wrong but the important part is finding the things that are right and need to be done. Risk management traditionally has focused on Risk Transfer which worked well during the early 1999 to late 2003 period. But with increased exposure to derivatives and other exotic financial instruments, the world has now come to realize the significance of other key areas Risk Management can help in. Risk Assumption and Risk Elimination are the areas of focus for the Risk Management industry as a whole. This comes as a result of a heightened need to safeguard business interest so that core activities can be conducted without the threat of value erosion. Businesses had been so focused on “Know Your Customer” post September 11 that the “Know Your Business” part was neglected.
With the derivatives exposure globally being at least 10 times the entire recorded tangible investments, the importance of Risk Management services globally has taken centre stage. Risk management against terror threat, intentional risk, exposure risk and cyber threat are the prime areas of focus today.