Managing financial risk is a key component of running any successful business. After all, you won’t be able to optimize revenue if there are multiple areas of your company where you are losing money.
For those who wish to become a financial risk manager, not everybody understands how much money they can expect to make. Let’s explore what you should keep in mind about the financial risk manager salary and the different occupations you may encounter.
Regulatory Risk Analyst
As the name would imply, those in this profession are in charge of determining the impact that certain regulations will have on their business.
This also includes new and proposed laws. Part of their role also involves researching how similar laws affect companies like theirs. Under some circumstances, they might also need to research how businesses in other states or regions navigate these laws.
This role is crucial within any organization, as breaching industry regulations can come with hefty legal consequences. For example, those who do not comply with HIPAA standards could have legal action taken against them by the individuals affected.
Market Risk Analyst
This occupation is a bit more straightforward. Market risk analysts do just that — analyze the inherent risk of certain market decisions.
This often involves researching current market trends and assessing the state of the proposed market. Those in this role are able to assist other financial employees in the company in making pivotal decisions for the organization.
Their reports will often dictate whether or not a particular investment should be made, a market should be tapped into, or a product should be launched. Without proper market risk analysis, there’s a strong chance that you will encounter financial difficulties in the future. In some scenarios, this could be virtually impossible to recover from.
Operational Risk Manager
Most financial risk managers focus on exterior concerns. A perfect example is how a regulatory risk analyst assesses how laws will affect the business. On the other hand, operational risk managers take a look at how a company is run from within.
They are in charge of finding weak points in the internal operations and coming up with solutions for them. For instance, there may be a disparity between how much money is allocated to certain teams in the organization. If one group of employees doesn’t have a sufficient budget, they won’t be able to perform their roles appropriately.
Making these assessments will allow the company to avoid financial pitfalls that could cost hundreds of thousands of dollars.
Credit Risk Manager
Organizations that assess credit scores need a baseline value to reference.
To clarify, there needs to be a threshold for credit scores when it comes to the minimum viable value. Without the proper credit risk management research, organizations wouldn’t know how a particular consumer’s credit score affects them. This is why certain lenders require a minimum credit score in order to consider a borrower as qualified.
Put simply, a credit risk manager helps a company determine the risk associated with financing under different conditions. Without measures like these in place, businesses would essentially be rolling the dice with each borrower.
If the borrower defaults, makes late payments, etc., it could negatively affect revenue.
General Risk Analyst
Risk analysts are tasked with assessing investment portfolios. These portfolios also typically involve international businesses or currencies.
Due to the nature of this job, many people are often more familiar with it than other roles. It’s also important to note that cash bonuses are frequently available for risk analysts.
It’s not unheard of for a hard-working risk analyst to make an additional $10,000 per year. Of course, this will depend on the region you work in. It will also depend on the company you work for.
Regardless, it’s one of the higher-end financial risk manager salaries.
Chief Risk Officer
It shouldn’t come as a surprise that most people don’t start out as executives. There’s also no guarantee that you will eventually make it to this position.
However, diligent risk managers always have the opportunity to eventually become chief risk officers. This is, of course, if they maneuver correctly through their industry.
These professionals are responsible for assessing many different risks to the company’s capital. These could be in the form of regulatory, competitive, or technological threats. Executives are compensated differently than employees, and how much money you make will depend on the organization you work for.
Under the right circumstances, chief risk officers can make well into the six figures.
So, How Much Can I Expect to Make?
There is a handful of factors at play here.
First, it will depend on your specific role. The region in which you work in the size of your organization will also influence this amount. On average, however, most people find they could make anywhere from $60,000-$100,000 per year.
Want to learn more about how to become a financial risk manager? You’ll need a comprehensive FRM syllabus before you apply for your FRM certification.
You can check out this resource for more info on FRM exam tips and what it takes to be a certified FRM.
Financial Risk Manager Salary Has High Potential
Under the right circumstances, you could find yourself making a substantial amount of money each year. So, keep the above info about the financial risk manager salary in mind in order to make the decision that is best for you and your future.
Looking for more tips that can help you out later on? Check out the rest of our blog for plenty of more useful information.
