In recent years, big banks have faced a lot of pressure to properly calculate and lower their risk, which not only includes evaluating the risk their borrowers pose to the bank, but also the bank’s risk to the public in the event of another economic downturn. “From evaluating credit risks when lending to organizations to complying with Federal Reserve stress testing, risk management roles are increasingly in-demand,” says Paul Herman, a Senior Managing Director within The Execu|Search Group’s Financial Services division.
Among the roles that have seen the most growth in risk management, professionals who specialize in credit risk, regulatory risk, and CCAR (Comprehensive Capital Analysis and Review) stress testing may find great opportunities at large banks. “Especially for professionals who have a technical or quantitative background, these skills are highly sought as banks look to calculate risk and test their stability under pressure,” explains Paul. “There is a lot on the line for banks regarding CCAR stress testing, so getting the best mathematical minds on the case is critical to their success.”
The CCAR exercise can have significant impacts on a bank if the stress testing goes poorly. In addition to receiving fines and federal restrictions on their activities, the test results are made public—meaning that public confidence can change quickly and affect the stock prices as well.
In addition to having advanced skills in mathematics or programming, Paul notes that having experience at other banks is key to landing a more lucrative role. “You can see how much is on the line when evaluating risk, which is why banks are looking for professionals who have the experience to hit the ground running,” notes Paul. “If you’ve held a regulatory or stress testing role at another bank, your skills are in high demand.”
While the technical skills are critical to landing these risk management roles, emphasizing your soft skills can make you an even more competitive candidate. “In a risk management position, you’re often calculating the risk and advising other teams within the bank on how they can adjust their practices to minimize that risk,” explains Paul. “As a result, your communication skills will be critical to your success.” This not only includes your ability to distill and present your findings, but also your ability to clearly state the impact of those findings and recommend a path forward. Your ability to showcase those skills during the hiring process can help you stand out amongst the competition.
For risk management professionals who are interested in pursuing these roles, there are a number of opportunities both in-house or at third party firms. “Because independent review is a critical component of accurately assessing risk, the positions available aren’t just limited to in-house roles at a bank,” says Paul. “This gives professionals in the field more freedom to find the right role for them when they’re not just limited to working within the big banks.”