Risk Management Jobs

A very popular career choice within the financial services industry is risk management. This is the field of making assessments and quantifying business risks. From there, the risk manager will propose actions to control or reduce risk. Risk management is also part of meeting compliance. Getting good risk management jobs requires extensive training and experience. However, understanding the necessary background is the first step.

What is risk management?

Within the insurance industry, risk is the probability that a negative event or loss may take place. Losses can include damage to physical facilities, stolen data and technology, employees, assets and more. All these types of the losses can have a large financial impact on the stability of any business. In addition, risks can include natural disasters such as floods, fires or computer crashes, employee error, theft and others. So, the field of risk management is tasked with understanding potential sources of risk, calculating their probability and coming up with a disaster recovery plan either to eliminate or minimize the risks.

Educational requirements

At the very least, employers of risk management jobs are looking for candidates with a bachelors degree in management, business, finance and/or economics. The options are varied because risk management is quite broad. More often than not, an MBA is required. The individual must also exhibit strong quantitative skills especially when it comes to the use of predictive models.

Certification

What's great about the field of risk management is there are multiple certifications available. Not to mention, they are becoming increasingly required by employers. Getting certified can definitely help you begin your career or become more advanced. Especially because not all companies demand them, but that's not to say they won't in the near future. Other important credentials to have include experience in law, insurance, accounting, compliance and operational areas of the financial services industry. For instance, if you work for a securities trading firm you should have in-depth knowledge regarding trading practices and procedures. This type of knowledge is best gained from personal experience as a trader.

Three of the  most important certifications that you can achieve are the Chartered Property Casualty Underwriter (CPCU), Certified Risk Manager (CRM), and Associate in Risk Management (ARM). These are all available through the American Institute for Chartered Property Casualty Underwriters. This means that you have to take a course and pass a round of tests. When companies see that you are pursuing or have achieved designations, they tend to take you more seriously.

Training

Most risk management jobs expect you to have experience in risk management or a similar field. Some ways to gain experience are to start your career as a commercial insurance underwriter, claim adjuster or a claims manager. It also helps to have a background in bank management as these types of skills transfer well into the field of risk management. But, with the right college education and networking, you might get an entry level position within this industry.

Responsibilities

The duties vary on a day-to-day basis for risk managers. You could be a generalist or specialize within a single area. If you work in the financial services industry you might focus on:

·         Default loans

·         Losses on securities inventories

·         Losses on investment securities

·         Counter party risk

You also have the responsibility of developing, implementing and enforcing the rules needed to mitigate potential risks. Moreover, you might deploy financial instruments and contracts for more control such as:

·         Insurance

·         Swaps

·         Derivatives

·         Options contracts

·         Futures contracts

Not to mention, there is the ever growing problem with online data breaches and identity theft. Both of these issues can negatively impact financial stability and the business reputation. As a result, you might set policy around data security within IT groups.

Risk management jobs offer and require more than a 40-hour work week. This is because it is such a critical function of any company. And, during times of financial instability or a data breaches, you might be consistently on call. On the other hand, this is a career choice that is often well-paid and well-respected. With an MBA, you can expect to start at a salary in the low six figures with benefits. That rate can get incrementally higher as you establish seniority.

While beginning a career in risk management might seem intimidating, you can get a good job if you are willing to take the right courses and gain the right experience.