Names: Eliot Aradukunda Umugwaneza

Code: BBM/2021/85537

BAF2206: PRINCIPLES OF RISK MANAGEMENT AND INSURANCE

CAT

Discuss how enterprise risk management has revolutionized e-commerce today

(30 Marks)

First and foremost, Risk management involves identifying, analyzing, and taking steps
to reduce or eliminate the exposures to loss faced by an organization or individual. On
the other hand, E-commerce involves the buying and selling of goods and services over
an electronic network. Enterprise risk management has revolutionized e-commerce by
providing awareness to the organization’s risk, it makes e-commerce operations more
effective and efficient, and it ensures that there is a clear framework for managing all
the risks.

Enterprise Risk Management has revolutionized e-commerce by providing a greater

awareness of your enterprise’s risks and enhances your ability to respond. That is to
say, Enterprise Risk Management gives you insights into all possible risks in your
organization, including financial, reporting, compliance, and operational risks. Such risk
awareness can dramatically improve your ability to mitigate threats. 

Additionally, it makes your business operations more efficient and effective: The
Enterprise Risk Management approach manages risks as an interconnected portfolio.
This is done by evaluating threats which makes business operations more efficient and
effective in a way that other system risk management programs cannot. 

Furthermore, Enterprise risk management ensures that there is a clear framework for
managing all the risks. It improves your ability to comply with legal and regulatory
requirements because Enterprise Risk Management is an organization-wide risk
management approach; it gives sufficient data to demonstrate that all threats are
managed effectively. This reduces the chances of not complying with industry
regulations.

In a nutshell, Enterprise risk management is a combination of credit risk, interest rate

risk or asset liability management, market risk, and operational risk. It has revolutionized
e-commerce by mitigating threats to avoid business disruptions, which saves you
money. It also allows you to compare risks against opportunities, ensuring you take
advantage of profitable business opportunities.