Financial Risk Management in the 21st Century

Abstract

In the rapidly evolving global economy, financial risk management has become an essential practice for organizations seeking to maintain profitability and sustainability. This research paper delves into the various aspects of financial risk management, focusing on the challenges and strategies for managing financial risks in the 21st century. With the advent of new technologies, increased market complexity, and greater interconnectedness of global financial systems, traditional methods of risk management must be adapted to address modern challenges. The paper examines key financial risks, including market risk, credit risk, operational risk, and systemic risk, while exploring the tools, models, and frameworks that organizations use to mitigate these risks. Special attention is given to the role of financial technology (FinTech), artificial intelligence (AI), big data analytics, and regulatory changes in shaping contemporary risk management practices.