what is a risk analyst?
As a risk analyst, your job involves identifying and monitoring risks associated with business decisions. You analyze the risks to a company's assets, capital, and investments using statistical data. The information you obtain puts you in a better position to provide strategic advice to businesses on minimizing uncertainty and increasing profitability.
Your job also entails developing contingency plans for the company or clients that you work for. These are plans designed to minimize the negative impact of unfavorable economic conditions, such as changes in government policy or market crashes. For this reason, staying up-to-date with market trends, regulations, and economic changes is crucial for a risk analyst.
On top of that, your job includes educating employees on risk-conscious behaviors, identifying potential risks, and implementing strategies to mitigate them. As a risk analyst, you are essentially the "guardian" of a company's financial health and stability.
Would working as a risk analyst suit your skillset, interests, and career goals? Then, read on to find out what competencies and qualifications you need to thrive in a risk analyst role.
view jobs near youaverage risk analyst salary
According to the U.S. Bureau of Labor Statistics (BLS), the median yearly salary for risk analysts is about $102,120. However, the starting salary for this role can be as low as $59,510 or $28.61 per hour. Experienced risk analysts make upwards of $175,720 annually. Factors such as education level, industry, and location may also impact salary levels.
factors that increase risk analyst salary
The salary of risk analysts depends on their experience and qualifications. In order to earn more, it's essential to have the appropriate relevant accreditations. There are five basic risk analyst certifications: Certified Risk Manager (CRM), Financial Risk Manager (FRM), Professional Risk Manager (PRM), and Chartered Enterprise Risk Analyst (CERA).
Furthermore, it is beneficial to collaborate with diverse industries. Each industry presents varying levels of risk. Gaining experience in roles like financial analysis, auditing, or compliance equips you with a versatile skillset, making you a valuable asset to prospective employers.
Another factor that helps boost risk analyst's compensation is the company they work for. If you work for a big financial institution or company, your pay is likely to be higher due to the complexity of tasks and the team you manage. Smaller companies may not have the resources to offer competitive salaries, but they are less demanding than their counterparts. If possible, you could use your extra time to earn freelance income.
Location also plays a big role in salary levels for risk analysts. In major cities like New York and San Francisco, the cost of living is higher; therefore, salaries tend to be higher as well.
Networking is another important factor in advancing your career as a risk analyst. Joining professional organizations and attending conferences can help you meet other professionals in the field and learn about new opportunities.
Finally, career advancement and professional development opportunities are crucial in increasing a risk analyst's salary. By keeping up with the latest developments in risk management, you stand out as a valuable asset to your company and have more leverage in negotiating for a higher salary.
Wondering what you can earn as a risk analyst? Find out immediately with the Randstad salary checker! You can quickly and easily see what the average salary of a risk analyst is.
types of risk analysts
The types of risk analysts depend on the area of specialization. These include:
- credit risk analyst: As a credit risk analyst, you determine the ability of a client to repay a loan. You work in an investment bank, mortgage firm, or insurance company to determine the risk of giving out a loan to a client. You analyze financial data and the creditworthiness of clients.
- regulatory risk analyst: As a regulatory risk analyst, you analyze policy or legislation changes and their impact on the company. For instance, you determine the impact that disciplinary actions and fines on loans have on the financial institution's reputation.
- market risk analyst: As a risk analyst, you analyze and review the stock market to check your company's share price. You check the economic trends and financial data to identify the risks to the company's assets and investments.
- operational risk analyst: This niche involves assisting businesses in reducing risks in their daily operations. As an operational risk analyst, you help companies avoid events such as product malfunctions, employee fraud, and data breaches.
- compliance risk analyst: In this role, you ensure your company complies with all the relevant laws and regulations. You prepare regular reports, conduct audits, and monitor any changes in legislation to ensure the company is up to date with all its legal obligations.
working as a risk analyst
Working as a risk analyst is an exciting career that involves reviewing markets and stocks. Let's explore the duties, work environments, and schedules of the role.
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risk analyst job description
Some of the daily activities of a risk analyst include:
- evaluating the potential risk to a business: As a risk analyst, you analyze the company data to identify the potential risks. If you work in a financial institution with investments, you identify risks associated with running the business, such as market crashes or inflation. You also quantify the uncertainty to measure its magnitude and impact on financial decisions.
- determining the impact of risks identified: When analyzing risks, you determine the departments they could affect. For instance, you assess specific hazards and potential consequences to understand the predictive results. When determining the impact of the risks, you devise a framework to compute the outcomes for various values.
- recommending how to handle the risks: As a risk analyst, you make recommendations to the decision-makers on whether to accept or decline a risk. For instance, you determine if a lender should approve or deny a loan to a borrower. If there are any operational vulnerabilities associated with a decision, it is important to clearly communicate the risks to the relevant stakeholders.
- finding risk mitigation strategies: You also help the company mitigate risks in its operations. For example, you recommend ways to reduce cost risks and the business's ability to stay within the project deadline.
- monitoring projects for risks: Part of your job involves monitoring projects and investments within the company. Your project review plan includes conducting risk reassessments and analyzing performance. Additionally, you allocate a reserve budget as a contingency measure in case anticipated risks materialize.
- communicating risk assessment results: As a risk analyst, it's important to clearly communicate risk assessment results to stakeholders and decision-makers. This includes presenting data in an easy-to-understand format and providing recommendations for mitigating potential risks.
- collaborating with other departments: Risk assessment is a collaborative effort that involves working closely with other departments within the company. This means sharing information and data, coordinating risk management strategies, and providing support when needed.
