Learning from his father and grandfather, Julio M. Herrera Velutini joined the world of finance while still young, rising to become the chairman of an international bank based in Puerto Rico. Focused on long-term growth, Julio Herrera Velutini prepares his bank for volatile economic times through risk analysis.

Every business operates at some level of risk. When a risk becomes a reality, the consequences are often brutal financially. This is why risk analysis is so important. 

Risk analysis is the process by which businesses identify the risks they face and the probability of those risks occurring. The actual process is conducted by risk analysts. The analysts start by identifying all likely threats a business is exposed to. For example, a global bank is exposed to currency risk if it has made investments in foreign countries, and retailers face the risk of reduced revenues in the event of an economic slowdown. 

Next, these risks are weighted against a probability function to determine their likelihood of occurring. Afterward, analysts attempt to identify the negative impact the company would face if each one of the negative events were to happen. While no one can predict the future, risk analysis gives businesses a chance to pre-empt negative events and implement strategies to mitigate their impact.