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Financial risk analyst: Job description

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Financial risk analysts identify and analyse the areas of potential risk threatening the assets, earning capacity or success of organisations in the industrial, commercial or public sector.

They are sometimes called:

  • risk managers;
  • risk technicians;
  • risk surveyors.

They are responsible for predicting change and future trends, as well as forecasting cost to the organisation.

There are high degrees of specialisation within the profession. Risk analysts may work in sales, origination, trading, marketing, financial services or private banking, specialising in:

  • credit;
  • market;
  • operational;
  • regulatory.

Financial institutions are required to manage market and credit risks daily. Risk analysts are therefore increasingly tasked with responsibilities touching all four key areas.

An alternative but similar role to financial risk analyst is that of the credit analyst, in which the creditworthiness of a business is calculated and a probability of payment determined. Risk analysis is considered by many to be advanced credit analysis.

Typical work activities

A financial risk analyst's role is to formalise the process of risk management within an organisation. This involves business decision-making and enabling the process of risk taking.

  • Credit risk specialists analyse the risk to the company of its customers not paying for goods or services or defaulting on loans.
  • Market risk specialists analyse the risk of outside factors that may affect the share price or the market. They typically work closely with traders to calculate the risk associated with specific trading transactions.
  • Operational risk analysts look at the likelihood of risky events, such as system breakdowns and employee fraud.
  • Regulatory risk analysts look at the impact that new legislation may have on the company.

Work activities depend on the nature and business of the employer, but tasks typically involve:

  • making recommendations to reduce or control risk, which may involve an insurance strategy;
  • working with traders to calculate the risk associated with specific transactions;
  • liaising with underwriters and insurers;
  • forecasting and monitoring market trends;
  • considering proposed business decisions;
  • conducting research to assess the severity of risk;
  • conducting statistical analysis to evaluate risk and using statistical software such as SPSS and SAS;
  • reviewing legal documents;
  • presenting ideas via reports and presentations, outlining findings and making recommendations for improvements;
  • purchasing insurance;
  • analysing a bank's market position and running figures through complex modelling techniques to find value at risk (VAR) measurements;
  • carrying out quantitative analysis;
  • using financial packages and software, including portfolio management software;
  • studying government legislation, which may affect a company, and advising on compliance;
  • protecting the organisation's assets and public image;
  • developing contingency plans to deal with emergencies.
 
 
AGCAS
Written by AGCAS editors
Date: 
June 2015
 

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