Risk analytics software: should your RIA firm have one?
Some RIA firms that assemble their RIA tech stack may also choose to add something relatively new – risk analytics software – as part of their practice. As it helps assess and manage industry-specific risk, this software has recently become very useful also to financial firms and professionals.
Risk analytics software and the finance industry’s need for it came up during the rise of Big Data. This brought about enhanced computing and advanced analytics capabilities, so financial firms realized how well they could use large amounts of data to assess and manage risks.
Those without much experience with this fintech may ask, what is risk analytics software and how does it work? What are the best risk analytics software options for RIAs? InvestmentNews provides insight into these and other relevant questions about risk analytics software, so read on.
Risk analytics software is a specialized tool used in risk management. Some of these risk management tools may use artificial intelligence (AI) with advanced algorithms and statistical models to analyze and identify potential risks.
In financial institutions like RIAs, the software helps assess and mitigate risks of investments, then provide actionable insights. That way, RIAs can help their clients make informed decisions and optimize risk management strategies for their investments and investment portfolios.
According to Helen Yang, CEO and Founder of Andes Wealth Technologies, “there is a lot to risk [other] than risk tolerance. We have developed a 4D risk framework that encompasses risk tolerance, capacity, perception and composure.” Helen adds, “talking about risk, behavioral finance is a huge part of it, because managing risk is, to a large extent, managing
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