There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don’t know. But there are also unknown unknowns. There are things we don’t know we don’t know.
This was Donald Rumsfeld famously describing how the war in Iraq was faring.
No, no-one had a clue what he was talking about, least of all Donald himself.
There is, however, a certain kind of person for whom knowing unknowns – and being fully aware of the things we don’t know – is part of the job.
Welcome to the wonderful world of risk management, that area of finance where the ability to see and comprehend what others can only guess means the difference between a super-successful career and your jotters from a dead duck company.
Risk management is a broad church and can take in a wide variety or roles: Data Analysts, Compliance Managers and Risk Managers all have their place here, having honed their crafts in the financial services industry.
The knowledge and experience they bring from their respective fields is imperative to weighing up the potential for risk and these skills help for the careful calculation of a company’s future success or failure.
Right from the starting blocks, a career in this industry begins with an appropriate degree in security and risk management, accounting or finance alongside relative industry qualifications and market knowledge.
Although qualifications are not mandatory, degrees in mathematics, science and engineering are looked upon favorably – for some employers such qualifications demonstrate a talent for the calculated dissection of information and risk.
Junior risk management usually begins with focusing on one region or one product – or even a range of products within a region. From here, you can expand your network and build your portfolio, all the while taking each new step up the corporate ladder. In this sense, as a career choice, risk management can be lucrative, but first you must choose which path to take.
Management is generally split into three categories; credit, market or product.
Credit and market risk deal with the financial implications or services and operations and include missions such as stress testing and asset management.
However, it can be argued, product testing calls for even greater critical thinking. Before a product is introduced, the onus is on you alone to leave no stone unturned in the search for implications and outcomes. Like the best comic book superhero, you must stand independently and continually challenge to ensure everything is moving in the right direction.
At the very same time, your role will encompass a massive level of communication and teamwork. This is no longer simply about research skills, report writing and the presentation of information.
Risk management is now an integral part of a company’s inner machinery, more often than not, helping to drive policy and grow businesses; it is involved in key decision making, consequences and compliances. Forward-thinking organisations now recognise the success integrated and intelligent risk management brings. That’s one known we can all agree we do know.
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