insurance and risk management

The Risks of Bankers and Financial Institutions

The Risks of Bankers and Financial Institutions Many who seek a career in the finance industry have hopes of establishing a secure financial future. However, those working in banking or the finance industry have several risks. Carrying financial institution insurance is one way to address the monetary risks that are involved when a claim is filed against an organization. The information found at lists banks as highly vulnerable to cybersecurity threats, government regulation, and employee theft. There are two different categories of bank risk, one being a systemic risk and experienced by the entire system, while the other is a bank-specific risk. These could include:
  • Market risk
  • Credit risk
  • Business risk
  • Liquidity risk
  • Operational risk
While banks and other financial institutions can carry comprehensive insurance policies that address the fallout of incidents or losses that may occur, most organizations use a strong risk management plan to help reduce their exposure. There are rules, processes, and systems established at both the bank level and government level. All banks follow these systems or processes, which are usually very difficult to get around. Risk Management Help Some insurance providers offer their clients help with risk management assessment and strategies. As an insurance company assumes the risk of the client when opening an account, it is in the best interest of all involved to have both comprehensive management and insurance plan in place to safeguard against potential exposures.

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