How to become a risk analyst

Risk analysts are financial professionals who evaluate the risks of investment decisions for companies and clients. They determine how to manage these risks and limit financial losses. Becoming a risk analyst requires education and experience and may require certification and licensure. Keep reading to discover how to become a risk analyst.

What does a risk analyst do?

Risk analysts examine economic conditions and financial documents to help clients reduce risks involved in business decisions. They may work for banks, insurance companies, investment firms, or accounting companies. There are four types of risk analysts:

• Credit risk analysts assess an institution's risk in giving loans to customers.
• Market risk analysts determine how the stock market influences their company's share prices.
• Regulatory risk analysts study how changes in regulations and legislation affect the stock market and their company.
• Operational risk analysts identify, assess, and reduce risks that arise from a company's internal business processes.

Risk analysts work across many industries — such as credit intermediation, securities, contracts, and financial investments — and assess the management of companies, agencies, and brokers. Duties vary depending upon the employer, but risk analysts may:

• Collect and review data to identify risk
• Draft reports and other documents
• Develop quality control measures
• Track and report investment trends
• Locate and report asset losses

Steps to become a risk analyst

Becoming a risk analyst involves earning a bachelor's degree, developing skills, and gaining experience. It may also require you to earn certification or licensure and obtain a master's degree.

Follow these steps to become a risk analyst:

Step 1: Earn a bachelor's degree

A bachelor's degree in finance, business analysis, economics, or a related field is required for most entry-level positions in risk analysis. These programs typically include courses in financial accounting, statistics, risk management principles, data analysis, risk modeling, legal and regulatory environments, and more.

Step 2: Gain experience and develop relevant skills

You must have relevant experience before being hired as a risk analyst. Working an internship at a financial institution is a good way to gain experience. Through your experience, you will develop competencies that risk analysts must have, including skills in communication, problem-solving, technology, attention to detail, and financial knowledge.

Step 3: Become certified

Depending upon your industry, employer, and specialization, you may need to earn certification.

Not all entry-level risk analyst positions require certification, but you may benefit from earning the Certified Risk Analyst (CRA) certification from the Global Academy of Finance or the Chartered Financial Analyst (CFA) certification from the CFA Institute.

Certifications can increase your marketability and help you to qualify for more advanced roles.

Step 4: Get a master's degree in finance

A master's degree is not typically required for entry-level positions but may be needed for more advanced roles. Your master's degree may be in business administration, information technology, data analytics, or a finance-related field depending upon the job you seek and the specialization you wish to pursue.

Step 5: Become licensed

Depending on your employer, industry, and specialization, licensing by the Financial Industry Regulatory Authority (FINRA) may be required. Your employer must sponsor you to attain a FINRA license. The most common FINRA licenses for risk analysts are Certified Risk Specialist (CRS), Certified Risk Manager (CRM), and Certified Risk Analyst (CRA).

Get started on edX

Explore edX courses in finance, risk management, strategic management, and business communications to help you further your career in risk analysis.