Risk is often operationally segregated into various silos, usually denoted as market risk, credit risk, operational risk, and interest rate risk with a resultant divergence of skills, techniques, culture and terminology.
We view risk more holistically, recognising that many so-called risk mitigation techniques are often merely ways of transferring risk – not transferring it out of the organisation, but only to another department or risk type.
This highlights the importance of context – no risk measure is inherently good or bad. A risk measure, whether standalone or as a contribution, is only truly meaningful when viewed in the context of information such as returns, capital, the time horizon, and the capability of the organisation to manage that risk.
Risk management consists of a number of processes which, when implemented correctly, drive the organisation towards more informed decision-making at every level. The processes involve ensuring that there are context, data, analysis, information, action and review in every aspect of risk management. These attitudes are embedded in the Riskworx culture and in how we serve our clients.