what is a risk analyst?

As a risk analyst, your job involves identifying and monitoring risks associated with business decisions. You analyze the risks to a company's assets, capital, and investments using statistical data. The information you obtain puts you in a better position to provide strategic advice to businesses on minimizing uncertainty and increasing profitability.

Your job also entails developing contingency plans for the company or clients that you work for. These are plans designed to minimize the negative impact of unfavorable economic conditions, such as changes in government policy or market crashes. For this reason, staying up-to-date with market trends, regulations, and economic changes is crucial for a risk analyst.

On top of that, your job includes educating employees on risk-conscious behaviors, identifying potential risks, and implementing strategies to mitigate them. As a risk analyst, you are essentially the "guardian" of a company's financial health and stability.

Would working as a risk analyst suit your skillset, interests, and career goals? Then, read on to find out what competencies and qualifications you need to thrive in a risk analyst role.

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average risk analyst salary

According to the U.S. Bureau of Labor Statistics (BLS), the median yearly salary for risk analysts is about $102,120. However, the starting salary for this role can be as low as $59,510 or $28.61 per hour. Experienced risk analysts make upwards of $175,720 annually. Factors such as education level, industry, and location may also impact salary levels.

factors that increase risk analyst salary

The salary of risk analysts depends on their experience and qualifications. In order to earn more, it's essential to have the appropriate relevant accreditations. There are five basic risk analyst certifications: Certified Risk Manager (CRM), Financial Risk Manager (FRM), Professional Risk Manager (PRM), and Chartered Enterprise Risk Analyst (CERA).

Furthermore, it is beneficial to collaborate with diverse industries. Each industry presents varying levels of risk. Gaining experience in roles like financial analysis, auditing, or compliance equips you with a versatile skillset, making you a valuable asset to prospective employers.

Another factor that helps boost risk analyst's compensation is the company they work for. If you work for a big financial institution or company, your pay is likely to be higher due to the complexity of tasks and the team you manage. Smaller companies may not have the resources to offer competitive salaries, but they are less demanding than their counterparts. If possible, you could use your extra time to earn freelance income.

Location also plays a big role in salary levels for risk analysts. In major cities like New York and San Francisco, the cost of living is higher; therefore, salaries tend to be higher as well.

Networking is another important factor in advancing your career as a risk analyst. Joining professional organizations and attending conferences can help you meet other professionals in the field and learn about new opportunities.

Finally, career advancement and professional development opportunities are crucial in increasing a risk analyst's salary. By keeping up with the latest developments in risk management, you stand out as a valuable asset to your company and have more leverage in negotiating for a higher salary.

Wondering what you can earn as a risk analyst? Find out immediately with the Randstad salary checker! You can quickly and easily see what the average salary of a risk analyst is.

Womale in a black blazer, sitting at her desk.
Womale in a black blazer, sitting at her desk.
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types of risk analysts

The types of risk analysts depend on the area of specialization. These include:

  • credit risk analyst: As a credit risk analyst, you determine the ability of a client to repay a loan. You work in an investment bank, mortgage firm, or insurance company to determine the risk of giving out a loan to a client. You analyze financial data and the creditworthiness of clients.
  • regulatory risk analyst: As a regulatory risk analyst, you analyze policy or legislation changes and their impact on the company. For instance, you determine the impact that disciplinary actions and fines on loans have on the financial institution's reputation.
  • market risk analyst: As a risk analyst, you analyze and review the stock market to check your company's share price. You check the economic trends and financial data to identify the risks to the company's assets and investments.
  • operational risk analyst: This niche involves assisting businesses in reducing risks in their daily operations. As an operational risk analyst, you help companies avoid events such as product malfunctions, employee fraud, and data breaches.
  • compliance risk analyst: In this role, you ensure your company complies with all the relevant laws and regulations. You prepare regular reports, conduct audits, and monitor any changes in legislation to ensure the company is up to date with all its legal obligations.
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working as a risk analyst

Working as a risk analyst is an exciting career that involves reviewing markets and stocks. Let's explore the duties, work environments, and schedules of the role.

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risk analyst education and skills

You will require educational qualifications and experience to succeed as a risk analyst. Some of the academic requirements include:

  • bachelor's degree: You can become an entry-level risk analyst by pursuing a bachelor's degree. Complete an undergraduate degree in a business-related field like finance, economics, or statistics. Coursework in mathematics and accounting is also beneficial. These programs equip you with analytical, statistical modeling, and data analysis skills.
  • licenses, certifications, and registrations: Depending on the area of specialization, risk analysts may require certification from a professional organization. For example, if you are a financial risk analyst, employers often ask for the Financial Industry Regulations Authority (FINRA) license.
  • relevant work experience: Most employers seek candidates with previous experience in the financial industry. If you are just starting out, you can consider internships or entry-level positions to hone your skills.
  • advancement: At some point, it's good to specialize in a particular type of risk analysis. For instance, if credit risk analysis interests you, it's advisable to pursue specialized certifications, like Credit Risk Certification from the Global Association of Risk Professionals and a master's degree in financial risk management or related fields.

skills and competencies

Some of the skills and qualities of a risk analyst include:

  • analytical skills: As a risk analyst, you spend considerable time analyzing large data collections. You review market trends and investment portfolios and research financial data to determine risk levels.
  • decision-making skills: Your job entails helping financial advisors and financial planners make business and financial decisions on behalf of their clients. You require good decision-making skills to quickly analyze the data from your clients and make a decision.
  • communication skills: As a risk analyst, communication skills are valuable. You possess strong written and verbal communication skills, enabling you to communicate clearly with clients. Your ability to explain technical terms in simple language is useful when explaining the risk analysis process to clients or stakeholders.
  • project management skills: As a risk analyst, you work on multiple projects and handle various aspects of finance operations. You require project management skills, such as organization and time management, to ensure you complete all projects on time.
  • detail orientation: In risk analysis, even the smallest details have the potential to impact the overall outcome. As such, it's crucial for you to have a keen eye for detail and be able to spot any discrepancies or red flags in data analysis.
  • computer and math skills: As a risk analyst, you spend most of your time working with data using complex mathematical and statistical models. As such, strong computer and math skills are essential for success in this field.
female sitting in an office
female sitting in an office
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FAQs about working as a risk analyst

Here, you will find answers to the most frequently asked questions about risk analysts.

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