Risk Analyst
Risk Analysts monitor and evaluate risks posed to an organization and develop strategies to mitigate them.
What does a Risk Analyst do?
Businesses employ Risk Analysts in activities aimed at reducing the likelihood of negative effects from a variety of sources, including event risks like natural disasters, operational risks like fraud, and financial risks like credit and interest rate risks.
Risk Analysts support the technical side of an organization's holistic risk management approach. Once risk data has been compiled and evaluated, analysts share their findings with Risk Managers who use those insights to develop and implement possible solutions.
Key skills
- Analytical
- Mathematical
- Communication
- Curiosity
Becoming a Risk Analyst
Qualifications
Most Risk Analyst positions require at least a bachelor’s degree in finance, statistics, economics, mathematics or related areas. You may consider pursuing a professional certification to specialize in this field and to expand your career opportunities.
Financial Risk Manager (FRM)
Offered by the Global Association of Risk Professionals (GARP), ithe FRM Certification focuses 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 you have completed at least two years of work in the field.
CFA® Charter
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. Risk management is integrated into the CFA Program curriculum across all three levels. 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 suitable for you.
Who hires Risk Analysts?
In the finance industry, Risk Analysts are typically employed by:
- Investment banks
- Insurance companies
- Organizations responsible for large sums of money like hedge funds and investment firms
Check out a typical job description
Key responsibilities of Risk Analysts include:
- Analyzing and interpreting risk-related data using risk information management software (RIMS)
- Quantifying the potential negative effects of risk-related activities
- Identifying practices within the organization that contribute to increased financial risk
- Compiling reports, summaries, and presentations to communicate findings to key stakeholders within the business
- Collaborating with risk managers on reporting and evaluation techniques to support the ongoing collection and interpretation of risk management data
Now let’s talk career progression
Where this role could take you
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.
Your future
Risk Analysts and managers work together as 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 as an investment company or bank will often draw from internal employees who not only understand risk management but also have a strong knowledge of the organization.
The right role for you?
Risk Analyst career paths will appeal to organized people who enjoy tracking economic conditions and investment trends, as well as working with financial data. It involves evaluating complex data sets to support sound business decisions under uncertainty.
Financial risk analysis is a constantly changing field that benefits from new technological tools, so this path might also be attractive if you’re naturally curious and have a passion for learning.
It’s important to bear in mind that life as a Risk Analyst can be challenging, as risk management is filled with 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.
Find your fit in finance
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