While Data and Tech Skills Are in Demand, Analysis and Communication Still Matter

Even as data management and technology skills are seen as increasingly essential for risk managers, observers of the profession and of recruiting trends say that longstanding analysis and communication skills remain highly prized.

The “upskilling” has accompanied the fact that “the pace of risks as well as their complexity and interconnectivity are moving faster than ever,” said Steve Culp, senior managing director, global risk and compliance lead at Accenture. In the firm’s most recent Global Risk Management Study, 77% of responding risk leaders said new interconnected risks were emerging at a more rapid pace than ever before. A current case in point is the Ukraine conflict and its economic, supply chain and operational ripple effects, down to compliance risks in the role banks play in sanctions enforcement.

“When we look at the risk profession today compared to a decade ago, we see a lot more blending or pulling from the technology areas, particularly those involving data and analytics, to try to get more insight,” Culp observed.

Steve Culp, Accenture

Data has become a key tool, said Carl Gargula, executive vice president of recruiting firm Risk Talent Associates. Companies are looking for risk professionals skilled in processing and modeling with artificial intelligence and other advanced methods.

In the evolving, interconnected-risk landscape, such as where climate is concerned, financial services firms are looking for “executives with that quantitative- and model-risk focus, on the data points and science,” said Robert Iommazzo, managing partner and co-founder of search firm SEBA International.

“Not Independent Events”

Still, risk professionals must consider dimensions including finance, accounting and economics, to determine how risks may cascade from one domain or part of an organization to another. For example, Culp said, the pandemic catalyzed the Great Resignation and, in turn, labor shortages that disrupted supply chains and helped fuel inflation, leading to concerns about interest rate hikes and subsequent market volatility.

“All these things, which ultimately land on corporate balance sheets and impact executives’ decisions, are not independent events,” Culp said. “They’re all very interconnected and they’re continuing to change the risk landscape by the moment.”

Time-tested risk management skills remain in demand to interpret growing volumes of data and weigh priorities, Gargula said. Noting that increases in a bank’s credit card issuance will bring more fraud and credit losses along with the revenue, he said, “Organizations are looking for that statistical brainpower that can be brought in to help on these types of issues. And the risk people will have to find that balance.”

That’s true at the leadership level and throughout risk departments, Gargula added. Junior-level risk professionals, with five to seven years of experience processing and analyzing data, are seeing the biggest pay bumps, he said, with base salary increases of 20% to 25%.

When he was recently searching for such a hire for a major bank, executives from three other banks aware of his search asked him to send candidates their way. “They’re all looking for the same type of person,” Gargula remarked.

Carl Gargula, Risk Talent Associates

Iommazzo also sees compensation rising at junior- and mid-level. Even senior risk professionals have some negotiating leverage, "but broadly, you're not seeing huge increases."

Cross-Sector Opportunity

The biggest numbers of risk management jobs are in financial services, but risk people and data-related skills are wanted across business sectors, and that demand is expected to increase. According to the 10th annual Executive Perspectives on Top Risks report from Protiviti and the Enterprise Risk Management Initiative of North Carolina State University’s Poole College of Management, adoption of digital technologies and applicable employee skills is the fourth top risk for 2022. It is seen rising to No. 1 in 10 years.

Succession challenges and the ability to attract and retain top talent ranks second both currently and in the 10-year expectation.

Related to growing demand for data and analytic skills, not just in the risk department but across the organization, is the digital transformation trend affecting the entire business world. It entails large-scale, complex multi-department projects for which risk professionals with relevant experience are highly valued.

Robert Iommazzo, SEBA International

“There are consultative and strategic aspects to it, and definitely also a commercial bent, so risk professionals with experience running a P&L are in high demand,” Iommazzo said, adding that such experience appeals to business leaders intent on solving problems and seeing results.

“You can put all the best risk management policies in place, but if the business doesn’t support them, they won't reduce risk,” he said.

Readiness Gap

Yet many respondents in Accenture’s survey were not convinced of their teams’ tech readiness: 49% deemed them “fully capable” of assessing risks associated with cloud adoption, and the percentages went lower for artificial intelligence (34%), blockchain (32%) and robotic process automation (28%).

“We’re increasingly finding that risk professionals are not as deeply engaged with those technologies to properly challenge the business and set up mitigation strategies,” Culp said. That can lead to unintended consequences, or inaction that hinders a company’s competitiveness, the Accenture expert added.

Another, more traditional strength of risk professionals, one that sets them apart from procedural functions such as accounting, according to Culp, is an ability to ask insightful questions rooted in strong analytics and personal experience. Risk is by definition “an inquisitive space,” he said, less about predicting problems than preparing the business to deal with them when they occur.

Both inquiring and explaining require effective communication, which remains a prized skill, Gargula said, for informing senior management on risks’ strategic implications and for letting all employees know what to be on alert for.

Effective communication is a way for risk professionals to demonstrate their value to the organization, such as reporting in dollars the payback from anti-fraud efforts.

“When you’re a cost center,” Gargula said, “it’s very important to constantly add value in a way that’s quantifiable.”