What Does an Operational Risk Manager Do?

Operational risk management is a relatively new field of study that focuses on identifying, measuring and mitigating risks related to the operations of an organization. Operational risk managers are responsible for developing strategies to ensure that their company can continue to operate as normal in the event of a disaster or other unforeseen circumstance.

Operational risk managers may also be tasked with overseeing the implementation of these strategies. This might include conducting training sessions for employees so they know how to respond appropriately in an emergency situation, creating checklists for responders to follow during an incident, etc.

Operational Risk Manager Job Duties

Operational risk managers have a wide range of responsibilities, which can include:

• Monitoring changes in laws, regulations, and industry best practices that could impact operational risk management
• Monitoring client portfolios for signs of risk exposure or loss to ensure compliance with company policies
• Participating in strategic planning activities such as identifying new business opportunities or assessing potential threats to business operations
• Reviewing business processes to identify areas of potential improvement or weakness in risk management controls
• Working with senior management to develop and implement risk management policies and procedures
• Conducting internal audits to evaluate compliance with internal controls and regulatory requirements
• Developing policies and procedures for identifying, assessing, managing, and reporting on operational risks within an organization
• Assessing the potential impact of operational risks on the organization’s ability to meet its goals and objectives
• Conducting regular training sessions on operational risk management best practices for employees within departments that are most exposed to risk

Operational Risk Manager Salary & Outlook

Operational risk managers’ salaries vary depending on their level of education, years of experience, and the size and industry of the company. They may also earn additional compensation in the form of bonuses.

• Median Annual Salary: $115,000 ($55.29/hour)
• Top 10% Annual Salary: $172,000 ($82.69/hour)

The employment of operational risk managers is expected to grow at an average rate over the next decade.

Organizations will continue to hire operational risk managers to help them understand and manage risks associated with their operations. In addition, organizations will need to hire these managers to comply with regulations related to operational risk.

Related: Operational Risk Manager Interview Questions and Answers

Operational Risk Manager Job Requirements

The following are some of the requirements for obtaining a position as an operational risk manager:

Education: Most employers require operational risk managers to have a bachelor’s degree in finance, accounting or another closely related field. Some employers prefer to hire candidates with a master’s degree in risk management or a related field.

Training & Experience: Operational risk managers typically receive on-the-job training. This training may include learning about the company’s specific policies and procedures, as well as the software and technology they use.

Certifications & Licenses: Certifications can offer proof of an individual’s qualifications to current and future employers, validate an individual’s expertise and increase an individual’s earning potential.

Operational Risk Manager Skills

Operational risk managers need the following skills in order to be successful:

Communication: Operations risk managers communicate with a variety of stakeholders, including other risk managers, finance professionals, compliance officers and other members of the company’s leadership team. They also communicate with employees throughout the organization, explaining complex financial concepts and providing guidance on how to mitigate risks. Effective communication skills can help operations risk managers convey information clearly and answer questions to help employees make informed decisions.

Risk management knowledge and skills: Risk managers should have a thorough understanding of the processes and procedures of their organization’s operations. They should be able to identify potential risks and develop strategies to mitigate them. They should also be able to identify the most effective strategies for reducing risks and be able to evaluate the success of their mitigation strategies.

Critical thinking: Critical thinking is the ability to analyze a situation and determine the best course of action. Operations risk managers use critical thinking skills to make decisions about how to handle potential risks. For example, if a company experiences a cyberattack, an operations risk manager might use critical thinking to decide whether to pay the ransom to recover the stolen data or try to recover the data without paying.

Problem-solving: Problem-solving skills allow you to identify and develop solutions to challenges. As an operations risk manager, you may be responsible for finding solutions to operational risks that affect a company’s operations. For example, if a company experiences a data breach, you may be responsible for finding ways to prevent future breaches and mitigate the damage caused by the breach.

Research: Operations risk managers research topics related to their work, such as the history of a company or the current regulations in place. They also research potential solutions to risks, such as how to mitigate a security breach or how to handle a natural disaster. This skill helps them make informed decisions and develop strategies that address potential risks.

