In today's time when there is so much uncertainty attached to businesses around the globe, managing risk effectively is a key factor in companies' success. Businesses these days are going through a lot of changes like market volatility, enterprise risk landscape, regulatory and compliance requirements, financial risk etc.
To manage these risks effectively, companies require an extremely robust risk management framework and skilled Risk Managers to implement and execute the same successfully. In the current market scenario, there exists an incredibly high and increasing demand - supply gap in this domain. Risk Management is the art of handling a tough situation in business which involves managing strategic, operational, regulatory, compliance and financial risk of an organisation.
Risk management is required across all industries - manufacturing, retail, telecommunication, hospitality, service etc. beyond just financial and regulatory risk mitigation. Risk management teams are the key input feeders for a company's top management and help it in making risk- intelligent strategic decisions.
Why a risk manager?
One may think that when the company has Financial Advisors, what role a Risk Manager would play? While a role of a Financial advisor is only limited to managing the investment / financial risk by identifying the best investment options, a Risk Manager has a way larger role as he works towards managing all type of risks for a company like strategic, operational, compliance, regulatory and financial risks. A good risk manager would be able to recognise and examine the business environment, assess the risks the business is exposed to, design and define risk mitigation strategy to ensure that the organization is able to meet its business objectives.
Some of the key skill sets that a successful risk manager is equipped with are:
i. In-depth knowledge of business value chain - Ability to understand and identify improvement opportunities to drive efficiencies across business processes.
ii. Enterprise risk management - Understand and analyse risk, velocity of risk etc. at an enterprise level.
iii. Analyse and interpret Big Data - Ability to analyse data across business value chains like procurement, manufacturing, finance etc. All these analysis are used as critical inputs by management for taking key strategic decisions.
iv. Managing cyber risk - Ability to design controls to avoid cyber attack in the day and age of rapidly growing online businesses.
v. Managing technology risk - To ensure confidentiality and integrity of critical business information.
vi. Regulatory and compliance risk - With rapid growth and multi -location operations, ensuring compliance with regulatory requirements across locations.
Some of the key roles of a Risk Manager are:
i. Developing risk library of all risks, an organization is exposed to strategic, operational, regulatory, compliance and financial.
ii. Design robust control frameworks to avoid business breakdowns, pilferage, inefficiencies etc.
iii. Supporting management in taking risk-intelligent decisions to ensure business value maximisation.
iv. Conduct periodic reviews to ensure all processes like manufacturing, procurement, finance, human resources, payroll, sales and marketing etc. are working as desired.
Career prospects
In a critical role of ensuring business value maximisation along with compliance to the organisation and regulatory policies, Risk Managers are needed in every organisation. Owing to their great demand, with a specialised risk management qualification in hand, large consulting and risk consulting organisations like Accenture, EY, KPMG, PwC, Deloitte, Protiviti, Grant Thornton, etc. and other large corporates like General Electrics (GE), Tata Group, PepsiCo etc. are looking for an opportunity to induct trained students in their organisations at a much earlier stage. Talking about the current scenario, a lot of time is being spent by companies to train risk management concepts to the resources hired - leading to lower productivity for the organisation in the initial phase of an employee's career.
Thus, a talent pool of professionals trained on a world class risk management curriculum will lead to higher productivity for all - small, medium and large corporates. Professionals with specialised education in risk management are believed to have faster career tracks, as compared to their peers who join with more generic qualifications. Additionally, a Risk Manager given the intense training in his discipline can operate in all the environments that a Financial Advisor can operate in.
Career options
The vast range of career options for a Risk Manager across industries/functions are:
- Industry opportunities: Services, Manufacturing, Insurance, Banking, Retail, Healthcare, Consulting, Entrepreneurship
- Corporate governance function of an organisation Controllership/ Audit department of any organisation
- Finance function
Pay packages
Students with specialisation in risk management may earn an attractive salary starting from an initial band of Rs 7 - 9 lakh per annum.
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