Open to all in the Risk Profession or Risk-related roles to share experiences, career progression advice and maybe mentoring

1. What is Risk Mgt?

2. Why Risk Mgt?

3. How do I become a Risk Mgt Professional?

What is RM?

Risk Management is the process which aims to help organisations understand, evaluate and take action on all their risks with a view to increasing the probability of their success and reducing the likelihood of failure.
Risk management gives comfort to stakeholders (shareholders, customers, employees and so on) that the business is being effectively managed and helps the organisation confirm its compliance with corporate governance requirements.

Why RM?

Businesses face risk every day. In fact, without risk a business or organisation would not grow and thrive.  RM is relevant to all organisations whether they are in the public or private sector, or whether they are large or small. It should form part of the culture of the organisation, with an effective policy and programme led by top management with clear responsibilities laid down for every manager and employee to be involved in the management of risk. It supports accountability, performance measurement and reward thus promoting efficiency at all levels.

How does one become a RM Professional?

The purpose of risk management is to safeguard an organisation, its customers, reputation, assets and the interests of stakeholders by identifying and managing all threats to the achievement of its business objectives. This often involves risk financing including insurance purchase. Detailed activity will vary considerably with the nature of the organisation and the actual risks it faces, but there are common principles, skills and activities that guide the function.

Within larger organisations there is likely to be a need for a dedicated Risk Manager whose role would include:
Setting policy and strategy for RM
Being the primary champion of RM at strategic and operational levels
Building a risk aware culture within the organisation including appropriate education and training
Establishing internal risk policy and structures for business units
Developing risk response processes including contingency and business continuity programmes
Preparing reports the board and stakeholders

Risk management requires a detailed knowledge and understanding of the organisation and the processes involved in the business. As well as internal specialists there is a usually a huge number of different advisers and consultants providing support to an organisation's risk management programme. Because of this, risk management is a truly multi-disciplinary profession. Having said that, a degree in RM (yet to find any undergraduate courses though) and/or professional qualification will suffice.

^ Thanks for the explanation.

Your last sentence might be why RM is relatively unknown, or why there are almost no job ads for entry level RM.

Seems its the sole reserve of middle to upper mgt staff who take courses to specialize in RM after having been assigned that portfolio?

Btw, it seems to have elements of PR, HSE, CISA, CISSP, BCP and Project Mgt.

Recently, i started developing interest in Risk Mgt. My area of interest is Financial Risk Mgt. I actually have not done anything relating to Risk Mgt in practical terms aside textbook and google knowledge.

I would be glad if you could give a hint on the following;

1. how challenging is Risk Mgt or in my case, financial risk mgt?

2. what respect/recognition do they enjoy in an organisation?

3.how can one become a risk manager?

4. what is the pay(salary) for risk mgt professionals like?

5. what is the dividing line among risk mgt, business control system and insurance? I know google can help here but let me hear from a practitioner.

Thanks

@ Yamakuza
Good observation … Most organizations require a minimum of 2 years work experience for RM jobs which is the closet to entry level I have seen. However, there are many entry level risk-related jobs roles which provide a foundation for RM positions in the long run. Because of the unavoidable nature of risk, lessons learnt from the credit crunch and the advantages associated with good RM practices, I foresee undergrad RM programs in the near future though.

Because good RM is proactive not reactive, it is everybody’s responsibility! Yes, it is the sole preserve of top management to create a risk aware culture, design and implement an overall RM process for the entire organization, manage the process of identifying and assessing risks affecting the business, oversee and implement risk control actions, monitor and evaluate RM success in the organization, organize appropriate risk reporting both internally and externally…. Bla bla… It is the responsibility of the guys at lower levels to identify risk and actively apply RM measures.

Risk is everywhere and success in any business is attributed to the ability to identify and manage possible risks associated with potential opportunity and returns. Typically, risks include apparent ones like health and safety risks associated with operations, financial risks from exposures to market price volatility, credit or counterparty risk etc. While these risks are intuitively obvious, unfortunately, some of them like Reputational risk, Political risk; Country risk, Regulatory risk etc are not. Risks emerge from different activities and so it’s important to identify potential risk as per your line as activity and manage them adequately hence the element of RM in other industries/professions as you mentioned.

@ Chamber2

Because I am only a few months in RM myself I may not give answers to your questions any better than google. See http://www.garp.org/frm/frm-program.aspx

Both Business Control Systems and Insurance are RM practices. BCS provides inventory control which reduces the risk of fraudulent activities. Insurance is a risk financing method where risk of loss is transferred to the insurer who in exchange for a premium, agrees to compensate the insured in the event of occurrence of the risk being insured against.

chamber2:

Recently, i started developing interest in Risk Mgt. My area of interest is Financial Risk Mgt. I actually have not done anything relating to Risk Mgt in practical terms aside textbook and google knowledge.

