How to Get Risk Management Certification

By | August 29, 2023
How to get the risk management certification
You can become certified risk manager by taking any of several certification exams.

Risk management is a professional term as well as a branch in matters relating to finance.

This post provides detailed information and guidelines to help you get certification and become a certified risk manager.

But first:

Who is a Risk Manager?

A risk manager is a business professional who identifies, assesses, and prioritizes risks, and applies resources to economize, monitor, and even control the impact of unforeseen circumstances, as well as maximize opportunities when they present themselves, with the view of making certain that unpredicted circumstances do not affect the goals of the business.

Various risks can present themselves in any business, and may eventually topple the goals of the organization if not checked; uncertainties in the financial market, threats of project failures, accidents, credit risks, legal issues, natural disasters, and even deliberate attacks from rival businesses and competitors.

A number of principles are in practice in risk management, including standards like ISO, and the existence of societies whose methods and goals vary widely according to whether the risk management method bothers on security, project management, industrial processes, finance, public safety, or health.

This is because risk sources are not only located and accessed in technology or infrastructure, but also in humans, affecting the mental state and decision making process.

Educational Requirements and Training for Risk Managers

While most institutions may not require a qualification to offer certificate courses in risk management, a number of industry organizations and institutions are competing to provide standard certifications in this field, and a huge number of people are signing up to be certified.

For instance, the Global Association of Risk Professionals offers the Financial Risk Managers Exam, while the Professional Risk Managers International Association offers certification examinations which awards the Professional Risk Mangers Certificate.

This may require upwards of 500 hours to be put to study, with experienced professionals only requiring a few months to complete the program while newbies may take as much as one year or more to finalize the training.

The success rates of those who take them do not exceed 50 percent of the candidates and may cost as much as $1,250 for a two-part GARP, and $500 for a four- part PRM.

Certain Universities like the Glasgow Caledonia University in the UK, and the Columbia University New York also offer part time, full time, and distant learning degrees in risk management.

The course requires certain high level proficiency in understanding financial markets, the mathematics of risk management, trending and contemporary techniques in risk management, and behavioral ethics.

The Risk and Insurance Management Society and the Society for Actuaries also provide certification courses, but with less focus on financial risks.

Risk Manager Duties and Responsibilities

Analyzing risks in transactions, developing Strategies to check uncertainties with undesirable consequences on business goals, and the expertise required to avoid threats, reduce the negative implication of or even transferring threats to another interest group may be some of the duties of risk managers.

These require that the risk manager develops a prioritization process where-in the risk with the greater damage or impact or even occurrence be dealt with first, followed by the next in descending order of impact on the business objectives of the organization.

In reality, accessing overall risks, and being able to choose between the risks with high probability and lower loss over those with low probability and higher loss may prove to be difficult for the risk manager and can easily be mishandled, and this calls for sufficient knowledge need.

As a risk manager, a few of these methods have been identified to assist in prioritizing risks:

  • Identify threats
  • Access the vulnerability of assets to specific threats
  • Point out the expected or likely reaction of certain assets to certain risks
  • Look out for ways to reduce the risks
  • Develop a strategy to prioritize risks.
    ISO lays emphasis on certain ideological roles to successful management of risks;
  • Create value
  • Play an important part in the organization, such as being a part of the decision making process
  • Always take human factors into account
  • Be dynamic and responsive to changes
  • Be able to improve on a constant basis
  • Be willing to be re-accessed periodically.

Career Opportunities in Risk Management

Companies have begun fearing the consequences of financial crisis, and have begun to take an interest in risk managers even as the complexities in financial transactions increase.

While most organizations may not require a qualification to practice risk management as it is not an entry-level position, Formal training is important to give you much more competitive advantage in the world of finance, and much more conversant with certain financial concepts, and various opportunities may be open as incentives in some companies for anyone bold enough to want to get an added certification.

Banks, insurance organizations, government financial institutions, stock market and private investment houses are a few places risk managers are in high demand.

Expected Salaries for Risk Managers

Although the location, sector and levels of responsibility have a huge impact on earnings, the risk manager makes between $52,278 and $136,000 annually.