What exactly does a risk analyst do? In the day-to-day, a risk analyst's job looks much like that of a financial data analyst but with a focus on understanding potential risk. Life as a risk analyst can be challenging, as risk management is filled with inherently difficult decisions, and risk-related data does not always entail straightforward solutions. Nevertheless, this career offers the opportunity to make a direct impact on an organization's success. Risk analysts get the chance to collaborate across the organization to make important business decisions.

While a financial risk analyst compiles and evaluates data, managers apply the analysts' findings on the level of risk involved to make decisions and create strategies. Risk managers develop plans to minimize and mitigate negative financial outcomes through a combination of project management and proposal development.

Some of the areas of risk in which financial risk managers may specialize include:

• Credit Risk
• Transaction Fraud Risk
• Liquidity Risk
• Tradeable Risk
• Interest Rate Risk
• Market & Price Risk

More so than risk analysts, risk managers are experts on the regulatory and compliance standards in the financial field and draw on years of experience navigating risk-related scenarios. While risk analysts provide data that can help risk managers explore all possible solutions to minimize risk, risk managers have a greater degree of responsibility and accountability in how an organization moves forward with a risk management strategy.

Risk analysts and managers work together as a part of a holistic risk management team within an organization. Risk manager roles typically require five-to-ten years of professional experience in the risk management field, so this path is more difficult to break into with an unrelated background or without an advanced degree. There is strong promotion potential into the manager level if you are a seasoned risk analyst since an investment company or bank will often draw from internal employees who cannot only understand risk management but also have a strong knowledge of the organization.

Entry-level risk management employees are unlikely to need a professional certification to get their start in the field, but it is a great idea to consider credentialing options early to plan your professional development goals and open up career opportunities.

GARP offers a risk management credential called the FRM Certification, which focuses solely on demonstrating expertise in risk management best practices. While anyone can register for the exam, it cannot be awarded until both tests in the in-depth two-part exam have been passed, and the individual has completed two years of work in the field.

In contrast, the CFA charter is a broader credential that can apply to a range of financial careers, especially those that touch on portfolio and asset management. If you are interested in a more versatile finance career path that touches on both risk management and other investing concepts, the CFA charter may be more aligned with your needs.

Interested in exploring other financial services careers beyond risk analysis and risk management? Explore more role descriptions, including:

• Research Analyst
• Data Scientist
• Portfolio Manager
• Private Equity
• Financial Analyst