Challenges Facing The Organizational Business Economy And Management With Companies From The Financial Services Industry

Effective planning & execution of risk assessment procedure in all financial & operating sectors to identify potential risk to organization.

As time has shown, financial institutions undertake an abundance of uncertainty causing unpredictable risk consequences. As a result, executives instill risk management programs to assist in managing the organizations risks so they align with the company’s goals. Commonly sought goals include legal and regulatory compliance, tolerable uncertainty, survival, business continuity, earnings stability, profitability and growth, social responsibility and economy of risk management operations. Through the implementations of goal oriented programs, an organization can effectively minimize risk uncertainty. All organizations including financial institutions encounter risks from each risk

For the small community bank, every action involves an amount of risk. A risk management program, which identifies, analyzes, treats, and monitors risks, is necessary for the bank’s operations. Mitigation strategies are implemented against potential losses or a bank failure. The executive in charge of developing and integrating the program is the Chief Risk Officer (CRO). The risk management program for the community bank addresses ten risks associated with Enterprise Risk Management (ERM) or traditional risk management processes, while attaining risk management goals.

A holistic view of risks is crucial for business profitability and this can be achieved through a process of frequent evaluation, training, monitoring and feedback sessions with key stakeholders (Chugh, 2016). This approach provides a framework for understanding the patterns and trends of potential risks and how they relate to the industry. A successful business should have efficient procedures, which include management and financial reporting systems. There many examples of organizations which have successfully managed their risks and turned the opportunities into concrete returns for the shareholders.

For this pre-crisis intelligence project, I examined JPMorgan Chase and the banking and financial services industry to identify warning signs of crises that could seriously impact its business. The banking industry is bouncing back after the financial crisis of 2007-2008. However, recent drop in oil prices, developments in the Chinese economy, and promises made by a presidential candidate, are all key potential risk factors for JPMorgan Chase.

The 2007-2008 financial crisis is seen as one of the biggest failure of risk management. This is the reason why it has been described it as a credit tsunami.

Previously, the company had a much compartmentalised approach to risk management, with individual departments managing individual risks pertaining to them. For instance, currency risks were hedged using futures contracts and under the supervision of the Financial Risk Management Unit while traditional (hazard) risks were insured by its treasury – Insurance Risk Management Unit. However, this individualistic approach

Previously, the company had a much compartmentalised approach to risk management, with individual departments managing individual risks pertaining to them. For instance, currency risks were hedged using futures contracts and under the supervision of the Financial Risk Management Unit while traditional (hazard) risks were insured by its treasury – Insurance Risk Management Unit. However, this individualistic approach

Risk and risk management are becoming an intrinsic part of all projects of crisis management, in both the private and the public sector (Bhimani, 2009; McConnel and Drennan, 2006). Risk management is becoming part of

The instances of dangerous type of risk taking according to the standards of SEC and/or CFTC can be anticipated in troubled banks. Bruche and Lobet (2011) and Diamond and Rajan (2011) claim that

Assess, adapt and overcome has been the strategic game plan for financial institutions during the historical economic, regulatory and cybercrime roller coaster. Unfortunately, the strategy has been mostly defensive due to historically low interest rates, high unemployment, poor performance in Gross Domestic Product (GDP) growth, heavy regulatory burden and increased risk in cybercrime activity. The roller coaster has caused uncertainty and distrust among consumers and has contributed to the increase of failed banks across the country. However, the United States is on a slow path to recovery adding optimism for offensive strategic planning for the future.

Like any other bank, Citi deals with many risks faced by financial industry in its day to day operations. The risks to which Citi Bank is particularly exposed in its day to day operations are: credit, market (interest rate, foreign exchange, equity and commodities risk), liquidity, systematic, operational, and Business risk. (We will discuss credit and market risk in details as part of this paper).

The structure of financial and business organizations have evolved over time, and the subject of remuneration of CEO’s has become a debate across society particularly during the global financial crisis. With the current economic situation, the debate over CEO pay has further intensified with more people questioning whether CEO salaries commensurate with their overall contribution to the value and overall success of the organization. A chief executive officer is a person within an organization’s senior management group who is employed at a corporate level (Perkins). It cannot be denied that CEOs have a great amount of influence over their company and are responsible for defining and executing a company’s strategy. Through their actions CEOs

Risk related to events even before the War on Terror began, the Sept. 11, attacks dealt a harsh blow to America financial standing (DePietro, 2017).sintressing the future role in which finance leadership is evolving. Equally alarming this crisis that influences an organization's decision-making, based on significant external and uncontrollable factors. Some of these aspects that remained obtainable in this discussed involve the economic factors, legal, political, and social conditions technological changes. The change of Interest rates in

In the highly competitive global environment, organizations are facing more uncertainties and risks that any organization should pay more attention to risk management. According to an effective governance, organizations can take opportunities successfully, and a good risk management can be the fundamental security for effective governance. (reference1)