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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