Risk is a common factor in many businesses. The business work with many options for the management of risk. Risk management has different levels. Some of the risks directly manage, others have to manage by other different management levels. Many times the company tries to manage the possible risks, calculate the potential impact of the risk on the company. The preparation plan will help to react to the advanced situation. There are many ways to classify financial risk. There are four types of risk for management.

1. Market risk:-

Market risk is the risk where there are always changing conditions for the specific market place.

2. Credit Risk:-

Credit Risk is the risks where credit is given difficult to recover or takes time to recover.

3. Liquidity Risk:-

The liquidity risk is associated with the cash flow.

4. Operational Risk:-

Operational risks are associated with the daily operations of the bank.

What are risk management tools?

Risk management  tools are uses to support the execution and implementation of the program. It is to calculate the outcome, strengths, and limitations of the risks. The risk management tool helps many to assess the risk effect.

What are the different risk management tools?

The types of risk management tools can be a frame in a different format. The following are the few types of risk management tools.

1. Strategic and capability of risk analysis:-

It is the process of identifying, prioritizing, and analyzing the risks to set the goal at the capability, objective, and achievements.

2. Risk Analysis:-

It is the process of analyzing, prioritizing, and identifying the impact on security. It uses to minimize the risk effect.

3. Investment and portfolio risk analysis:-

It is the process of identifying, analyzing, and prioritizing the investment with an alternative to the investment.

4. Risk management Program:-

It is the process of identifying, managing and eliminating the risks based on the objectives of the institute and the achievement of programs.

5. Risk Analysis by cost:-

It is the process of analyzing how can technical and economic risks can affect the cost of the system. It is the method to analyze the model. The Measure and management of the system.

Every area of the risk management tool is to support the objective at various levels of maturity and function. The tools aim to support the implementation and execution of risk management.

What are the different capabilities of risk management tools?

1. Risk strategy and Planning:-

It is used to analyze the risk hierarchy, risk assignment, responsibilities, and to automate the risk monitoring.

2. Identification of Risk:-

It is the process of identification of the relation between risks and scenarios. It is used to find the root cause of the problem.

3. Risk Analysis:-

It is used to find the quantities and qualitative analysis of the occurrence of the risks. It uses to finds the potential impact of the risks.

4. Risk Monitoring:-

The monitoring of risk is for the analysis of the risks.

How to Select the Right tool for risk management?

The right tool selection will depend on risk analyses and management. The tool used must support risk management. For the selection of risk management and analysis following criteria’s can consider

1. Addressing the Risk objective:-

It must support the analysis that a certain organization is trying to achieve. The institute may choose the different tools to address the issues faced by the institute.

2. Decision making:-

The risk management tool must assist us in decision making.

3. Accessibility:-

The tool accessibility will decide who access the risk management tool.

4. Availability of Data:-

The availability of data will uses for decisions.

5. Details of data:-

The details of the data available for the decision making in the system.

6. Integrity option:-

The integrity option will help to add data from the different projects will be helpful for the decision making of the system.

What are the different tools available for risk management?

The following are different tools available for risk management.

Commercial Tools:-

There are many commercial tools available for risk management. The government most commonly uses commercial tools for risk management.

Contract Tools:-

Many of the third-party contractors have prepared a tool for the risk assessment. It uses to support the effective risk management of the application.

Customized Tools:-

Many of the programs use customized tools like Microsoft Excel and access customized risk management tools. It is important while considering the customized tool for programs of support.


The risk management tools are uses to pre-identify the risks of the different norms, strategies to get out of the scenario. It uses to calculate the risk weight. The risk management tools are uses to identify the risk investment for the management of Risks. They are helping many businesses to manage the risk factors.




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BankReed Admin

Banking Professional with 16 Years of Experience. The idea to start this Blogging Site is to Create Awareness about the Banking and Financial Services.

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