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Jobs in finance: what does an operational risk manager do?

28 October, 2021Juno Baker

riskIf you're analytical and problem solving, a bit of a sceptic and enjoy working with people, a career in operational risk could suit you. This page covers all you need to know about working in operational risk, including skills and qualifications.

What is operational risk?

Operational risk is about avoiding errors that arise from the everyday work and activity of a bank.

Andrew Cunningham is a member of the Faculty at our Centre of Governance, Risk and Regulation.

He says, “When discussing operational risk, we consider the potential losses that a bank could suffer because of certain events. These include, for example, the failure of its IT systems or a faulty internal control that enables fraud.  We then measure the losses that arise from such events in terms of their impact on earnings and capital.”

Where does an operational risk manager work?

In the risk management department, which is overseen by the chief risk officer (CRO). But you’ll collaborate with colleagues across the bank to identify and assess risk.

It’s not just about collaboration, however.

As you progress, you may need to push back against colleagues who want to take on too much risk – especially at senior level. This is where your innate healthy scepticism will be invaluable.

Why does operational risk matter?

If risk isn’t managed well, a bank or financial institution could fail. Many individuals and businesses depend on the bank, and therefore, the bank operating smoothly.

Risk management – including assessing, reducing and avoiding risk – is central to every financial institution’s operations. That means introducing and embedding good practice into the bank's systems, processes and culture.

Covid-19, digitisation, the increased risk of fraud, remote working, climate change and the needs of vulnerable customers – these are some of the many reasons why banks are currently looking to better protect operations.

How do you become an operational risk manager?

You may be lucky and find a place on a graduate training programme. Otherwise you should consider assistant roles in the risk management department of a bank.

Is there a qualification for operational risk?

Yes. Level 4 Risk and Regulation in Banking (RRB) is a good start and will help you explore:

  • the fundamentals of risk – risk culture, appetite and tolerance
  • how risk is measured and managed
  • how to analyse and model risk
  • the causes and consequences of financial crises and scandals, and
  • how banks are regulated and the risks they currently face.

Level 6 Financial Risk Management in Banks (FRMB) follows on from RRB and includes operational risk.

As you progress in your career, you may consider Level 6 Managing Operational Risk & Governance (MOPR) if you want to specialise in operational risk.

How long does it take to qualify in risk management?

You have 12 months to complete RRB and sit the exam, but most students study the qualification over six. Registration is open all year round and study is online, so you can work at your own pace.

The average time to complete FRMB and MOPR is also six months.

For FRMB, you’ll need to sit a two-hour exam. For MOPR you’lll need to submit coursework for your assessment.

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