I would be glad if you could give a hint on the following;

1. how challenging is Risk Mgt or in my case, financial risk mgt?

2. what respect/recognition do they enjoy in an organisation?

3.how can one become a risk manager?

4. what is the pay(salary) for risk mgt professionals like?

5. what is the dividing line among risk mgt, business control system and insurance? I know google can help here but let me hear from a practitioner.

Thanks

I could help with some of these

1)Being a risk manager is not very challanging once you have a good quantitative background.

2) Not very much to be honest. While risk management may become a greater focus at most firms which may obviously lead to upward hiring trend in this sector within the near future, in the long term risk management is not a business-building, revenue generating, profit growing role.  As a risk manager, you are not bringing the profits through good trades and investment, and anyone familiar with business 101 will know that you are instinctively measured by how much you contribute to the bottom line.

3) Having a quants background and studying up on risk management is generally enough for the knowledge you may need. For financial risk management, a good knowledge of probability curves will be a good way to start, but like in every other career, a sound experience has no substitute.  You may also consider taking up the Financial risk management or Professional risk management designation.  Both of them are structurally the same except that the latter may be more advisable if at some point you'd like to consider a career outside of finance for oil and gas.
If you'd like to stick to finance, you are likely better off working in contrcat jobs than a full time job. The guy doing the risk consulting for my office takes home close to 900 pounds a day on a 12months contract job.

4) In finance in the UK, entry level pay will normally be between 25k to 30k.  Mid level to senior level pay will normally be in the 80k to 100k category. You will not likely get a mouth watering jumbo bonus, and the exit opportunities aren't very rewarding.

5)  Usually, these functions are merged in most teams.  The risk management specialist set acceptable limits and the insurance specialist ensures that the company is well protected in the event of severe loss.  There's usually a compliance team on the side to ensure that all teams abide by set regulations.

Thanks guys.

I am more informed now. Vital information is becoming free these days

The US had better stopped that their nonsense legislation oh

@ Violent
Are you in the risk profession? I would like to get in touch if you dont mind. Please email me on a.aannaann@gmail.com and I'll get back to you. Thanks

eva4:

@ Violent
Are you in the risk profession? I would like to get in touch if you dont mind. Please email me on a.aannaann@gmail.com and I'll get back to you. Thanks

I'm not in the risk profession, but i've had to do a lot of self study on financial risk. I'd send you a mail shortly.

Risk Management is very diverse and broad. I don't even know where to start from. In the financial Services

The very common ones are:

Market Risk: Equity, commodity, currency, interest rate.
Credit Risk: Default, concentration
Regulatory Risk: Regulatory and Compliance
Operational Risk

Analysis and monitoring of the above differs for different divisions in a large financial institution. e.g Credit and regulatory in the Retail banking environment is different from that of Corporate / Investment Banking.

So, as a Risk Manager, are you expected to master all these areas or specialize?

yamakuza:

So, as a Risk Manager, are you expected to master all these areas or specialize?

A risk analyst would specialize in one of the four, he would also be trained(basic) on the others . Most organisation would tailor his or her training to fit the division he/she works. E.g in regulatory risk, the framework set by regulators differs for retail products and investment banking financial instruments. In regulatory risk, risk managers mostly manage junior risk staff, act as liaison staff between the company and external regulators, model the company risk framework to align with the framework set by external regulators, ensure junior risk staff are up to date as regulators revises standards frequently e.t.c

In most organization. A entry level risk programme would be a year or 2 years rotational training in the four tiers of risk listed in my post above. After completing the essential training program, the staff would be posted to a specific department where he can now specialize. Degrees accepted unto a risk program varies lot, but someone with a mathematical background would perform better on credit and market risk while someone with a more theoretical degree might find regulatory risk more enjoyable. Even in regulatory risk, mathematics is still very important as a staff might have to deal with threats like Anti money laundering, terrorist financing and frauds.

saxywale:

In most organization. A entry level risk programme would be a year or 2 years rotational training in the four tiers of risk listed in my post above. After completing the essential training program, the staff would be posted to a specific department where he can now specialize. Degrees accepted unto a risk program varies lot, but someone with a mathematical background would perform better on credit and market risk while someone with a more theoretical degree might find regulatory risk more enjoyable. Even in regulatory risk, mathematics is still very important as a staff might have to deal with threats like Anti money laundering, terrorist financing and frauds.

Hmmn. Thanks. Seems like you are in the industry?

[s]I think i'm leaning towards Regulatory Risk.[/s]

Its like those who formulate policies actually earn more than those who implement them.

yamakuza:

Hmmn. Thanks. Seems like you are in the industry?

[s]I think i'm leaning towards Regulatory Risk.[/s]

Its like those who formulate policies actually earn more than those who implement them.

