Risk Management: The Need of the Hour

A survey by KPMG on Consumer Market Companies investing in India in Fall 2006 stated that the #1 reason for these companies to invest in emerging markets such as India and China was Revenue Growth. With the current scenario, companies are expected to float very bad numbers for the coming quarter and most of them are expected to withdraw guidance.

But the companies that are banking on this chaos are Risk Management firms. I am not talking about Investment Banks who are into risk management but companies that specialize in risk management. Their business is said to have grown by 3% in less than 2 months and is expected to rise further. The growth is not just in terms of the number of clients but the extent of service depth for existing clients as well. Clients are demanding more extensive risk mitigation mechanism and customized software. Most of these softwares run into millions if not more. So practically speaking, the liquidity seems affected because it is being squeezed to certain specific segments.