Operational risk is a financial position that banks and other finance-centred fields use to mitigate the risk when it comes to investing so as to offset financial losses. This could be through deliberate fraud or professional negligence, or simply by clerical error. In any event, operational risk involves assessing the controls that an organisation has implemented, in order to determine whether or not they are effective. Other forms of operational risk are found by information systems, especially when they fail – computer errors are often behind these “clerical mistakes” that risk managers must assess.
The ideal candidate for operational risk management jobs.
People in operational risk management jobs must be analytical, logical personnel as their task is to embed risk control assessments within an organisation. This usually involves the monitoring of risk policies and tools in order to determine their effectiveness within a particular organisation. They must also develop risk management practices that are in line with the policies of the organisation and the regulatory framework of the financial industry.
The role therefore invariably requires a team player as risk managers will advise senior management on any operational risks they encounter and the suggested course of action to address these risks. Furthermore, risk managers will also need to have a leadership presence about them as they will need to train and motivate staff to adopt new risk management practices. This could address personnel at different levels; from entry-level customer facing personnel, to IT staff, through to senior managers.
Many banks and other financial institutions use spreadsheet and database software to model techniques and record sensitive financial information, which means risk assessors will need to be particularly skilled in the use of these software packages. The Microsoft Office Specialist (MOS) qualification from Microsoft is usually cited as one of the more popular certifications to take when it comes to these applications, since Excel and Access are commonly used in a commercial setting.
Similarly, risk managers should be educated to degree level in some numerical discipline: accountancy, mathematics, business studies, and economics are all particularly advantageous for prospective candidates. It is also wise to possess a professional qualification, such as The Advanced Certificate in Operational Risk by CISI.
Previous operations experience is usually preferred, but experience in dealing with a position calling for strong analytical, managerial, and negotiation skills can sometimes be substituted where operational experience has not been gained by the candidate.
Risk managers will need to be fluid communicators as they will need to address personnel at all levels of hierarchical importance. They will need to adapt their way of speaking to suit the different skill sets that each department brings so as to ensure that risk policies are implemented effectively and with complete understanding by the staff.
Similarly, they must have an agreeable demeanour since they will usually need to use their charisma to implement rather difficult and sometimes time-consuming policies that greatly alter the way operations work. However, this is where their strong persuasive communication skills will come into play, too.
Employment prospects for operational risk managers.
Risk management enjoys quite favourable conditions at the present time with many vacancies being available in the southeast and other major cities like Birmingham, Leeds, and Edinburgh. Starting salaries vary according to where the candidate is working, but it is not unusual to see figures starting around £40,000 and increasing to around £50,000 depending on the experience and qualifications required to take on the role.