Top Risk Management Career Opportunities to Break Into the Industry

Risk is everywhere in business. The abundance of risk management career opportunities reflects the ongoing need for qualified professionals who can help companies navigate and prosper despite uncertainty. According to the GARP Risk Careers Survey 2021 report on the state of the risk profession, organizations and financial institutions around the world are continuing to seek out individuals with the skills to evaluate and address risk.

Over half of survey respondents, 54%, expected their organizations' risk departments to grow in 2021. While a proportion of the hiring managers surveyed were looking to source generalists, indicating a global need for professionals who can practice across a variety of areas, certain specializations and emerging risk areas also rose as top opportunities for those entering the field.

Credit Risk

About 26% of the hiring managers surveyed indicated that they were looking to source credit risk management roles within their organizations. The credit risk function in an organization is usually tasked with some form of the following:

• Determining the creditworthiness of a customer.
• Designing credit terms based on a borrower's credit profile.
• Establishing ways to hedge against losses in case of default.
• Evaluating account performance over time to see if actions need to be taken to mitigate losses in case of default or non-payment.

Credit risk managers may carry out these responsibilities differently, depending on the industry and company, but most will use technology — from spreadsheets to algorithmic modeling. Innovations in big data and machine learning have become integral to this area, helping to uncover nonlinear relationships between the explanatory variables and default risk. Credit managers, as a result, can use a broader set of variables to predict and manage losses.

Candidates with an understanding of finance and economics, as well as strong quantitative and programming skills, may find themselves in high demand. As robust credit risk management strategies can help financial institutions, technology firms, and even manufacturers reach capital return targets, it's not difficult to understand why this is a popular risk area.

Market Risk

Nearly 21% of hiring manager respondents indicated that they were looking for market risk candidates. These professionals are experts in operational areas such as trading, purchasing, and treasury operations. The risk they assess can take different forms, including:

• Interest rate risk.
• Equity risk (security price volatility).
• Foreign exchange risk.
• Commodity price risk.

Operational Risk

Operational risk captures the human element of risk and involves monitoring how failures in the internal active decisions, processes, and practices of an organization can cause losses. Operational threats could look like critical system or equipment breakdowns, fraud and theft, supply chain or vendor issues, or cybersecurity breaches.

About 20% of hiring managers surveyed by GARP expected operational risk, a relatively new field area, to be targeted for additional staffing. Risk professionals in this area can find themselves tackling a range of business challenges to mitigate losses and execute business strategies.

Audit and Compliance

Audit and compliance risk deals with monitoring an organization's compliance with applicable regulations and industry standards. Changing regulations and an increasing emphasis on enforcement have amplified the need for an evidence-based approach. Audit and compliance risk professionals keep an eye on threats of non-compliance in one of three main areas: regulatory, industry, and internal. Managing this type of risk effectively can help companies avoid significant legal, monetary, and reputational penalties. Nearly 18% of respondents in a hiring position said they expected their organizations to target audit/compliance risk as an area for expansion.

Outlook on Emerging Risk Areas

Businesses have always faced risk, but professionals who have the knowledge and skills to tackle new and emerging challenges will find themselves in demand. For instance, climate change can bring uncertainty to the balance sheet, and in the years to come, it is expected to impact economies around the world. Risk managers may be called upon to help deal with that uncertainty by planning ways to manage disruptions and finding alternative profit solutions. GARP survey respondents reported plans to increase staffing in related areas, including climate risk and sustainability (13.8%) and energy and commodities risk (4.5%).

At the same time, rapidly evolving technologies like artificial intelligence and automation have delivered new opportunities for companies to uncover efficiency and profit. However, as technology becomes more enmeshed in business operations and profits, new threats tied to technology are emerging as well. Like climate risk managers, technology risk managers can find themselves looking at the full spectrum of business risk to deal with concerns around data security, integrity, and recovery as well as compliance with regulatory and industry standards. Related risk management areas that could get a boost in staffing in 2021, according to GARP members, include technology/AI/machine learning and data risk management (18.3%) and cybersecurity (14.2%).

For those looking to enter the field of risk management, several career paths may be suited to your skills and interests and a host of emerging risk areas will continue to drive the need for professionals who can help manage the evolving global business environment.

To learn more about the current trends and opportunities within the risk management field, download the full GARP Risk Careers Survey 2021 report.