Analysing the Importance of Risk Management in the Financial Industry

Abstract

This article explores the centrality of risk management in the financial sector and gives a comprehensive framework for evaluating the numerous dimensions and components of the business. Due to its critical position in most economies, the financial industry requires careful attention to risk management in order to maintain stability and safeguard financial institutions. Through its research into risk identification, assessment, mitigation, and monitoring, this framework highlights the interconnectedness of risks and their crucial role in preventing disasters. By analysing these components and showing how effective risk management protects financial institutions, this article shows how effective risk management not only contributes to the overall health of the financial system, but also protects financial organisations.