Deregulation of the markets, increasing global competition, growing complexity and rapid development in information technologies are the main drivers of change in our business environment. Organisations need to respond to these ever-changing business conditions by establishing a pro-active, systematic and holistic risk management strategy.

Risk management has therefore become a central part of all business processes with the aim to identify, evaluate, manage and control risk.

In this context, risk is a negative deviation from an expected variable which represents a danger of potential loss or loss of profit due to internal or external factors. In general, risk management distinguishes between quantifiable and unquantifiable risks. In order to manage and limit risks, it is essential to identify all substantial risks and risk drivers, for independent measurement and evaluation considering the changing macro-economic, portfolio-specific and legal conditions. If these considerations are taken into account an effective risk and profit-oriented management aligned with a framework for a future-oriented risk strategy can be established.

Do they know your risks?
The goal of identifying and evaluating risk within the risk analysis is the creation of a risk inventory or a risk map. A risk inventory contains a list of risks together with a classification of all risks and detailed data focusing on the probabilities of a loss as well as the potential financial impact.

Risk identification begins with the assessment of all risks affecting corporate goals in order to develop a company specific risk tree. Bear in mind: A risk which has not been identified cannot be managed!

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