If you like problem-solving and working in a team – and you have an eye for detail and can work under pressure – you may be suited to a career in credit risk. This page covers all you need to know about working in credit and credit risk, including skills and qualifications.
What is credit risk?
When banks lend money there’s always a risk that the borrower will default – the ‘credit risk’.
When that happens, it costs the bank not just the money that’s owed, but the interest due as well as increased costs for debt collection and the price of cashflows being interrupted. In short, when credit goes wrong it's expensive, so banks need people who can assess and manage these risks.
Different banks use different job titles for the role, but those who manage credit risk maybe referred to as a ‘credit controller’, ‘credit analyst’ or ‘credit manager’.
What does a credit risk professional do?
The job is very varied so you can expect each day to be different. You'll assess customer credit applications using different criteria, undertake risk analysis and you may also visit clients.
Where does a credit risk professional work?
As a credit risk professional you might work in a commercial or investment bank, a private equity firm, for an investment management company, or even an insurer or specialist credit rating agency.
You’re most likely to be based with an employer in one of the world’s many financial centres.
Why does credit risk matter?
Risk and compliance have become increasingly important in recent years, but the Covid-19 pandemic has made them a core part of every function in banking.
Many businesses are having to restructure their debt facilities and banks are having to manage more problem loans and client debt. Doing this well isn’t just important for client relationships, but to help businesses stay afloat and to protect jobs and livelihoods.
How do you get into credit risk?
A degree is useful and you may find it helps to gain experience in the banking and finance sector.
Employers also look for strong IT skills as well as good analytical thinking, problem-solving, and strong communications and team working skills.
Is there a qualification for working in credit?
The Level 5 Commercial and Corporate Lending (CCL) will introduce you to mid-market lending and is ideal for those who enjoy the relationship management side of banking. You'll learn to analyse lending positions and structure the best solutions for businesses that operate in the £25-£30 million annual turnover ranges.
For the more risk-oriented side, the Level 6 Financial Risk Management in Banks (FRMB) will teach you to identify, measure and manage a variety of risks. You'll learn to analyse different sources and types of credit risk and how to manage those risks to meet the risk appetite and profitability requirements of a bank and its stakeholders.
By gaining practical skills you will become a more agile leader and you can complete FRMB in just six months.
What’s the best thing about working in credit risk?
Credit risk is an exciting area of banking and finance, and makes a real difference to the success of a financial institution.
Working in credit risk offers the satisfaction of knowing that you’re doing something worthwhile for your employer, your customers and the wider economy.
Find out more about FRMB
More about CCL