Secondly, there is a definite cost in carrying out financial risk management. Indeed, the cost of supporting risk management can be quite high. In terms of resources allocation, this reduces the amount of investment in other areas, which may offer a higher return. To every company, developing risk management software is very costly, not to mention maintenance and updating cost, especially when financial situation always changes. Requirement in capital is particularly a problem for middle and small firms. Sometimes, it is even true that the outcome of financial risk …show more content…
Financial risk management is a professional job, even if educated workers are provided, the software can be very difficult to understand and operate. Extra time and resources for training can be a burden. Some interfaces can be very complex, with tools that employees are not used to. Training reduces the time available for implementation of financial decisions. In addition, the time required for complete risk management is an obstacle to firms’ swift actions. There are usually months of suspension to any decisions before their actual implementation. Therefore, financial risk management can be a very inconvenient procedure for