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risk analyst work environment
As a risk analyst, you work in financial institutions or investment companies. That means you spend most of the day in an office environment. You work on a computer using risk management software and spreadsheets to analyze data and generate reports. Client meetings are infrequent, but occasional presentations to stakeholders do occur. Travel is minimal unless attending workshops or conferences. Some companies allow their risk analysts to work from home, but it's usually not a regular practice.
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who are your colleagues?
Depending on your employer and the industry you work in, your colleagues might include financial managers, credit officers, and financial planners. You might also be working in close proximity to operations managers and data analysts as well as other specialists that could include information analysts, consultants, and financial analysts.
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work schedule
The typical work schedule of a risk analyst is between 35 and 40 hours a week. In a full-time position, you work the regular 9 a.m. to 5 p.m. work schedule. You also work a few evenings or occasional weekends when you have additional work. Part-time and in contract positions hours are slightly different. However, you might end up working more than 40 hours a week during busy periods or when there is an urgent project that needs your immediate attention.
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job outlook for risk analyst
As a risk analyst, you start in an entry-level support position associated with learning company-specific risk mitigation procedures. When you start as a junior risk analyst, you work your way up to a senior risk analyst position. As you gain experience, you earn a promotion to become a risk manager or a chief risk officer.
The general job outlook for risk analysts is good. For instance, the BLS projects an 8% growth for financial analysts through 2032. They predict an average of 27,400 jobs every year for this occupation. This job growth mainly results from the increased complexity of financial markets as well as the need for risk management in various industries.
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benefits of working for randstad as a risk analyst
Working through Randstad offers you a range of benefits:
- being paid weekly
- flexibility
- always a contact person you can fall back on and ask for help from
- many training opportunities
- a range of jobs in your area
Want a permanent contract? But you wonder why it would be interesting for you to work with a staffing company? A temporary job as a risk analyst is often a stepping stone to an attractive permanent job. Every year, thousands of people earn a permanent contract with great employers thanks to a temporary job found through Randstad. What's more, many companies recruit their permanent employees through Randstad too!
risk analyst education and skills
You will require educational qualifications and experience to succeed as a risk analyst. Some of the academic requirements include:
- bachelor's degree: You can become an entry-level risk analyst by pursuing a bachelor's degree. Complete an undergraduate degree in a business-related field like finance, economics, or statistics. Coursework in mathematics and accounting is also beneficial. These programs equip you with analytical, statistical modeling, and data analysis skills.
- licenses, certifications, and registrations: Depending on the area of specialization, risk analysts may require certification from a professional organization. For example, if you are a financial risk analyst, employers often ask for the Financial Industry Regulations Authority (FINRA) license.
- relevant work experience: Most employers seek candidates with previous experience in the financial industry. If you are just starting out, you can consider internships or entry-level positions to hone your skills.
- advancement: At some point, it's good to specialize in a particular type of risk analysis. For instance, if credit risk analysis interests you, it's advisable to pursue specialized certifications, like Credit Risk Certification from the Global Association of Risk Professionals and a master's degree in financial risk management or related fields.
skills and competencies
Some of the skills and qualities of a risk analyst include:
- analytical skills: As a risk analyst, you spend considerable time analyzing large data collections. You review market trends and investment portfolios and research financial data to determine risk levels.
- decision-making skills: Your job entails helping financial advisors and financial planners make business and financial decisions on behalf of their clients. You require good decision-making skills to quickly analyze the data from your clients and make a decision.
- communication skills: As a risk analyst, communication skills are valuable. You possess strong written and verbal communication skills, enabling you to communicate clearly with clients. Your ability to explain technical terms in simple language is useful when explaining the risk analysis process to clients or stakeholders.
- project management skills: As a risk analyst, you work on multiple projects and handle various aspects of finance operations. You require project management skills, such as organization and time management, to ensure you complete all projects on time.
- detail orientation: In risk analysis, even the smallest details have the potential to impact the overall outcome. As such, it's crucial for you to have a keen eye for detail and be able to spot any discrepancies or red flags in data analysis.
- computer and math skills: As a risk analyst, you spend most of your time working with data using complex mathematical and statistical models. As such, strong computer and math skills are essential for success in this field.
FAQs about working as a risk analyst
Here, you will find answers to the most frequently asked questions about risk analysts.
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what is the role of a risk analyst?
As a risk analyst, you identify and review the risks facing an organization that could affect the value of its assets or capital. Your client uses the data you collect and analyze to make informed decisions on how to mitigate or manage these risks.
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what does a typical day in the life of a risk analyst look like?
A typical day for a risk analyst involves analyzing data, creating reports, communicating with clients and stakeholders, attending meetings, and performing research on current market trends. You also spend time reviewing financial statements and identifying potential risks.
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what are the characteristics of a good risk analyst?
Good risk analysts are highly organized, detail-oriented, and analytical. They enjoy working with the concept of cause and effect and have a strong understanding of mathematical and statistical models. They are also excellent communicators, able to convey complex information in a clear and concise manner.
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what types of companies hire risk analysts?
Insurance companies, banks, trading firms, and risk management consulting firms are the top employers for risk analysts. However, just about anyone or entity that needs to manage and mitigate risk can hire a risk analyst, including government agencies, corporations, and non-profit organizations.
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is a career as a risk analyst a good choice?
Risk analysis and management is a rewarding career with promising earning potential. As businesses navigate through complex and ever-changing risks, the demand for risk analysts continues to rise. It also offers the opportunity to work in a variety of industries and develop valuable skills such as critical thinking, problem-solving, and data analysis.
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how do I find a job as a risk analyst?
Applying for a risk analyst job is easy: create a Randstad profile and search our risk analyst jobs for vacancies in your area. Then simply send us your CV. If you do not have a resume, no worries. Just check out our resume builder. This state of the art tool will help you to create your own resume. Need help with your application? Check out all our job-hunting tips!
