Everything You Need to Know for a Career in Risk Management

Mr. Subhashis Nath, Mentor, GRMI, (Global Risk Management Institute) offers insights into the role of a Risk Manager

It’s time to look at the positives that effective Risk Management brings on to the table. Risk creates many challenges, but at the same time presents an opportunity to take advantage of the challenges, if its managed effectively. When we talk about globalization in businesses, we have to understand the fact that the latter is in a constant process of growth and amalgamation of various ideas. Keeping this situation in mind, a business needs to steadily analyze and respond to challenges like market volatility, geopolitical crises, wide-spread economic changes, regulatory reforms, and not to forget cyber threats, which have become frequent. This gives an implication that business are required to take risks to manage tough situations which in turn presents an opportunity to take advantage of the potential of risk.

Risk Management is the art of handling a tough situation in business which involves managing Strategic, Operational, Regulatory, Compliance and Financial risk of an organization. Risk Management is required across all industries - manufacturing, retail, telecommunication, hospitality, service etc. beyond just financial and regulatory risk mitigation.

A quick market overview -

• The Risk advisory services globally alone has a market size of $10 BN +, growing at an extremely fast rate of approx 40 - 45% YOY.
• Top 250 companies spend around USD 30-50 mn each on risk-related activities the world over.

The figures clearly represent that Risk Management as a career option has a bright future for all those aspiring professionals since its one of its kind programme in India which provides an edge to trained Risk Management professionals over other professionals in this space.

Role of a Risk Manager in an Organization

A good risk manager should be able to recognize and examine the business environment, assess the risks business is exposed to, design and define risk mitigation strategy to ensure that the organization is able to meet its business objectives. The Risk Manager gets a great opportunity to learn business nuances across the value chain of an organization and not just confine their knowledge to functions like marketing, production, finance etc. They are also expected to analyze risks across all business functions and help define an apt risk mitigating strategy for the firm.

How Risk Managers are different from Financial Advisors?

A Financial Advisor is a professional who renders financial advice to his / her clients. They focus on identifying the best investment portfolios for their client, to ensure they get them the best returns on their investment. Some of the key roles of a Financial Advisor are -

- Manage relationship with client by understanding investment goals, educating them about products etc.

- Financial Planning - developing investment plan of financial assets meeting the clients financial requirement

- Managing Portfolio - keep track of market movements and realign clients portfolio

Whereas, a Risk Manager has a way larger role as compared to a Financial Advisor and cuts across all business processes in an organization including Finance. The Risk Manager, manages all type of risks like strategic, operational, compliance, regulatory and financial risk for an organization / client. Some of the key skill sets a successful risk manager is equipped with are -

In depth knowledge of business value chain - ability to understand and identify improvement opportunities to drive efficiencies across business processes

Enterprise Risk Management - understand and analyze risk, velocity of risk etc. at an enterprise level

Analyze and interpret Big Data - ability to analyze 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.

Managing Cyber Risk - ability to design controls to avoid cyber attack in the day and age of rapidly growing online businesses

Managing Technology Risk - to ensure confidentiality and integrity of critical business information

Regulatory and Compliance Risk - with rapid growth and multi geography operations, ensuring compliance with regulatory requirements across locations

Some of the key roles of a Risk Manager are -

a. Developing Risk Library of all risks, an organization is exposed to - strategic, operational, regulatory, compliance and financial

b. Design robust control frameworks to avoid business breakdowns, pilferage, inefficiencies etc.

c. Supporting management in taking risk-intelligent decisions to ensure business value maximization

d. Conduct periodic reviews to ensure all processes like manufacturing, procurement, finance, human resources, payroll, sales and marketing etc. are working as desired

Career Prospects for Students Armed with Risk Management Degree

Owing to a huge demand for risk managers across various verticals globally, with a specialized risk management qualification in hand, corporates will now get an opportunity to induct trained students in their organizations 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 organization in the initial phase of employee 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.

A student armed with specialized education in Risk Management is believed to have faster career track, 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.

Pay Scale

Students with specialization in Risk Management may earn an attractive salary starting from an initial band of INR 7-9 Lac per annum.

The vast range of career options across industries / functions is -

• Industry opportunities: Services, Manufacturing, Insurance, Banking, Retail, Healthcare
• Corporate governance function of any organization
• Controllership/ Audit department of any organization
• Finance function

What is the eligibility criterion?

All graduates from commerce, economics, statistics, arts, engineering and others can apply for this specialized post graduation option.

Potential Recruiters

Possessing a degree in Risk Management increases your chances to be hired as a risk consultant in MNCs and other large corporate organizations across verticals. The potential recruiters of Risk Managers are large consulting and risk consulting organizations like Accenture, EY, KPMG, PwC, Deloitte, Protiviti, Grant Thornton, etc. Other large corporate organizations like General Electrics (GE), Tata Group, PepsiCo etc. are also potential recruiters.

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