Risk Jobs – A Beginner’s Guide
Working in risk has evolved greatly over the years, not least in response to the global financial crisis of 2008 and the subsequent tightening of regulations over banks’ use of public money to salvage their mistakes. Regulatory measures are a key factor to consider for candidates considering a role in risk as the risk function works closely with the compliance team to ensure an organisation is operating safely within the remit set out by the regulations in place. For those individuals entering the risk profession currently, the next big regulatory directive to be aware of, if not fluent in, is the EU GDPR on data protection.
Tougher regulations have forced the risk function to respond in kind when it comes to their regulatory and stakeholder management capabilities, thus the core attributes employers are looking for when hiring for risk jobs are strong communication and relationship building skills. Risk professionals are expected to be able to explain the complex issues surrounding their organisation’s appetite and tolerance for risk effectively and clearly to people across the business.
A good piece of advice for those starting out in risk is to get out and establish positive relationships with the people you work with as those connections will serve you well later on when you’re conducting investigations and need help and information from those same people.
Graduates looking to apply for jobs in risk must be able to demonstrate an intellectual curiosity and desire to dig deep into things, as well as a knack for grasping and interpreting information quickly and applying a keen eye for detail to every area of the job. The technical component to the role also expects a degree of mathematical prowess, as well as comfort with differential equations and financial modelling which can all be applied to real life scenarios where the risk professional will exact their proficiency for problem-solving.
Starting out in risk will likely see you rotated around the various strands of the risk function, including market, credit and operational risk which deal respectively with risk posed by financially traded products such as stocks and bonds which are susceptible to fluctuations in value due to external factors; a company or other body refusing to fulfil their debt; or an internal debacle causing losses or damage.
However, as the world has waved in a new technological era rife with unknown pitfalls, cybersecurity risk has joined the ranks of the risk function along with model and contagion risk. Ultimately, having the opportunity to gain experience across the various strains of risk will expose you to the inner workings of each area of risk and understand where your particular skillset best fits.
Important skills that will contribute to your success in a risk job include knowing how to be a yes person when necessary – risk professionals must invoke confidence and respect in their peers to be taken seriously, if you say no too often it’s likely you won’t last long in the role. Self-confidence is another important trait in a successful risk professional as the further up the ladder you go the more contact you’ll have with senior members of the business and traders in particular who will challenge you on wanting to increase their risk tolerance. Situations like this require those working in risk to trust their instincts in the face of senior opinion and exercise a keen eye for detail in order to back up your assertions when you know something is wrong and thus question when questioning is warranted. Banks tend to want to empower those working in their middle office to stand their ground, especially with the GDPR fast approaching as any oversights or mistakes could lead to huge fines and reputational damage.
The risk function demands individuals who are in tune with market trends enabling you to alert and prepare senior management for risks that may emerge, as well as the bank’s appetite for assuming them and strategies for detecting and mitigating them. Be flexible, well versed in regulatory events, an excellent communicator and a strong analytical and strategic mind and you will go far in any risk job you set your sights on.