The risk management analyst career is one of the most preferred job options considering the threats organizations face today. Risk is present everywhere -and if organizations overlook these risks, they might get in trouble by becoming victims of threats.
As an employee, you hold the highest place in the company because you are responsible for implementing effective risk control strategies for successful project completion that ultimately leads to revenue generation for the company. As a risk manager, you combine the company’s policies with their short-term and long-term goals and carve out a plan that leads to its progress.
What is Risk Management?
Risk management means identifying, assessing, implementing, and evaluating risk control systems to protect the company’s digital financial and non-financial assets from cyber-attacks due to internal and external factors.
Importance of Risk Management
- You can foresee the potential threats and take effective measures to mitigate their effects.
- You can create a secure work culture for both employees and stakeholders.
- Business operations are streamlined, and this reduces legal problems.
- It involves analyzing projects at each level, thereby increasing in-house communication.
- An effective risk control strategy can protect the company’s assets from the financial crisis.
Types of Risk Management
Strategic: It is a type of risk management that comes into practice when a competitor threatens a company’s market value. It is implemented to reduce the competitor’s impact on the company’s market reputation.
Compliance: It helps companies resolve how they operate that might get affected due to new laws and regulations.
Society: Societal risk management involves protecting the concept of equality of rights for everyone.
Financial: It deals with safeguarding the financial assets of the company, like accounts and insurance.
Operational: It supervises problems involved in business operations, such as wear and tear of machinery, employee loss, power cuts, or other materials involved in working.
Environmental: It deals with natural disaster situations and plans strategies to make businesses environment friendly.
Employee: It deals with employee conflicts, such as fraud, violent behavior, etc., at the workplace, especially in large organizations.
Political: It is not common but still, it is required. It helps the smooth functioning of the companies situated on the border between two states.
Cybersecurity: Cybersecurity deals with issues such as stealing personal data, digital assets, or fake technology.
Top 5 Risk Management Analyst Jobs
There is a huge demand for risk management analysts in every industry. Yet, there are a few job areas that are high in demand. Let us now explore each of them one by one.
Market Risk Analyst
Market risks occur due to external factors, such as interest rate changes or economic crises, and are beyond the company’s control. It is also referred to as systematic risk and cannot be lessened as it is not associated with a particular company or industry but depends on the entire market’s performance. The only option left with companies is to use VAR (Value at Risk) and other stress testing methods to understand the risk associated while investing.
Responsibilities of a Market Risk Analyst
The entire market gets affected by the risk, so it isn't easy to mitigate it. And this makes analyzing market trends quite challenging for market risks analyst.
Here are a few main responsibilities you have to take care of:
- As a market risk analyst, your job involves identifying potential losses and returns associated with any investment using statistical risk management tools like VAR.
- You have to research past, current, and future market trends to plan for future movements that are in sync with the company’s growth objectives.
- You are required to prepare a data analysis report and present it to the board members and stakeholders.
Skills Required
- Bachelor’s degree in business, finance, accounting, or statistics is required. Some companies may prefer a master’s or an MBA degree in finance.
- It will be an added advantage if you have professional certifications, such as CFA (Certified Financial Analyst) or FRM (Financial Risk Management).
- Proficiency in analysis programs, like MS Excel, MS Access, Visio.
- Excellent analytical thinking and decision-making ability.
- Strong verbal and written communication skills.
- Strong mathematical foundation in statistics.
Salary
- The average salary in India: Rs. 7-8 Lakh per annum
- The average salary in the US: $50,000 per annum
Operations Risk Analyst
Operations risk refers to the damage a company might face due to inaccurate internal policies and processes, system failure, or employee conflict than external factors, such as politics or market changes. These types of risks are unique for every company and difficult to determine and control.
Responsibilities of Operations Risk Analyst
Several functions are performed by operations risk analysts in compliance with the company’s goals. Your role varies depending on the industry you serve, yet there are a few common tasks and duties you have to follow.
Investigate the organization’s operation policy, study and record processes followed during day-to-day activities, and suggest regulatory procedures. Gather data from different departments to analyze risk-related internal and external resources and suggest solutions to mitigate them.
Evaluate revised and new policies and processes to ensure the existence of enough risk management tools to control and monitor them.
Identify financial and economic trends related to the project management process to identify risks and develop risk-handling strategies for a better future.
Skills Required
- Experience of 1 to 5 years as an analyst in the related field.
- Strong verbal and written communication skills.
- Proficiency in analysis programs, like MS Excel, MS Access, Visio.
- Independent problem solving and critical thinking ability.
- Awareness of programming languages, such as Python and SQL.
- Strong presentation skills and knowledge of using presentation software like MS-PowerPoint.
- Professional certifications, such as FRM (Financial Risk Management) or PRM (Professional Risk Manager), will be an added advantage.
Salary
The average salary in India: Rs. 5-6 Lakh per annum The average salary in the US: $65,329 per annum
Credit Risk Analyst
Credit risk refers to the lenders' loss if they do not get back their principal and interest amount. It is not possible to decode before lending who can commit fraud or violate contractual compulsions. But by minutely assessing and managing the potential damages, you can lessen their chances of occurrence. You can measure the borrower’s ability to pay back as per the contract’s terms and conditions.
