The digital nature of banking and investment transactions today means that risk managers (or risk strategists, as they are sometimes called) must possess fluency in technological systems that facilitate investment and trading. In addition to managing financial risk, a risk manager must identify and account for potential systemic threats. In other words, risk management involves a determination as to the risk level of certain loans and trades, as well as an analysis of potentially risky online and offline systems that allow those loans and trades to go through.
When working in international markets, the role of a risk manager becomes even more complex, as factors such as political instability, inflation, currency fluctuation, famine, and drought enter the picture and influence the viability of various financial transactions. Juggling these risks requires sound and far-reaching knowledge. Technological advances mean that risk managers may depend upon software to help them, but human instinct will likely always be a big part of the job.
About Rao Chalasani: A former Chief Financial Officer and Risk Strategist for Merrill Lynch and Bank of America-Merrill Lynch, Rao Chalasani has focused on global markets and credit, real estate, and structured products. Rao Chalasani is the sole designer and creator of the scalable “Enterprise Risk Management System,” for which a patent is pending.