Risk Advisory in Uncertain Markets

Markets today are not just volatile—they are structurally uncertain.

Geopolitical conflicts disrupt trade routes, cyberattacks destabilise digital systems, and trade or monetary policy shifts ripple through economies. Increasingly, risks arise from outside traditional financial models. For finance professionals—especially those early in their careers—risk advisory has evolved into a strategic discipline central to decision-making.

From Traditional Risk Management to a Broader Toolkit

Historically, risk management focused on credit exposures, market fluctuations, and operational mishaps. Today, that toolkit is expanding to cover:

• Geopolitical and macro shocks: Wars, sanctions, and policy changes now impact entire asset classes.
• Climate and ESG risks: Regulation and climate events increasingly shape capital allocation.
• Cyber and digital risks: A single cyber incident can paralyse payment systems and erode trust.
• Information-driven volatility: Retail sentiment and misinformation on digital platforms can trigger sharp market swings.

The World Economic Forum’s Global Risks Report 2025 highlights this shift: risks once considered “external” are now central to financial stability.

Risk Advisory: Beyond Compliance

In uncertain markets, risk advisory isn’t only about avoiding losses—it’s about building resilience and competitiveness.

Well-designed risk frameworks provide three key advantages:

• Capital preservation: Early detection of vulnerabilities protects balance sheets when volatility spikes.
• Strategic agility: Scenario analysis helps leaders prepare instead of reacting in panic.
• Stakeholder confidence: Transparent governance enhances credibility with regulators, investors, and clients.

Risk management should never be reduced to “box-ticking.” In reality, risk advisory roles demand judgment—knowing when to hedge, when to absorb volatility, and, occasionally, how to turn risk into opportunity.

Tools and Frameworks for the Next Generation

Risk advisory is increasingly data-driven, but insight still depends on the skill of professionals interpreting those tools.

Key innovations include:

• Enterprise Risk Management (ERM): Linking financial, operational, and reputational risks to capital allocation.
• Scenario analysis and stress testing: Simulating extreme but plausible shocks, from interest-rate spikes to cyber intrusions.
• AI and predictive analytics: Detecting anomalies, flagging liquidity stress, and generating early warning signals.
• Climate risk modelling: Stress-testing portfolios against both physical (storms, floods) and transition (carbon regulation) risks.

These tools require balance: quantitative precision is important, but practical interpretation is what drives effective decisions.

Career Pathways in Risk Advisory

Demand for risk specialists is growing across sectors:

• Markets, Investment Banking, Asset & Wealth Management: Risk experts design hedging strategies and ensure deal resilience in volatile markets.
• Consulting & Advisory Firms: Advise corporates and sovereigns on enterprise resilience.
• Fintech & Regtech: Seek professionals who combine technical literacy with financial insight.
• Regulators & Central Banks: Recruit specialists to monitor systemic vulnerabilities and design policy responses.

According to a recent CFA Institute survey, professionals with quantitative risk expertise—blending finance and technology—are especially in demand.

Skills That Differentiate

Technical knowledge is necessary but not enough. The strongest risk advisors combine:

• Analytical depth: Proficiency in modelling, probability, and stress testing.
• Technology fluency: Skills in Python, R, and visualisation tools, plus familiarity with AI-driven platforms.
• Advisory capability: Translating complex data into clear recommendations.
• Global awareness: Understanding regulatory differences and geopolitical linkages.
• Ethical judgment: Building trust by ensuring decisions prioritise long-term resilience.

Ultimately, risk advisory is as much about communication and credibility as analytics.

Turning Uncertainty into Advantage

Uncertainty isn’t going away—it’s the new baseline. For those starting careers in finance, the key is recognising that volatility isn’t always a threat; it can also be an opportunity.

• Climate Risk: Asset managers using climate stress tests aren’t just reducing downside—they’re preparing early for the transition to green finance.
• Cyber Risk: Banks factoring cyber threats into credit decisions not only avoid systemic shocks but also find opportunities in financing cybersecurity growth.

The lesson: treat risk as something to be understood, not just avoided, and opportunities will emerge.

Conclusion

Uncertainty is now the norm, not the exception. That makes risk advisory a frontline discipline, shaping strategy rather than sitting in the background.

For students and young professionals, success demands more than technical skill—it requires both judgment and the ability to turn analysis into actionable advice.

The takeaway is simple: risk advisory isn’t about predicting the future—it’s about being ready for it. Those who guide firms through uncertainty will drive both resilience and growth, placing themselves at the heart of modern finance.

About the author:
Mr Saurabh Saraswat is the Deputy Dean of the Master of Applied Finance and Wealth Management (MFWM) program at SP Jain Global, and a visiting professor of finance at IIM Udaipur. He is also a fund manager at INQUANT, a hedge fund focused on generating alpha via quantitative and systematic methods. In the past, Mr Saraswat has worked as a senior banker at BNP Paribas, Standard Chartered and Citi. 

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