Explore the world of Risk Management careers. Learn about job openings, education, and certification. Discover the rewards and challenges of this dynamic field. Get started on your path today!
Do You Have What it Takes to Work in Risk Management?
| Fact | Description |
|---|---|
| Role Definition | You are responsible for finding, analyzing, and writing about risks. You must set up risk management processes and cut losses. |
| Educational Requirements | Usually, it requires a degree in risk management. This could be in business, finance, economics, science, engineering, or law. |
| Job Description | We will communicate risk policies. We will also develop risk models. And, we will assure effective controls. Plus, we will provide research and analytical support. |
| Salary | Salaries range from $85,812 to $126,675. The exact amount depends on experience, education, and location. |
| Outlook | The outlook is good. It’s due to the growing need for strong risk management. This is true across industries, especially amid economic uncertainty and events like COVID-19. |
| Industries Hiring | Sectors include banking, finance, technology, healthcare, and education, among others. |
| Career Levels | You can progress from support roles to leadership positions. For example, you can become a Chief Risk Officer or Director of Risk Management. |
| Skills and Experience | Skills include data analysis, industry knowledge, effective communication, agility, and leadership abilities. |
| Risk Assessment | You must quantify threats. You must assess their probabilities and criticality. You can use formulas like Risk = Threat x Probability x Criticality. |
| Industry Diversity | Careers span many fields: finance, insurance, healthcare, tech, real estate, and government. They offer a wide range of opportunities. |
Risk Management Career Overview: In finance, risk management means assessing and quantifying business risks. Then, it means taking measures to control or reduce them. Risk management is often part of compliance. But, it may also be part of specific business units. These units include securities trading desks or loan origination departments.
Find Job Openings: Use this tool to search current job openings in this field.
Education: To work in risk management, a bachelor’s degree is the bare minimum, and often an MBA also is required. You must have strong math skills. A background in management science and in making or using predictive models can help.
More and more, both undergrad and grad programs offer risk management courses. Some schools even offer risk management degrees.
Certification: There are several formal risk management certifications. More and more employers require them. They may help start or advance a career. But, most companies do not yet demand them. In any case, experience in law, accounting, compliance, insurance, and finance is key.
For example, risk managers oversee securities trading. They should know trading practices and procedures well. You gain this knowledge best from experience. You need to have been a trader or trading desk assistant.
Duties and Responsibilities: Risk management is about finding and measuring the risks faced by the firm. Risk managers may be generalists who cover many areas. Or, they may be specialists who focus on just one. In the financial services industry, the major risks include. But, they are not limited to:
- Defaults on loans extended by the firm
- Losses on securities inventories held by traders
- Losses on investment securities held for the firm’s own account
- Counter party risk (another financial firm failing in its obligations to yours)
Risk management personnel make, put in place, and enforce rules and procedures. They are designed to lower these risks. For example, the value of inventory held by a securities trader might be strictly limited.
Risk management personnel also use financial instruments and contracts. They use these to control risks. Examples include:
- Insurance
- Swaps
- Derivatives
- Futures contracts
- Options contracts
Data breaches and identity theft are growing problems. They affect all industries, not just financial services. The potential exposures, from both monetary and reputational perspectives, are increasing exponentially.
The best risk management departments and professionals take active roles. They set policy on data security. They work closely with their firms’ IT groups.
Typical Schedule: The time commitment is highly variable, dependent on the firm and the position. Risk management is vital. Risk managers can expect to work much more than 40 hours. Also, in turbulent markets, risk managers may be on call a lot.
What’s to Like: Risk management is a crucial function, and thus has a great deal of intrinsic job satisfaction. Additionally, positions in this field are well-paid and well-respected. The work can be fast-paced and stimulating.
What’s Not to Like: Working in such a critical field has a downside. The job is demanding. It can become too much during tough times for the industry or the firm. Weighty decisions may have to be made on a moment’s notice.
Also, the “policeman” aspect of risk management can create an adversarial relationship. It’s unpleasant for some kinds of producers, especially securities traders. Also, powerful people in the firm, like executives, are likely to resist playing by the rules.
Salary Range: The BLS combines risk managers with other financial managers. Follow the latter link for details on pay. In finance, though, risk managers’ pay is often much higher. It’s higher than the average for financial managers.
Other Related Categories: You may want to browse our many articles on these other parts of financial careers:
- Financial Career and Job Profiles
- Leading Employers in Finance
- Education, Training and Certifications for Financial Careers
- How to Manage Your Career
- Pay for Financial Jobs
For More Information on Risk Management: Follow the links below for more detail on jobs that relate to risk management. These jobs also interact with risk management. They include especially useful background knowledge.
