2022 has proved to be a pivotal year for many middle-market companies from an economic and financial standpoint; as growth slows, a new set of advanced financial risks becomes more prevalent. With these challenges in mind, many companies will have to take key decisions on how to adjust running operations to a rapidly evolving and dynamic business environment.

Along with these economic challenges, the risks to the middle-market organization are evolving constantly. Companies are feeling a significant amount of pressure from several directions; from political tensions, technology threats to new compliance and data privacy demands.

Trends of Advanced Financial Risk Management in 2022

In particular, the following are the three most prevalent advanced financial trends that you should address and analyze to help better the position of your company in 2022:

• Volatility and Global Supply Chain

The global climate is changing rapidly, as the world is inarguably in a more volatile state now compared to any time in the past decade. Majority of middle-market companies are showing interest in overseas operations, and disintegrating international alliances, traffic & cyber wars, terrorism, and the rise in the number of natural disasters. All these factors are threatening the global trade network.

Potential Impacts Include:

• Loss of global supply
• Increase financial exposure
• Disruption in transportation
• Loss of margin

To help subdue these financial risks to the global supply chain, you should first review your advanced financial strategies, identify potential disruptions and examine all alternate solutions. Leading organizations are planning and identifying situations in order to test their response to the developed strategies and creating backup plans, just in case. In addition, implementing key advanced financial risk indicators for threats and weaknesses, building dashboards and software that can highlight early signs of threats before they become major issues.

• Cloud Risk and Compliance

Many companies are considering shifting to, or have shifted business processes to the cloud; managing cloud risks and compliance is not always a top priority during the transition.

Potential repercussions of not complying with this type of advanced financial risks:

• Unintentional disclosure of important information
• Increased costs
• Regulatory penalties

In order to address this risk, management must start upfront with the development of a cloud solution with a compliance and risk mindset in order to decrease exposure and increase effectiveness.

Use of Big Data and Analytics

The trend of utilizing large sets of data for financial risk management will probably continue forever. The reason is that this is the only technology with the power to expose hidden risks. Of course, raw data alone is virtually useless, but, coupled with powerful analytics engines, it enables financial institutions to identify risk factors and take corrective measures.

Summing Up

In an increasingly volatile and dynamic political and advanced financial risk environment, preparation is key. Apart from addressing these emerging threats, advanced financial risk management courses can help you fix vulnerabilities and improve the decision-making process, and ultimately develop a comprehensive and proactive risk strategy. Advanced financial risk management courses or a risk management certification help you get ready for what’s ahead.