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How to Become a Financial Risk Analyst?

Explore the steps to become a financial risk analyst, including eligibility criteria, tasks, skills, job roles, and top colleges offering relevant courses

Published By Team SetMyCareer
Last Updated: 10 August 2024
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In this Career Outline


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Introduction to Financial Risk Analyst

“A financial risk analyst’s greatest asset is the ability to turn complex data into actionable strategies that safeguard investments.”

A Financial Risk Analyst performs financial analysis to forecast investment success, gathering and analyzing business and budgetary data. Their insights guide companies and clients in making informed equity, bonds, and investment decisions. Often specializing in specific sectors, they work in various industries like banking, insurance, and investment firms. They assess a client's financial situation, goals, risk appetite, and current assets to provide strategic recommendations.


Steps to Become a Financial Risk Analyst:

Step-1

Pursue an undergraduate degree in finance, economics, or a related field.

Step-2

Intern or work in financial roles to gain practical experience and insights into risk management.

Step-3

Consider a postgraduate degree or certification in risk management or financial analysis.

Step-4

Obtain professional certifications such as the Financial Risk Manager (FRM) or Chartered Financial Analyst (CFA).

Step-5

Learn to use financial modeling and statistical software tools.

Step-6

Enhance your ability to analyze data and assess financial risks.

Step-7

Keep up with industry trends and regulatory changes to maintain your expertise.

Eligibility Criteria

Eligibility Criteria Description
Eligibility Must possess at least 50% aggregate from a recognized institution (PUC/CBSE/ICSE/ISC, etc.)
Educational Background High school diploma or equivalent.
Undergraduate Degree A Bachelor's degree in Computer Science, Business Administration, or Statistics is beneficial.
Postgraduate Degree MBA in Risk Management for advanced knowledge and career opportunities.
Entrance Exams Valid score in entrance exams such as CAT, MAT, CMAT, or other relevant exams.

  • Have at least 50% aggregate in 12th grade from any recognized board (PUC/CBSE/ICSE/ISC). Note that cut-off percentages vary by college.
  • Obtain a degree, diploma, or certification from a recognized institution to become a Business Intelligence Analyst.
  • A Bachelor’s degree in Computer Science, Business Administration, or Statistics is beneficial for a career as a Financial Risk Analyst. Hands-on experience or specialized courses in Risk Management are also needed.
  • An MBA in Risk Management can provide advanced knowledge and enhance career opportunities.

  • Valid score in Entrance exams after 12th such as CAT, MAT, CMAT, or other relevant exams; some institutions may have their own entrance tests for specialized courses in Risk Management.

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Tasks to perform as a Financial Risk Analyst:

Identify important risks and mitigation variables associated with possible acquisitions, such as asset kinds and valuations, legal and ownership structures, competent credentials, client bases, and market segments.

Statistics on pricing, yield, stability, future investment-risk patterns, economic impacts, and other elements impacting investment programmes are interpreted.

Determine the long-term development and profitability of new goods or processes in terms of their ecological effect.

Information on pricing, return, security, long term investment patterns, economic impacts, and other elements impacting investment programmes are interpreted.

Engage with customers to address questions about risk sensitivity, economic possibilities, and value-at-risk assessments, among other topics.

Knowledge & Skills Required

Financial Risk Analysts must possess a wide array of skills to succeed in their careers. Here are the key knowledge areas and skills needed to excel in this field:

Knowledge Required
Understanding of risk assessment techniques, risk identification, and risk mitigation strategies. Knowledge of financial regulations, industry standards, and compliance requirements relevant to risk management.
Ability to analyze financial statements, perform ratio analysis, and assess financial health and performance. Understanding of macroeconomic and microeconomic principles that affect financial markets and risk exposure.
Proficiency in statistical methods, financial modeling, and the use of quantitative tools and techniques for risk assessment. Knowledge of investment products, portfolio management, and the impact of market fluctuations on financial risk.
Skills Required
Quantitative Analysis Risk Management
Financial Modeling Data Analysis
Knowledge of Financial Markets Regulatory Knowledge

Understanding What are soft skills? and why is it important,as they complement technical abilities and enhance overall performance in the field of Financial Risk Analyst.

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Job roles offered for a Financial Risk Analyst:

Once you acquire the qualifications to become a Financial Risk Analyst, you have various career paths to explore:

Financial Risk Analyst:

This role involves analyzing financial data to forecast investment success. Financial Risk Analysts gather and evaluate business and budgetary information, aiding companies and consumers in making informed financial decisions. They often specialize in specific stock sectors, providing crucial insights to businesses, investment firms, and financial institutions.

Financial Analyst:

Financial Analysts assess a company’s financial health, analyze market trends, and create forecasts. They support decision-making by providing insights on economic conditions and market developments. Their work includes evaluating cost-effectiveness of initiatives and developing financial models. Analysts typically have backgrounds in business, economics, or accounting.

Financial Quantitative Analyst::

These analysts focus on investment performance and analyze data to identify profitable opportunities. They provide actionable advice on investments and must simplify complex data for clients. They often specialize in specific sectors or markets, such as commodities or foreign currencies.

Risk Analyst:

Risk Analysts evaluate financial records and economic conditions to assess risks associated with business decisions. They work primarily in banks and insurance firms but can be employed by any organization handling substantial financial transactions. With relevant experience and internships, Risk Analysts can progress to senior management roles.

Chief Investment Officer (CIO):

CIOs oversee a company’s investment strategies, developing both short- and long-term plans. They lead teams to manage investments, analyze pension funds, and allocate resources. CIOs work closely with boards of directors to maximize shareholder returns and may need to travel for meetings and negotiations.

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With the wide variety of careers and job roles available, pinpointing the best option for you can be challenging. Thorough analysis and dedicated sessions can provide clarity on what to study, which industry and role to pursue, and the most suitable career path to follow.

Career Opportunities for a Financial Risk Analyst:

Financial Risk Analysts can opt for various fields of work in the companies listed below:

IBM Morningstar Bank of America
Shell Baker Hughes NatWest Group
Oracle JP Morgan Chase & Co. HSBC
Cisco

Colleges offering courses for Financial Risk Analyst:

Here is the list of colleges offering the Best courses after 12th:

St Xaviers College, Ranchi KJ Somaiya College of Science and Commerce, Mumbai
PSGR Krishnammal College for Women, Coimbatore Sri Krishna Arts and Science College, Coimbatore
JBIMS Mumbai - Jamnalal Bajaj Institute of Management Studies School of Distance Education, Andhra University, Visakhapatnam
BJB Autonomous College, Bhubaneswar Karmaveer Bhaurao Patil College, Vashi
Samrat Prithviraj Chauhan Government College, Ajmer Serampore College, Serampore

End Note

Starting on a career as a financial risk analyst can lead you to a dynamic and rewarding professional journey. If you're ready to dive into the world of finance and risk management, SetMyCareer is here to guide you with Career counselling after graduation along your career goals. Connect with our experts today to start your journey toward becoming a financial risk analyst!