The concept of risk management is an emerging issue in today's financial world. With risks becoming all the more difficult to quantify, the regulators are encouraging banks to take operational risks into account. And financial institutions are slowly starting to take a holistic approach toward risk management systems.

In the present context, the financial institutions are increasingly getting exposed to the various risks. Yet, many institutions are only just beginning to hold the ramifications of these risks that go beyond the perennial concerns of credit quality and market volatility risk. With risks becoming all the more difficult to quantify and regulators encouraging banks to take operational risks into account, financial institutions are slowly starting to take a more holistic approach toward risk management systems. Some companies are making fundamental changes to their management of risk and culture, with an objective of strategically integrating the risk management throughout their enterprise.

With the growing uncertainty and the increasing volatility of today's financial environment, the financial system is attempting to come up with new disciplines of risk management. As such, companies working with risk management have started to redefine their predefined goals and new innovative techniques including credit risk and market risk for dealing with uncertainty. In fact, the level of uncertainty has deepened and the spectrum of risks expanded to an elevated degree that has prompted the industry to undertake many reforms. Adapting risk management for today's high-stakes world involves the banishment of complacency and conflicts of interest, and the integration of cross-functional risk management techniques throughout the entire organization.

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