Over the last couple of years, the banking industry has undergone significant transformation due to factors including business model transformation, adoption of advanced technologies, changing regulatory environments, and more. In an increasingly complex environment of the banking industry, new complexities arise, requiring an adjustment in risk management systems and procedures. Financial risks in the banking sector can potentially cripple the business if not managed on time. Therefore, it is imperative for companies in the companies in the banking sector to implement financial risk analysis and management strategies to identify potential risks in advance, analyze them, and take steps to eliminate them.
The client, a well-known bank in Canada wanted to develop financial risk management strategies to manage risks affecting the growth of the industry. Changes in market variables, including interest rate and exchange rate fluctuations, as well as movements in market prices of securities and financial derivatives created risks that negatively impacted the financial capital of the client. Also, these risks affected the company’s bottom line. Hence, the client approached Infiniti Research to leverage their expertise in offering financial risk analysis solutions. With Infiniti’s financial risk analysis solution, the client wanted to develop a comprehensive and dynamic framework for monitoring, measuring and managing liquidity, interest rate, foreign exchange, and commodity price risks.
Solutions Offered and Value Delivered
With years of expertise in offering actionable financial risk analysis solutions, the experts at Infiniti Research helped the client devise an effective financial risk management strategy. Financial risk analysis also involved examining changes in market variables, including interest rate and exchange rate fluctuations, as well as movements in market prices of securities and financial derivatives. Our experts also analyzed historical records to predict when the market fluctuations and disruptions were about to occur. This helped the client to create proactive and reactive methods that can prevent financial from impacting the security of the organization.
This highly focused approach helped the client to build strategic financial risk management strategies that minimized the probability of the problem occurring again. Furthermore, implementing risk management strategy reduced the loss in profit for the client. In a span of seven months, the financial risk analysis helped the company to successfully reduce their financial costs and achieve savings of US $3.2 million.
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What is Financial Risk Analysis?
Financial risk analysis is the process of evaluating and managing the potential risks in the market that negatively impacts the financial capital of the organization. Financial risk analysis helps organizations understand the potential risk factors affecting their business and implement strategies to reduce them. Also, analyzing financial risks gives an idea of the potential risks/events and the time needed to recover and restore operations. Having a robust financial risk analysis strategy allows businesses to prepare themselves financially for the most likely problems.