Applications: Financial Risk and Financial Risk Management Technology (Rmt): Issues and Advances
16 Pages Posted: 15 Oct 2008
Date Written: 1993
Methods for sound risk management are of increasinginterest among Wall Street investment banking and brokeragefirms in the aftermath of the October 1987 crash of the stockmarket. As the knowledge of advanced technology applicationsin risk management increases, financial firms are findinginnovative ways to use them practically, in order to insulatethemselves. The recent development in models, the softwareand hardware, and the market data to track risk are allconsidered advances in Risk Management Technology (RMT). -.These advances have affected all three stages of risk management: the identification, the measurement, and the formulation of strategies to control financial risk. This article discussesthe advances made in five areas of RMT: communicationsoftware, object-oriented programming, parallel processing, neural nets and artificial intelligence. Systems based on any of these areas may be used to add value to the business ofa firm. A business value linkage analysis shows how the utilityof advanced systems can be measured to justify their costs.
Keywords: Risk management, Object-oriented, Neural nets, Artificial intelligence, Business value, Clientserver, Distributed database, Parallel processing, Pattern recognition, Data quality
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