Is this a step in the right direction? It certainly seems that it is. When a financial institution wants to know if you are properly insured or not, it no longer cares about your manuals, it cares about your risk management plan and implementation. This doesn’t mean you shouldn’t take the time to study for your FSA exam, but you should consider using one of the many online training resources that are available to help you manage your risk management better.
Now, the FSA has been a great partner in educating consumers about risk management in financial institutions, but the reality is that they only go so far. There is a lot that goes into risk management in the banking sector and without having the right resources, you can find yourself being blindsided time again. When I got into the banking industry 10 years ago, my understanding of risk management was limited and I certainly did not have the training that I now have. That experience has taught me that people in the financial institutions need to know more than just the basics, they need to know it all.
Thankfully, thanks to the FSA, there is more than just the basics when it comes to risk management in financial institutions. There is also an abundance of knowledge available on the internet. This information is designed to help everyone from those who are brand new to the experienced professional to understand just how important it is to manage risk effectively and efficiently. In fact, there are entire websites devoted to explaining risk management in financial institutions and what the various terms mean. In fact, if you type the words “risk management in financial institutions” into any search engine, you will get thousands of results where you can learn about risk management in the banking sector in particular.
One of the things that you will find when looking at the various resources for risk management in financial institutions is that there are two main perspectives. One perspective is from those who would like to see the regulation of the industry strengthened, and the other is from those who want the current regulation to be weakened as much as possible. Which way do you think the majority of banking employees fall? Of course the majority want to see the current regulations strengthened because this means more business for them and more money in their pockets.
The exams that financial risk management firms give to people wanting to take their financial management certification tests fall into two main categories. There are written tests that cover a wide variety of topics that deal with everything from interest rate structures, debt and credit contracts, credit default swaps, derivatives, interest-rate discrimination and more. Then there are skills tests that test customer service skills, problem-solving skills, time management skills and more. These skills tests can be very complicated for the lay person, and as such most people who want to take the exam for the sake of becoming a risk manager ends up taking the online exam instead.
If you want to become a risk manager in financial institutions, then the first thing that you need to do is to gain as much hands-on experience working for or with financial institutions as possible. This means that you will need to work for a bank, a credit union, a brokerage firm, a private financial institution, a mortgage company, a corporate lender and/or a government agency that deal with financial issues. In addition, you should also contact various risk management groups that specialize in insurance, investment, securities and more for opportunities to get risk management consulting work.
Once you have a decent amount of experience under your belt, you can then find a good risk management consulting job. The best places to find these jobs are with large banks, investment banks, insurance companies and other financial institutions. You can then apply to one or more of these organizations and work as a risk management advisor.