ERM Glossary: Risk system
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A (software) risk system can be
conceptually differentiated from a risk model. A
risk system is then a practical software tool (within which is embedded one or
more risk models) that can be used to calculate risk statistics or do other
related tasks, e.g. risk-reward optimisation. The underlying risk model defines
what answers the risk system will deliver, even if ease of use, cost and run
times are also key elements that firms will consider when deciding which risk
systems to buy.
Alternatively, if the term is
being used in a governance context it would relate to the systems and processes
a firm uses to manage its risks.
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