Behavioral Risk Management


Definition: Behavioral Risk Management is a complimentary approach to the reactive, legal, and numbers-oriented compliance and risk management approach taken by various regulators following the 2008 financial crisis. It is a more pro-active, preventive and psychological approach to avoid misconduct by employees (and the company they work in). It involves identifying behavioral drivers and addressing these drivers and employee behavior by making changes or using nudges in processes or in organizational contexts. It is based on the assumption that people do not always act rationally.


More on risk management: Credit Risk Management, Operational Risk Management, Risk Appetite, Risk Management.


MBA Brief offers accurate and concise definitions of MBA concepts, frameworks, methods and models.

We love to keep things really short, but provide links to learn more about your subject and to similar concepts.

© 2023 MBA Brief - Last updated: 6-2-2023  -  Privacy   |   Terms