OVERVIEW
What is a Risk Analyst?
A risk analyst or risk assessor is an expert at predicting the potential consequence of a given action with the data at their disposal. They utilize correlations and patterns in past events and new data to determine the best course of action. Typically, they work on behalf of organizations that are in the process of considering a new course of action, new customer, new policyholder, or new political effort. The risk analyst identifies liabilities and determines the likelihood of a positive outcome.
There are four main types of risk analysts:
- Credit risk analysts study the risks of giving loans to customers that fail to pay for products or services or default on their loans. Most commonly, these professionals work for investment or commercial banks, credit card lenders, and rating agencies. Sometimes, credit risk analysts also work at mortgage firms, insurance companies, and other financial service providers.
- Market risk analysts assess the stock market’s influence on their company’s share prices. Market risk analysts work for financial institutions and investment companies. They can also be found employed in the energy industry.
- Regulatory risk analysts study how changes in local and global regulations and legislation can affect the stock market and their company’s sector.
- Operational risk analysts assist businesses in preparing for risky operational events such as product malfunctions or employee fraud. Operational risk analysts also create contingency plans to manage the impacts of those risks.
In addition to these primary risk analyst fields, data analytics experts can also pursue insurance risk analyst and political risk analyst roles.
RESPONSIBILITIES
What Does a Risk Analyst Do?
Risk analysts help companies and institutions reduce the liabilities associated with business decisions by analyzing market conditions and financial data before providing educated advice. This type of work allows businesses to stay financially safe and profitable.
Risk analysts often work for banks and insurance companies to assess client loan applications and make recommendations based on their analysis. This entails evaluating the client’s credit score and job history, among other factors. Sometimes, they’ll work directly with credit bureaus to get more information about a client or seek missing data. If the loan applicant is a business, rather than a civilian client, the analyst will look at market trends and research the relevant industry. Based on their findings, they’ll suggest that their employer either does business with the client or steers clear due to significant risk.
Risk analysts also work at accounting companies and investment firms, where they monitor investment trends and formulate profitable methods such as hedge funds or asset allocation. In these roles, they’ll analyze investment portfolios, make predictions for potential risks, and make recommendations on how to proceed based on those findings.
On a day-to-day basis, risk analysts spend their time:
- Analyzing models and data within the scope of a business action.
- Predicting and determining the likely outcome of a business decision.
- Preparing reports on findings and making recommendations.
- Using analytics software and tools to calculate huge sums of data.
- Consulting with stakeholders and informing leadership of findings.
- Evaluating records and plans to determine the cost of actions.
- Anticipating potential losses and proposing appropriate safeguards.
Where Do Risk Analysts Work?
Risk analysts work in business, financial, insurance, and political sectors at public institutions and nonprofits, as well as for private companies, firms, and consulting agencies.
EDUCATION & BEST DEGREES
How Do I Become a Risk Analyst?
If you want to pursue a career as a risk analyst, there are specific education, training, and certification requirements you must fulfill.
Step One: Earn a bachelor’s degree.
Eighty-seven percent of risk analysts hold at least a bachelor’s degree, so in order to get a competitive edge in the job market, it’s important that you add a relevant bachelor’s program to your arsenal. A bachelor’s degree in business, information technology, finance, or accounting will help you get well-paying jobs and move quickly up the ranks.
Step Two: Consider a master's degree in data analytics, accounting, or information technology.
Over 15% of risk analysts hold a master’s degree in a field relevant to their work, such as data analytics or information technology. An advanced degree could help you stand out among competitive applicants. Although it is not required for entry-level roles, it will increase your job opportunities and shorten your track to senior risk analyst positions.
Step Three: Apply for data analytics jobs and gain experience in the workplace.
Gaining on-the-job experience will help you develop the skills you learned in your degree program(s) and introduce you to the invaluable experience of working alongside others in an organization. A great first step to getting experience during or after completing your degree program is an internship. You can find internships at financial firms by talking to your academic adviser and looking at job search platforms like LinkedIn.
Step Four: Successfully apply for additional training, certification, or license accordingly.
On the road to becoming a professional risk analyst, you must earn an appropriate certification for your role. The Global Academy of Finance offers a Certified Risk Analyst program that is broken down into five modules and provides preparatory exercises and group sessions to help you get ready for the exam.
Another well-known certification program is the Chartered Financial Analyst (CFA), for which you can register after spending four years working in a relevant field. You will receive this certification after earning a passing score on three exams.
If you are planning to work in the securities industry, many employers require analysts to hold a license from the Financial Industry Regulatory Authority (FINRA). You’ll need employer sponsorship to get this credential.
Best Degrees for a Risk Analyst
Business
Accounting – B.S. Business Administration
Have a knack for numbers or fine-tuning finances?...
Have a knack for numbers or fine-tuning finances?
- Time: 62% of graduates finish within 24 months
- Tuition: $3,755 per 6-month term
- Courses: 41 courses in this program
Skills for your résumé you will learn in this program include:
- Accounting
- Finance
- Financial Statements
- Communication
- Detail Oriented
- Research
Take your first step toward CPA certification and learn how to use GAAP, ledgers, and journals.
