A risk mitigation strategy is implemented in order to reduce the chances of a certain risk to occur or the strategy tries to reduce the impact of the risk it if does occur (“Reducing Risk Through,” 2009). We all know that risks can arise within a company at any time, so the company needs to be prepared to handle the risks before it affects success of the company. Risk mitigation strategies help you identify and analyze the risk in order to determine how to best alleviate the effects of the particular risk. This strategy also allows the management team rate the risks based of the threat level presented to the company. Within a banking institution, there are certain risks that can be avoided while other risks just have to be managed. The
…show more content…
The internal risk can arise from problems with human resources, technology, or physical damage. Whether it be a high turnover rate, a new computer system that the older employee do not understand, or a bank having to relocate all these problems are internal factors that can affect the profitability and success of the bank. On the other hand, external risk factors can affect the banking institution in a negative manner as well. External factors could be changes in the economy or a natural disaster. A mitigation strategy for these internal and external risk will be more of a challenge for a banking institution to implement. I believe that a bank should consider all possible risks associated with these factors and rate them in order of most sever to less sever in relation to the success of the business. Then, the bank should generate and research policies that would address each issue and come up with a plan before these risks occur. A disaster plan and emergency procedures should be in place in case of a natural disaster in hopes that everyone will understand how to respond to the situation and keep the bank operating as efficiently as possible. Therefore, these general risk would require a lot of planning and training by all employee of the bank in order to reduce the effects of these internal and external
The internal risk can arise from problems with human resources, technology, or physical damage. Whether it be a high turnover rate, a new computer system that the older employee do not understand, or a bank having to relocate all these problems are internal factors that can affect the profitability and success of the bank. On the other hand, external risk factors can affect the banking institution in a negative manner as well. External factors could be changes in the economy or a natural disaster. A mitigation strategy for these internal and external risk will be more of a challenge for a banking institution to implement. I believe that a bank should consider all possible risks associated with these factors and rate them in order of most sever to less sever in relation to the success of the business. Then, the bank should generate and research policies that would address each issue and come up with a plan before these risks occur. A disaster plan and emergency procedures should be in place in case of a natural disaster in hopes that everyone will understand how to respond to the situation and keep the bank operating as efficiently as possible. Therefore, these general risk would require a lot of planning and training by all employee of the bank in order to reduce the effects of these internal and external