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As the field of finance grows and continues to get complex day by day, the risk involved also increases exponentially. With the increase in risk, there has been a steady demand for folks with financial risk management skills.

What is Financial Risk Management, and Why is it Important?

Financial risk management is simply a process that entails identifying the risks and the end goal is to reduce or mitigate the risk to the maximum extent possible. It is done by making investment decisions bearing in mind the financial troubles the business is under. With these investments, a finance professional seeks to hedge against the risk which was identified at an earlier stage.

It is essential to manage financial risks simply because they exist and can prove detrimental to the growth and survival of any entity if the situation takes an unfavorable turn. Hence, failure to adequately manage these risks can cause harm to the entity at large, and thus there is an increased demand for people with the required skills for mitigating financial risks.

Types of Financial Risks

Financial risks exist of multiple types and sorts depending upon their nature. Following are some main buckets they are typically classified into.

Market Risk

Since financial securities are tradeable, they have a value that isn’t fixed but rather fluctuates based on demand and supply. This volatility or price change can work both ways for any entity. Hence it poses a substantial risk depending upon the exposure. As a finance manager, it is the task to mitigate those risks, usually by hedging against the current exposure.

Hedging involves taking positions against the pre-existing ones in case the trade goes. Otherwise, a finance manager can recover some of it via the hedged position. Market risk is common for companies involved in international business and transacting in foreign exchange. These entities are at constant risk of change in the value of FX. A successful finance manager will hedge these risks accordingly.

Credit Risk

Most businesses involve some or the other form of credit. Especially with financial institutions where the company is based on lending activities, it becomes the principal risk. To put it simply, credit risk is the risk of the borrower not being able to repay the amount, which is called serving the obligation in the banking industry. Depending upon the borrower’s profile and the credit deal’s characteristics, you must assess these risks. Once assessed, they can also be hedged for via financial securities like Credit Default Swap (CDS).

Liquidity Risk

Liquidity means the ability to convert an asset into cash. Cash balances and bank accounts are considered to be the most liquid assets simply because of their readiness in terms of usage. However, liquidity can be a problem with certain assets, especially fixed ones. At times assets of higher value do not get sold readily as there might be a gap in demand and supply, in the absence of buyers, an asset cannot be converted into cash and hence causes an inability to transact. A finance manager takes into account the liquidity risk and tries to maintain a balance of liquid assets such that it does not impact the overall operations of an entity.

How Can Our Financial Services And Capital Markets Help?

The course for the advanced management program in financial services and capital markets, provided by Imarticus learning and certified by IIM Lucknow, is a 6 months course of 126 hours with curated modules focusing on different aspects of financial services. The program covers financial risk and compliance and includes modules on investment banking and capital markets. A part of the course is carried out in person at the prestigious campus of IIM Lucknow! Where you can visit the campus and get to meet your peers as well as faculty while you learn live from them.

The course offers an immense opportunity to network among peers with similar interests and finance-related work experience. Such networking will allow you to create a holistic and global perspective as you interact with people from diverse backgrounds in financial services. This course offers perfect financial risk management training for financial enthusiasts looking to upskill themselves.

Conclusion

Financial risk is imminent and will exist as long as finance exists. Even when there are multiple types of financial risks involved, a finance manager’s job is to mitigate them as much as possible. With Imarticus learning, you can level up your financial risk management skills and get a certificate from IIM Lucknow!

Are you looking for professional advice on finance career options? Feel free to contact us through chat support or visit our nearest training centers in Mumbai, Thane, Pune, Chennai, Bengaluru, Delhi, Gurgaon, or Ahmedabad.

What is Data Analytics?

Data Analytics is defined as the process of analysing data sets to find new trends and draw conclusions about the information they contain.

Initiatives including data analytics can support a company’s attempts to boost customer service, optimise marketing campaigns, and generate revenue. Analytics also allows companies to respond quickly to changing market trends and gain an advantage over competitors. But improving corporate performance is data analytics’ ultimate objective.

Depending on the particular application, data may be analysed from new information that was processed for real-time analytics or from historical records. It might also originate from internal systems and from outside sources.

Data analytics analyses data sets to identify emerging trends and make inferences about the information they contain.

Initiatives including data analytics can support a company’s attempts to boost customer service, optimise marketing campaigns, and generate revenue. Analytics also gives companies the ability to respond quickly to changing market trends and gain an advantage over competitors. But improving corporate performance is data analytics’ ultimate objective.

Why Learn the Basics of Data Analytics with a Data Analytics Course?

Demand has increased by 400%

The need for Data Scientists has increased dramatically due to every organisation placing significant bets on data analytics to boost business value.

Lucrative salary

The average salary for Data Science roles is 10LPA+, according to Glassdoor.

Love for math and programming

Data Analytics course is a heady mix of math, statistics, and programming – it can’t get more cutting edge than this.

How can you pursue further information on data analytics?

You can work in one of the fastest-growing industries and one that is constantly evolving and seeking out fresh insights if you have a strong foundation in data analytics with a data analytics course.

If you are interested in studying data analytics, you can learn online and balance work and study.

Opportunities aren’t simply restricted to working for data science organisations. Jobs are now accessible in various sectors, including health, transportation, finance, entertainment, and construction, as demand for data science specialists has skyrocketed.

Why Imarticus?

You may have found yourself in uncharted territory because of how work changes. You might be expected to perform more tasks. A faster pace of work may be required of you. As a result, you may worry about your outdated skills. We can help you refresh current skills and embrace new ones, so you stay in demand.

Imarticus Learning is an expert in online training. We are constantly updating our programs to stay current with the latest trends and technologies so that you can learn at your own pace with the help of our expert trainers.

Over a decade, we have impacted over 10,00,000 careers through leading-edge curriculums, highly experienced faculty, and over 500 global partnerships with leading institutions and corporations. Imarticus Learning seeks to upskill existing and future workers to fulfil various industries’ current and upcoming job market demands.

Imarticus Learning has successfully helped thousands of students get into leading multinational companies and start-ups and has helped in the career transition of more than 45,000 students across the globe.

In the financial year 2021-2022, we have placed a record of 1841 students, which means “1 student was placed every 4.75 hours“.

8 out of 10 students of Imarticus Learning get placed in industry-leading firms like JP Morgan, KPMG, Morgan Stanley, Goldman Sachs, HSBC, BNP Paribas, etc.

We are associated with over 480 companies, including most of the Fortune 500 companies.

Start your learning journey in analytics with Imarticus. Our premier data analytics course will teach you about the latest developments in the data science industry and equip you with the practical and theoretical knowledge that an expert data scientist must possess.

Day: July 27, 2022