Operational Risk Manager Work Environment

Operational risk managers work in a variety of settings, including banks, insurance companies, and other financial institutions. They typically work regular business hours, although they may be required to work overtime to meet deadlines or to respond to emergencies. Operational risk managers may travel to meet with clients or to attend conferences. They work closely with other managers and professionals, such as financial analysts and auditors, to identify and assess risks. They must be able to effectively communicate their findings to senior management in order to develop and implement risk management strategies.

Operational Risk Manager Trends

Here are three trends influencing how operational risk managers work. Operational risk managers will need to stay up-to-date on these developments to keep their skills relevant and maintain a competitive advantage in the workplace.

The Need for a More Holistic Approach to Risk Management

Risk management is becoming increasingly important in today’s business world, as companies are realizing the need to protect themselves from potential losses. However, many businesses are still taking a more traditional approach to risk management, which focuses on individual risks rather than the overall company risk profile.

Operational risk managers can take advantage of this trend by developing a more holistic approach to risk management. This means looking beyond individual risks and assessing the overall risk profile of the company. It also means developing strategies to mitigate the most significant risks facing the company.

The Emergence of Cyber Insurance

As cyber attacks become more common, businesses are turning to cyber insurance as a way to protect themselves against financial loss. This trend is likely to continue as cyber attacks become even more common, making it essential for operational risk managers to understand how cyber insurance works and how to use it to their advantage.

Greater Focus on Data Security

As data security becomes an ever-increasing concern for businesses, operational risk managers will need to focus on ensuring that data is protected from both internal and external threats.

This requires operational risk managers to be familiar with the latest data security technologies and to be able to identify potential vulnerabilities in the company’s systems. They also need to be able to develop policies and procedures that ensure data is kept safe.

How to Become an Operational Risk Manager

An operational risk manager career path can be rewarding and challenging. It’s important to start by learning about the different types of risks that businesses face, as well as how to measure and manage them. You should also gain experience in a variety of industries so that you have a better understanding of the unique challenges each business faces.

Once you have the necessary skills and experience, you can move into an operational risk management role at a company. This is a great opportunity to put your knowledge and skills into practice and make a real difference in the way a business operates.

Advancement Prospects

Operational risk managers typically advance in their careers by taking on more responsibility within their organization. As they gain experience and knowledge, they may be promoted to positions with more authority, such as head of risk management. In some cases, operational risk managers may also advance by starting their own risk management consulting firm.

Operational Risk Manager Job Description Example

At [CompanyX], we are committed to protecting and grow our business by identifying, assessing, and managing operational risks. We are looking for an experienced Operational Risk Manager to join our team. The ideal candidate will have a strong understanding of risk management principles and practices, as well as experience developing and implementing risk management programs. He/she will be responsible for identifying, assessing, and managing operational risks across all business units and functions. The Operational Risk Manager will work closely with business unit managers and other stakeholders to ensure that risks are properly identified, assessed, and managed.

Duties & Responsibilities

• Understand and document the organization’s risk appetite, risk tolerance, and risk management philosophy
• Develop, implement, and maintain an operational risk management framework that is aligned with the organization’s business strategy
• Conduct periodic risk assessments to identify, quantify, and prioritize risks across the organization
• Monitor and report on the effectiveness of controls in mitigating identified risks
• Partner with business units to develop and implement action plans to address risks and control deficiencies
• Keep abreast of new and emerging risks, and their potential impact on the organization
• Educate and train employees on operational risk management principles and practices
• Serve as a subject matter expert on operational risk management for the organization
• Maintain up-to-date knowledge of regulatory requirements related to operational risk management
• Participate in audits and examinations conducted by regulators and other external parties
• Prepare reports for senior management and the board of directors on the status of operational risk management within the organization
• Perform any other duties as assigned by senior management

Required Skills and Qualifications

• Bachelor’s degree in business, finance, accounting, economics, or related field
• 5+ years experience in risk management or related role
• Proven track record of identifying and managing operational risks
• Strong understanding of banking regulations and compliance requirements
• Excellent analytical and problem-solving skills
• Highly detail oriented with excellent organizational skills

Preferred Skills and Qualifications

• Master’s degree in business, finance, accounting, economics, or related field
• 7+ years experience in risk management or related role
• CFA, FRM, or other professional risk management designation
• Experience working in a global bank or financial institution
• Advanced Excel skills