Depends on the organization, junior risk analyst can contribute in risk strategy and policy formulation. But the big bucks earners are the senior managers that implements the policy. 
I currently work in retail banking regulatory risk and compliance at the moment. It's interesting and very challenging. Work varies alot as you could be seconded from a long term project e.g complaints, investigation and resolution to a short term project like analysing the risk that might be involved in introducing a new current account into the market. M sure regulatory risk differs greatly in IVB. The bottom line is to prevent loss to the organization and to avoid heavy fines from regulators.

Risk is now very important, the sub prime mortgage crisis is an example of how weak risk practices can negatively effect not just business but countries as well.

Interesting topic! For more information on Risk management education, visit www.theirm.org; their program is more robust.

Thank God for this link. I am into insurance which is basically risk management. I have finished the insurance exams and still desire to have a certification in Risk Management. THere is no indication that IRM has its presence in Nigeria neither have I seen any other risk mgt body so far. I need advise from the house pls. Tks.

lolarde: Thank God for this link. I am into insurance which is basically risk management. I have finished the insurance exams and still desire to have a certification in Risk Management. THere is no indication that IRM has its presence in Nigeria neither have I seen any other risk mgt body so far. I need advise from the house pls. Tks.

hmmn.

This is where that Email Notification feature would have proved useful.

You might have to contact them one by one, or dig through the Training childboard.

Some guy was advertising Enterprise RM, but he never bothered to comment on this thread.

Best of luck!

violent:


I could help with some of these

1)Being a risk manager is not very challanging once you have a good quantitative background.

2) Not very much to be honest. While risk management may become a greater focus at most firms which may obviously lead to upward hiring trend in this sector within the near future, in the long term risk management is not a business-building, revenue generating, profit growing role.  As a risk manager, you are not bringing the profits through good trades and investment, and anyone familiar with business 101 will know that you are instinctively measured by how much you contribute to the bottom line.

3) Having a quants background and studying up on risk management is generally enough for the knowledge you may need. For financial risk management, a good knowledge of probability curves will be a good way to start, but like in every other career, a sound experience has no substitute.  You may also consider taking up the Financial risk management or Professional risk management designation.  Both of them are structurally the same except that the latter may be more advisable if at some point you'd like to consider a career outside of finance for oil and gas.
If you'd like to stick to finance, you are likely better off working in contrcat jobs than a full time job. The guy doing the risk consulting for my office takes home close to 900 pounds a day on a 12months contract job.

4) In finance in the UK, entry level pay will normally be between 25k to 30k.  Mid level to senior level pay will normally be in the 80k to 100k category. You will not likely get a mouth watering jumbo bonus, and the exit opportunities aren't very rewarding.

5)  Usually, these functions are merged in most teams.  The risk management specialist set acceptable limits and the insurance specialist ensures that the company is well protected in the event of severe loss.  There's usually a compliance team on the side to ensure that all teams abide by set regulations.

This is the exact same reason why I am not fully into theoretical and practical risk management. Although it is a great field, I must confess, risk management is a middle to back office role with little or no exit opportunities. Nonetheless, I have over the years developed an average/above average grasp of risk measurement and management tools, and I can function well as an intermediate risk manager. You know, lower partial moments are very much in use in risk measurement, especially when earnings, returns or profits do not follow the celebrated Gaussian distribution and volatility is not constant. If fact, these lower partial moments can help a firm to factor in its risk appetite or risk profile into main business decision making. Lower partial moments are an offshoot of distribution theory, a branch of statistics.

Unfortunately, as you have very well elucidated, the practice of risk management does not bring in the main, the main--kudi, owo, ego, igho, money! But, on a more serious note, I have recently been doing some things on hedging theory. I recommend this field to any aspiring risk manager who is looking to express solutions to risk management problems in analytical and closed forms. I know it is very theoretical, but financial institutions are increasingly adopting the technique without even fully knowing the theory behind it. That is why some people just hate finance people----they make a hell of money without necessarily knowing the working principles of the tools they use in making this money. And as Aswath Damodaran so succinctly implies, these financial practitioners will one day pay for their ignorance when the underlying assumptions governing known theories fail.


T22

I need major help. I just a job as. market risk officer and I really do not know much of market risk

Good one! *subscribing*

yamakuza:
1. What is Risk Mgt?

2. Why Risk Mgt?

3. How do I become a Risk Mgt Professional?

I'll approach the questions from a theoretical management perspective

1. What is Risk Mgt?

Risk management in simple terms is the ability of an organisation to recognise and mitigate issues that can affect the sustainability/profitability of a business

2. Why Risk Mgt?

Businesses are into business to make profit for shareholders. In trying to acheive this they seek to maximize oppurtunities (which would enhance business goals) and minimize risk (which could destroy the business purpose).
It is therefore important that while some professionals look at the bright side, some other professionals are able to look at the 'what ifs?" With such scenarios, the strategy team offers solutions.