Responsibilities of Credit Risk Analyst
As a credit risk analyst, you are responsible for carrying out several tasks to minimize the company’s financial risk that might occur on lending massive amounts of money by doing proper background research of the client.
- Review the financial background of a person or a company to analyze the risk they can pose for the lender.
- Provide a detailed report of the analysis, i.e., whether the borrower will pay or not and possible solutions to the managers or the lender.
- Keep them updated with the lending policies of the company and suggest improvements if required.
- Develop spreadsheet templates to carry out analysis of existing and future credit applications.
Skills Required
- Bachelor’s degree in accounting, finance, statistics, or business-related domain.
- Strong reasoning abilities and quantitative approach to problem-solving.
- Basic (MS Office) to advanced computing skills with coding knowledge.
- Ability to work independently or under minimal supervision in a high-pressure work environment to meet the project’s deadline.
- Excellent concentration power with strong attention to detail to analyze any inconsistency in the data.
- In-depth understanding and knowledge of financial statements, ratios, and concepts.
- Having professional certifications, like CRC (Credit Risk Certification).
Salary
The average salary in India: Rs. 5-6 Lakh per annum The average salary in the US: $65,329 per annum
Cyber Security Risk Analyst
Cyber security refers to protecting an organization from cyber-attacks. It involves continuous research in accordance with the current IT trends, assessing suspicious activities, creating mitigating threat plans, reporting data breaches, and creating awareness among the staff about security measures.
Responsibilities of Cybersecurity Risk Analyst
Your primary role as a cybersecurity analyst is to safeguard the company’s system and networks from cyber threats. You have to perform several tasks, which may differ depending on the type and size of the company, yet the basic concept remains the same.
- Responsible for installation, updation, and management of software on the company’s systems and create a plan to secure data usage.
- Monitor the activities taking place in the networks and respond immediately to any suspicious activity.
- Research and stay updated about the latest IT trends, potential attacks and suggest security strategies.
- Identify risks, implement security controls, and evaluate their performance continuously.
Skills Required
- Bachelor’s degree in computer science, information technology, cybersecurity, forensic computing, network engineering, or similar field.
- Practical knowledge of programming languages, such as Java or C++. It helps you to understand threats and, if required, rewrite the software.
- Ability to think like a hacker. It will help you understand how hackers perform cyber-attacks and create a plan to prevent them before they occur.
- As a cybersecurity analyst, you must be comfortable working with different networks and operating systems, such as Linux, Windows, Android, iOS, etc.
- Professional certifications, such as CISA (Certified Information Sytems Auditor) and CRISC (Certified in Risk and Information Systems Control) by ISACA, will be an advantage.
Salary
The average salary in India: Rs. 7-8 Lakh per annum The average salary in the US: $76,000 per annum
Climate Risk Analyst
Climate risk management deals with potential financial risks that can arise due to natural calamities. Nowadays, most investors expect companies to update them about climate-related disclosures so that they have a better understanding of the type of risks involved and decide the investing amount accordingly. Hence to build a company’s market reputation need for effective climate risk management is continuously increasing.
Responsibilities of Climate Risk Analyst
As a climate risk analyst, your job requires you to focus on applying your technical expertise to physical sciences. It gives practical insights to help companies understand climate threats and how they can adapt to those changes.
- Responsible for analyzing rainfall, availability of water, flood risk, and several other climate changes factors that can harm the company’s business objectives.
- You have to collect, filter, and analyze data from several sources for projects related to climate risk and prepare a report as well.
- Be comfortable working with teams from other disciplines to deliver consultancy projects successfully.
- To identify climate risks, create a framework following the organization’s regulatory policies and business goals.
Skills Required
- Master’s degree in hydrology, physical geography, engineering, or related field.
- Excellent written and verbal communication skills, preferably in English.
- Advanced MS-Excel working knowledge and MS Office suite.
- Outstanding problem-solving, numeracy, and analytical skills.
- Ability to work independently under pressure and must be able to travel if required.
Salary
The average salary in India: Rs. 5-6 Lakh per annum The average salary in the US: $54,470 per annum
The Final Words
Nowadays risk management analyst career is in huge demand and offers tremendous job growth in the years to come. The world has realized that the need for risk management is not limited to cybersecurity alone but spans over several other functional areas also. Today organizations prefer to employ professionals who hold globally recognized certificates. These certifications give you the title of subject matter expert, and you can land a high-paying job without much effort.
Risks can be big or small and can occur without any notice in the form of cyber-attacks, loss of a company’s financial assets, employees, natural disasters, and for several other reasons you might not have thought for.
It is where the role of risk analysts appears. They are responsible for analyzing the current situation, listing potential risks, and rolling out plans to minimize their occurrence or plan to reduce their adverse effect even if they occur.
If you are currently working as a risk analyst, share what challenges you face while working and what advice you would like to give risk analyst aspirants in the comments.
