If you aim to hone the designation of a financial risk manager, you need certifications that can set you apart in the finance industry. Major multi-national and corporations employ FRM certificate holders because they have attained a “gold standard” in the industry. But, what does a financial risk manager exactly do? What are his roles and responsibilities? Let us delve a little deeper into the accountabilities.

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What Does a Financial Risk Manager Do?


A financial risk manager identifies and analyzes the area of potential risks threatening the success of an organization and provides measures to mitigate those factors. As a financial risk manager, one is responsible for forecasting changes in future market trends, as well as predicting the cost of these changes to the organization. The financial manager is also responsible for recommending risk coverages, developing strategies for minimizing said risks in order to maximize rewards.


There are high degrees of specialization in this domain. A financial risk manager may work in sales, trading, marketing, private banking, or financial services. For that, he/she has to specialize in one of the following areas irrespective of whether the candidate is opting to do a financial risk management course online or from a university:-

  • Credit Risks
  • Market Risks
  • Operational Risks
  • Regulatory Risks


Also Read : Practical Tips for Managing Financial Risk


Roles of Financial Risk Managers


One of the many roles of a financial risk manager is to formalize the process of risk management and taking imperative decisions enabling the success of the organization. The roles of financial risk manager can be divided into 4 major categories:-


  • Credit Risk Manager: They are responsible to analyze the potential risks to the company posed by its customers not paying for goods or services or any defaults in payments.
  • Market Risk Specialists: They analyze the external factors of risks that may affect the market position of the company.
  • Operational Risk Managers: They look at the risk factors related to failed internal processes, system breakdowns and employee fraud.
  • Regulatory Risk Managers: They study new and proposed laws to determine how they can affect the organization and to ensure full compliance.


Responsibilities of a Financial Risk Manager


A financial risk manager is typically responsible for:

  • Making recommendations to subdue risk factors.
  • Working with internal teams to calculate the risk associated with specific transactions.
  • Liaising with stakeholders and board members.
  • Forecasting and analyzing market trends.
  • Conducting research and analysis to assess the severity of the risk.
  • Developing models and contingency plans to deal with potential threats.
  • Using financial and statistical tools and software to evaluate risk.
  • Presenting the results and findings of the analysis and making appropriate recommendations for improvement.


Also Read : 5 Reasons Why a Financial Risk Management Course is the Need of the Hour


What Do You Need to Build a Career in Financial Management?


While it is still possible to work your way up to a risk management role from a bachelor’s degree, candidates with advanced certifications and qualifications are increasingly sought for top management positions. There are many Ed-tech platforms that are offering advanced financial risk management courses online. These advanced financial risk management courses online are designed to innovate the procedures and practices to help you improve the handling of systemic risk and build a better career in the field of finance.


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