Of the businesses that fail, 82 percent attribute their failure to some form of financial challenge. Clearly, businesses face a myriad of financial risks, and knowing how to handle them can make the difference between success and failure.
One of the most impactful things a business can do is to hire a financial risk manager. This is why these professionals are in high demand.
If you’re looking to pursue a career as a financial risk manager, you’ve made the right decision. But what is financial risk management exactly? What will your job involve?
In this article, we’re digging deeper into financial risk management and telling you why you should obtain a financial risk management certification.
What Is Financial Risk Management?
Financial risk management is the process of identifying and analyzing the financial threats an organization faces. It also involves establishing how these threats will affect the organization’s performance, as well as determining what can be done to mitigate those risks.
Financial risk managers are in charge of this process. In big organizations, such as banks and investment firms, these professionals typically lead full-fledged risk management departments. As such, they have additional duties, such as recruiting and supervising a team of risk management specialists.
How to Become a Financial Risk Manager
Now that you know what a financial risk manager does, you’re probably wondering what it takes to become one.
The first step to becoming a financial risk manager is to secure a bachelor’s degree in finance, economics, accounting, business administration, or a closely related field. However, it’s a degree in finance that will give you the best preparation for this job.
Some aspiring financial risk managers go ahead and pursue a master’s degree in financial risk management, but it’s possible to find an entry-level job right after earning a bachelor’s degree.
Of all the credentials you can secure, though, none is more valuable to employers than the Financial Risk Manager Certification. Offered by the Global Association of Risk Professionals, the FRM credential is the premier certification for financial risk management professionals. It increases your value, thereby making you an attractive candidate for employment in the top firms.
You must apply to the GARP when you want to secure the certification. To qualify, you need to have at least two years of experience working in a financial risk management environment.
You must also successfully complete a two-part examination. Check out this post to learn more about how to prepare for this examination.
Is the FRM Certification Right for You?
This is a no-brainer, really.
If you want to become a sought-after financial risk manager, the FRM credential is a must-have.
Get Started in Financial Risk Management
To recap, what is financial risk management? It’s identifying and managing the threats against a company’s earning capacity. It’s a highly rewarding career, but you need to be ready to do what it takes to become a financial risk manager.
All the best and keep reading our blog for more tips and insights.