How to make a career in financial risk management

There is a risk factor involved in every field of life, and without eliminating the potential risks, there can be no achievement of success. An organization requires qualified, trained, and certified professionals for financial risk management to mitigate potential encountered and future risks. A candidate may thus go for a certification in the risk management field to secure their future. Risk management is a concept applicable to every organization, irrespective of its end result or product. Thus, risk management certification widens the opportunities that a candidate can avail as several renowned organizations can hire them.

 

Risks can be of several types, such as – unforeseen/uncategorized risks, managerial risks, quality risks, financial risks, etc. Although a professional should treat every risk as equally important, the worst type of risk is financial risk and has to be given special attention to prevent it from happening and also to provide necessary preparations to mitigate sudden breakdown of the economic structure; and build the process/product again from scratch. This undertakes the skills to delineate the budget required for the project (including miscellaneous costs), being able to execute the project within the fixed budget, possessing the ability and the stability to keep the team/organization together in a situation of financial breakdown, and help start from the beginning with good ideas and techniques.

 

Requirements to be successful in a financial risk management career: – The minimum requirements for the career prospects are the apparent skills mentioned above along with education/experiences such as:-

 

– 3 – 5 years advisable expertise in financial risk management positions

– A bachelors degree in finance and accounting

– One of the risk management certifications is a must, along with optional risk management training.

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Financial Risk Manager Certification (FRM):- introduced in the year 1997, this certification is headed by the GARP (Global Association of Risk Professionals). This is a PBT or paper-based test and can be scheduled only on the 3rd Saturday of May and November each year. The exam consists of multiple choices types of questions. There are two subs – exams of 4 hours duration each. The first paper consists of 100 questions, while the second paper consists only of 80 questions. A pass percentage of 46% and 52%, respectively, in paper I and paper II, can provide the candidate with the desired certification. The highest cost (in case of late registration) cumulatively for both the tests is approximately USD 1400.

The posts that one can achieve with FRM certification are:-

 

– Enterprise risk manager: – The certified individual will be entrusted with the holistic management of risks encountered in an organization and their tackling and thereby strive towards the ultimate goal of the project/organization with increased remunerations.

 

– Financial risk analysts: – These individuals are expected to calculate the Credit risks involved in a project and decreasing them with efficient ideas.

 

– Investment banking: – The functions are undertaken here are capital market transactions, leveraged financing, accounting, etc.

– Risk qualification manager

– Risk management analytics consultant

– Analytics client consultant

– Credit risk analyst

– Large enterprise commercial risk manager

– Corporate risk director

– Regulatory risk analyst

– Operational risk analyst, etc.

The companies/organizations to consider getting into with an FRM certification for a better future in financial risk management are:-

– Citigroup

– Deutsche bank

– UBS

– ICBC

– HSBC

– KPMG

– Credit Suisse

– PwC, etc.

Risk is, in fact, a non-negotiable part of every venture of life. It can be only decreased or tackled or the probabilities minimized, but it can never be eliminated. The risks associated with organizations are several types, such as – Resource risk, time management issues, financial risks, security threats, etc. Of these, the financial risks are the fastest growing sector as the financial aspect is the main criteria to look after to maximize the incoming profit of any project of an organization. The prerequisites, hiring organizations, certifications, posts, and other career-related details in financial risk management have all been discussed above with summarized data from credible sources to help the reader get an overall yet well enough idea about the career prospects in financial risk management.s

 

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