Financial risk analysts identify and analyse the areas of potential risk threatening the assets, earning capacity or success of organisations in the industrial, commercial or public sector. They are sometimes called risk managers, risk technicians or risk surveyors. They have the responsibility of forecasting cost to the organisation and predicting change and future trends.
There are high degrees of specialisation within the profession. Risk analysts may work in sales, origination, trading, marketing, financial services or private banking, specialising in:
Financial institutions are required to manage market and credit risks daily. Risk analysts are therefore increasingly tasked with responsibilities touching all four key areas.
An alternative but similar role to financial risk analyst is that of the credit analyst in which the creditworthiness of a business is calculated and a probability of payment determined. Risk analysis is considered by many to be advanced credit analysis.
- Operational risk analysts look at the likelihood of risky events, such as system breakdowns and employee fraud.
- Regulatory risk analysts look at the impact on the company of new legislation.
- Market risk specialists analyse the risk that outside factors may affect the share price or the market. They typically work closely with traders to calculate the risk associated with specific trading transactions.
- Credit risk specialists analyse the risk to the company of its customers not paying for goods or services or defaulting on loans.