Technology
Data Analytics – B.S.
Lean into data, and walk away with a cutting-edge online degree:...
Lean into data, and walk away with a cutting-edge online degree:
- Time: 62% of graduates finish within 36 months.
- Tuition and fees: $3,835 per 6-month term.
- Courses: 39 total courses in this program.
Certifications in this program at no additional cost include:
- AWS Cloud Practitioner
- CompTIA Data+
- CompTIA Project+
- Udacity Nanodegree—a unique, highly recognized credential designed to prepare you for a career in data science
- MSI Change Management (Optional Certification)
- Certiprof Design Thinking Professional Certificate (Optional Certification)
Skills for your résumé that you will learn in this program:
- Data management
- Data wrangling
- Statistical analysis
- Visualization
- Leadership and management
- Model deployment & storytelling
Business
IT Management – B.S. Business Administration
IT managers are needed in nearly every organization:...
IT managers are needed in nearly every organization:
- Time: 61% of graduates finish within 19 months
- Tuition: $3,755 per 6-month term
- Courses: 40 total courses in this program
Skills for your résumé you will learn in this program include:
- Team Leadership
- Operations Management
- Communication
- Agile Project Management
- Analytical Techniques
- Information Technology
Key competencies of these online courses align with industry needs: management and leadership, networks and security, and information systems management.
Business
Finance – B.S.
This online finance program is career-focused so you will gain relevant...
This online finance program is career-focused so you will gain relevant industry skills.
- Time: 62% of graduates finish similar programs within 24 months
- Tuition: $3,755 per 6-month term
- Courses: 41 courses in this program
Some careers and jobs this business degree will prepare you for:
- Management
- Accounting
- Finance
- Spreadsheets
- Financial Analysis
- Problem Solving
The competency-based model at WGU allows you to move as quickly as you can master the material, and do your coursework on your schedule. Flexibility is key with the B.S. in finance at WGU.
Business
Leadership Certificate – School of Business
Enhance your résumé and take a step in your educational journey with the...
Enhance your résumé and take a step in your educational journey with the help of a leadership certificate from the School of Business.
- Time: 4 months from start to finish.
- Cost: $2,250 for the certificate.
- Courses: 3 courses total in this program.
This program is for emerging leaders, however this program does not require a bachelor’s degree, and provides transferable credit towards a WGU degree program.
Whether you aspire to work for a Fortune 500 organization, a government agency, a non-profit organization, or a fast-paced start-up, this certificate can give you the keys to success in a variety of industries, including:
- Finance and Banking
- Healthcare
- Manufacturing
- IT
- Consulting
- Nonprofit
- Government
Technology
Information Technology Management – M.S.
A degree for experienced IT professionals ready to lead....
A degree for experienced IT professionals ready to lead.
- Time: 60% of graduates finish within 18 months.
- Tuition: $4,040 per 6-month term.
- Courses: 10 total courses in this program.
Included in your program—at no extra cost—is the opportunity to earn the valuable PMI Certified Associate in Project Management (CAPM) certification.
- Technology operations and integration
- Sourcing and planning
- Risks and influence
- Solutions development
- Project management
Maximize the opportunities that your IT career path has afforded you—earn your master's and keep moving up.
Technology
Data Analytics – M.S.
Lead businesses with strong analysis skills:...
Lead businesses with strong analysis skills:
- Time: 61% of graduates finish within 20 months.
- Tuition: $4,520 per 6-month term.
- Courses: 11 total courses in this program.
This program consists of three specialization areas which allow you to gain specific experience and skills that will benefit your future career. You can choose from data science, data engineering, and decision process engineering specializations to enhance your degree.
Skills for your résumé that you will learn in this program:
- Data Modeling
- Big Data
- Business Intelligence
- Data Quality
- SQL
- Python
How Much Does a Risk Analyst Make?
$95,570
Risk analysts earn a mean annual salary of $81,410, with the lowest tier earning $38,130 and the highest earning $104,370. The median hourly rate for risk analysts sits at $39.14.
What Is the Job Outlook for a Risk Analyst?
6%
The U.S. Bureau of Labor Statistics predicts that employment opportunities for risk analysts will grow by 6% between 2020 and 2030. This equates to roughly 41,000 risk analyst job openings, per year, over the course of the decade.
SKILLS
What Skills Do Risk Analyst Need?
As a risk analyst, you will spend a lot of your time analyzing data and crunching numbers. However, you’ll also have to work with different departments of the company that employs you and build relationships with your coworkers. The specific skills needed to become a successful risk analyst include:
- Keen awareness of detail: Risk analysis requires a sharp eye and the patience to find the meaningful stories hiding in the data.
- Analytical ability: Analyzing market trends, client information, and other data is a risk analyst’s main responsibility, so an aptitude for this kind of work is essential.
- Decision-making skills: After analyzing data and formulating opinions, risk analysts must make recommendations that benefit their employer in business dealings, which is why it’s important to be decisive.
- Communication: While analysts spend much of their time working alone with data, another important part of the job is effectively communicating with clients and stakeholders.
- Project management: Staying organized and on track, especially when you’re dealing with heaps of data, is important to your success as a risk analyst.
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