Risk: What if Seun kicks the bucket? What then happens to NairaLand and all our data?
Nigerian strategists: He wont die in Jesus name. We bind you for talking like that
Professional strategists: We need to set up a succession plan and structure Nairaland for such eventualities

3. How do I become a Risk Mgt Professional?

I no know o
*runs to check google*

Much as I would love to be knowledgeable about the general Risk Management approach, please I would like the OP to talk more about Information Technology Security and Risk Management.

esere826:

I'll approach the questions from a theoretical management perspective


Risk management in simple terms is the ability of an organisation to recognise and mitigate issues that can affect the sustainability/profitability of a business


Businesses are into business to make profit for shareholders. In trying to acheive this they seek to maximize oppurtunities (which would enhance business goals) and minimize risk (which could destroy the business purpose).
It is therefore important that while some professionals look at the bright side, some other professionals are able to look at the 'what ifs?" With such scenarios, the strategy team offers solutions.

Risk: What if Seun kicks the bucket? What then happens to NairaLand and all our data?
Nigerian strategists: He wont die in Jesus name. We bind you for talking like that
Professional strategists: We need to set up a succession plan and structure Nairaland for such eventualities

Seun don suffer

This is an amazing topic I must agree. The relevance of Risk Management in any business can not be over emphasized. I have worked in the bank and I understand credit risk management. A bad risk assessment is the recipe for a bad loan. Therefore being able to analyse a facility with a strong reference to the 5 Cs of credit is a good beginning in managing risks.

I know for a certainty that the Chartered Enterprise Risk Analyst (CERA) program offered by the Society of Actuaries (U.S) and the Institute and Faculty of Actuaries (U.K) is the most robust Risk Management Program available. Since actuaries are natural risk-managers, they are well positioned to understand risk mgt and how to mitigate it, Most of the examples given by the OP relates to the insurance industry where 60% of actuaries work but over the past few years we have been able to expand into other specialities like Pensions,Consulting, Health and investment Banking. Although the road to becoming a qualified actuary is a long and arduous one- a major factor contributing to the dearth of actuaries worldwide. But if you can put in the effort, the pay is very rewarding. For more info, you can visit www.ceranalyst.org/non-soa-exam-process.asp

opendo21: I know for a certainty that the Chartered Enterprise Risk Analyst (CERA) program offered by the Society of Actuaries (U.S) and the Institute and Faculty of Actuaries (U.K) is the most robust Risk Management Program available. Since actuaries are natural risk-managers, they are well positioned to understand risk mgt and how to mitigate it, Most of the examples given by the OP relates to the insurance industry where 60% of actuaries work but over the past few years we have been able to expand into other specialities like Pensions,Consulting, Health and investment Banking. Although the road to becoming a qualified actuary is a long and arduous one- a major factor contributing to the dearth of actuaries worldwide. But if you can put in the effort, the pay is very rewarding. For more info, you can visit
www.ceranalyst.org/non-soa-exam-process.asp

Which school in the US or Canada offer Masters/Phd in Risk Management after graduated in Nigeria and have 10 years work experience in Insurance company risk management.. But wish to go for masters in Risk Management in US or canada. Any Post graduate affordable school that offer risk management in US or Canada?

opendo21: I know for a certainty that the Chartered Enterprise Risk Analyst (CERA) program offered by the Society of Actuaries (U.S) and the Institute and Faculty of Actuaries (U.K) is the most robust Risk Management Program available. Since actuaries are natural risk-managers, they are well positioned to understand risk mgt and how to mitigate it, Most of the examples given by the OP relates to the insurance industry where 60% of actuaries work but over the past few years we have been able to expand into other specialities like Pensions,Consulting, Health and investment Banking. Although the road to becoming a qualified actuary is a long and arduous one- a major factor contributing to the dearth of actuaries worldwide. But if you can put in the effort, the pay is very rewarding. For more info, you can visit www.ceranalyst.org/non-soa-exam-process.asp

What is your metric in reaching this conclusion? I do not disagree that actuaries manage insurance and pension risks, but it will interest you to know that in the financial services globally, there are two most respected risk certifications:

1) The Financial Risk Manager (FRM) certification awarded by the Global Association of Risk Professionals (GARP)
2) The Professional Risk Manager (PRM) awarded by the Professional Risk Managers' Int'l Association (PRMIA).

You can confirm this information by just a simple google of the most respected risk certifications or just google financial risk management.

I have a degree in Information Security & Audit which has IT Risk Management & Information Systems Auditing as some of it's modules. I hope to specialize in these areas. No one has mentioned IT Risk Mgt. on this thread so far. This gives me the impression that there are few IT Risk Managers/Professionals in this country. I can do with lots of mentoring from professionals in this regards. Many thanks.


P.S: I intend to start working towards getting CISA Certified.