What is Risk Management?
Businesses across the world are in the phase of rapid growth, integration and globalisation. To continue to grow at an accelerating pace, businesses are required to take risks. They have to deal with the changing risk landscape, including market volatility, geopolitical crises, widespread economic changes, regulatory reforms and cyber threats. This presents an opportunity to take advantage of the potential of risk. Risk management is beyond financial and regulatory risk mitigation; it looks at the overall business environment and encompasses managing of strategic, operational, regulatory, compliance and financial risk of an organisation. Risk management is required across all industries - manufacturing, retail, telecommunication, hospitality, services etc and is also relevant even for an entrepreneur. For an enterprise to be successful and not let risks jeopardize the company’s stability, a holistic approach to risk management is vital.
- The risk advisory services has a market size of more than $10 billion, growing at the fast year-on-year rate of about 40-45 percent.
- The top 250 companies spend around $30-50 million each on risk-related activities.
This kind of a market size translates into a great career opportunity in risk management. With no structured and comprehensive programme in India, or even globally, to address the skill set gap, trained risk management professionals will have an edge.
Evolving role in MNCs
A good risk manager should be able to recognise and examine the business environment, assess risks the business is exposed to, and define a risk mitigation strategy. The risk manager gets the opportunity to learn business nuances across the value chain of an organisation and not just confine their knowledge to functions like marketing, production, finance etc. They are also expected to analyse risks across all business functions and help define an apt risk mitigation strategy for the firm.
As risk management is an extremely vast and dynamic area, this specialisation is dependent on the qualification one acquires during their graduation. Thus, graduates from commerce, economics, statistics, arts, engineering or any other field can take this up as a specialized post-graduation option. The qualities needed are - analytical bent of mind towards problem-solving, ability to think out of the box to design solutions, willingness to learn, extremely good communication skills and dynamic personality.
There is a huge demand for trained risk managers across consulting firms and corporate houses globally. At present, all risk consulting firms, spend a large number of hours and effort in training risk management concepts to the resources hired, leading to lower productivity from these resources in the initial few years. Once these organisations get trained resources in risk management, they can achieve up to 30-35 percent higher productivity as compared to a generic masters’ student.
On the other hand, corporate houses do not have the internal machinery to provide best-in-class career enhancement training programmes to its employees in the risk domain, and hence, they have historically stayed away from hiring less experienced professionals.
With a specialised risk management qualification, corporates get an opportunity to induct relevant and uniquely trained students in their organisation at an earlier stage, allowing for better career progression.
Professionals with education in risk management are believed to have faster career tracks, as compared to their peers who join with more generic qualifications. This will hold true for all professionals pursuing a career in the domain of risk, compliance, controllership and internal audits. Thus, this positions the risk management trained resource in a premium bracket in a market which has infinite demand across industry sectors.
A talent pool of professionals trained on a world class risk management curriculum will create an ecosystem enabling all large corporate to hire trained risk managers. This talent is required by organisations globally, and thus, it is a passport to a global career.
A student armed with a risk management qualification has bright chances of getting hired as a risk consultant in MNCs and other large corporate organisations across verticals. The potential recruiters of risk managers are large consulting and risk consulting organisations like Accenture, EY, KPMG, PwC, Deloitte, Protiviti, Grant Thornton etc. Organisations like General Electrics (GE), Tata Group, PepsiCo etc are also potential recruiters.
Students with specialisation in this field may earn an attractive salary starting from an initial band of Rs 6-8 lakh per annual.
The vast range of career options across industries and functions is:
- Industry opportunities: Services, Manufacturing, Insurance, Banking, Retail, Healthcare
- Corporate governance function of any organisation
- Controller-ship/ Audit department of any organisation
- Finance function