Dissertation on Financial Risk Management: Royal Bank of Scotland

This dissertation explores the critical importance of financial risk management within the banking industry, using the Royal Bank of Scotland as a case study. It addresses key research questions related to defining financial risk, its impact on business performance, strategies for risk reduction, and the overall significance of risk management. The literature review examines the impact of financial risk on business stability, methods for reducing financial risk influence, the significance of risk management for banks, and key strategies for mitigating financial risks. The research methodology employs a qualitative approach, utilizing secondary data from journals, articles, and books to provide a comprehensive understanding of financial risk management principles and practices in the banking sector.

Dissertation & PHD Thesis
(Importance of Finance Risk Management)
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Contents...........................................................................................................................................2
Introduction......................................................................................................................................3
Literature Review............................................................................................................................3
Research Methodology....................................................................................................................5
REFERENCES................................................................................................................................6
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Introduction
Overview of Topic
In present time, there is a proper need of resolving the financial issues or risks that can
impact the overall performance of company. Companies are opting for financial risk
management in order to resolve the problems resulting with the above circumstances. It entails
plans, careful preparation and execution of new practises, as well as adopting those protocols to
resolve the financial meltdown problems that will arise in the immediate future.
Background of topic
Price volatility, market risk, commodity risk, credit risks, foreign exchange-related risks
and inflation rates are the most prevalent categories of consequences to which an organisation is
exposed. As when the industry is dynamic in existence, the magnitude of the hazard and whether
this is tolerable even by firm or not must be assessed by the business. This will be achieved by
measuring the financial risk rates, credit risk, the institution's return and savings, together with an
estimated loss forecast.
Research Aim
“To determine the importance of financial risk management in the banking industry”. A case
study on Royal Bank of Scotland.
Research Question
Q1. What are financial risk and how the impact business performance?
Q2. How influence of finance risk can be reduced in the context of banking company?
Q3. What are the importance of risk management?
Q4. Define the crucial strategies to lower the financial risks.
Research Objective
 To access the impact of financial risk over business stability.
 To determine the ways to reduce the influence of financial risk.
 To evaluate the significance of risk management for banks.
 To obtain the main strategies of reducing risk related to finance.
Literature Review To access the impact of financial risk over business stability.
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Risk being described as something that can cause challenges in the direction that those goals are
accomplished (Myhill, 2017). Based on the type of danger that occurs within a given case, that
may be because of both individual processes or external influences. Risk assessment, after it has
been established and understood, is one of the fundamental activities to be undertaken. The
future cash flows are closely connected to one another, which ensures that growing one will then
boost another and vice versa. But successful risk assessment contributes towards a more
equitable trade-off among risk and compensation in order to maintain a better role in the future. To determine the ways to reduce the influence of financial risk
Many financial threats may be defined either as systematic or non-systemic. Risk management
impacts a world industry and then all the firms inside it; damages due to a recession will be an
illustration of systematic risk (Rader, 2017). All those who differentiate between firms or sectors
are non-systematic threats. By proper planning, these risks can be minimised. Systematic
instability can be influenced by interest rates, conflicts, and economic contraction. Hedging will
hedge systematic danger. Since it refers to one organisation, non-systematic risk also is
recognized as "special risk."
Generally speaking, more and more chance manager takes along as part in their capital assets,
the more benefit will earn. To evaluate the significance of risk management for banks.
The application of artificial intelligence (AI) technologies in enterprise resource management
(ERM) emphasizes on non-regulated usage instances, like advance warning sign production, and
the study of what-if possibilities rather than existing accounting programmes (Tillyer, Wilcox
and Walter, 2020). A member of a major universal bank suggested using AI resources to create a
diverse and expansive library of tension and scenarios. Tens of thousands of forecast data
including millions of industry data points will then be scanned by the bank to find possible issues
of concern. In addition, improving the supply of staff and the feasibility of deferment and
turnaround cases and advice on substitute goods in times of recession is crucial in order to
increase organisational capability and maintain sustainability of the business. In order to build a
strategic edge in the industry, CROs are looking at enhancing risk & regulatory capability to
include expertise and real worth services, such as reviews and risk management advisory for
SME consumers, and protective steps such as enhancing customer data security from cyber
threats and money laundering.
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 To obtain the main strategies of reducing risk related to finance.
1. Test organisation practises for productivity.
2. Develop and subcontract your creativity where it sounds plausible.
3. Build a solid base for your HR tasks.
4. For any choice, use metrics.
5. Be ready to cover a deficit.
That might also sound unclear, but based on own particular financial circumstances and what
sort of company are launching, the sum has to lend. Just take out loans if manager really need to
and aim to keep this as small as want to, to will the financial risk (Wang and Degol, 2016). If
company can be financed without borrowing, it will be perfect for reducing bank financial risks.
To date, risk & regulatory organisations have reacted well to providing customer homogeneity
and organisational resilience, where FIs move beyond their conventional mandates, with value-
added customer experiences while constantly implementing new architecture trends. In areas
such as risk reduction, reputational risk control and early alerts for moving left, capacity elevates
are emerging as targets for a customer centred usage path approach to include customer security
and enablement.
Research Methodology
In order to complete the research regarding the importance of finance risk management
Secondary data have been collected from different sources such as Journals, articles and books.
Research approaches:
Qualitative method: It is contextual in essence that quantitative analysis and requires analysing
and focusing on, for example, beliefs, behaviours, opinions, the less observable facets of a
research subject. While it can be simple to open this form of study, the conclusions can also be
challenging to translate and portray; the results could also be questioned more quickly.
Basic Method: The primary objective is to simply enhance awareness, without any clear
applicable objective in mind only at beginning.
Inductive method: Inductive analysis moves to render or conclude large general ideologies from
individual circumstances.
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REFERENCES
Books and Journals
Myhill, A., 2017. Measuring domestic violence: Context is everything. Journal of Gender-Based
Violence.1(1). pp.33-44.
Rader, N., 2017. Fear of crime. In Oxford research encyclopedia of criminology and criminal
justice.
Tillyer, M. S., Wilcox, P. and Walter, R. J., 2020. Crime generators in context: examining ‘place
in neighborhood’propositions. Journal of Quantitative Criminology, pp.1-30.
Wang, M. T. and Degol, J. L., 2016. School climate: A review of the construct, measurement,
and impact on student outcomes. Educational Psychology Review. 28(2). pp.315-352.
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