Operational Risk Manager

Operational Risk Manager

Operational risk usually presents itself to banks, and other organisations, in the form of financial losses. These may be caused by deliberate fraud, or negligence – dealers exceeding their authority and establishing unauthorised positions, for example – or simply by error. In either case, operational risk involves the breakdown of internal controls within an organisation. Other forms of operational risk are presented by information systems – or, specifically, their failure – fire, flood, and other natural disasters.

The responsibility of an Operational Risk Manager, therefore, is effectively to embed a culture of risk management within an organisation. This typically involves the development, and monitoring of risk policies, risk methodology and tools, in line with best practice, company or group policies, and, of course, legal requirements. The role, inevitably, involves advising senior management on the identification of operational risks, and elevating decisions to a higher level, when appropriate. Furthermore, an Operational Risk Manager may be required to train and motivate staff – including, for example, front and back office, and IT, staff – in the use of risk management techniques, as well as liaising with compliance and audit professionals.

Many banks, and other financial institutions, use sophisticated spreadsheet and modelling techniques to assess risk in trading positions, so you may find yourself comparing, and reviewing, different methods of modelling – perhaps in close association with traders themselves – in relation to possible profit and loss scenarios.

Skills & Qualifications

Prospective Operational Risk Managers should be educated to degree level – a numerical discipline is an advantage – or higher, and possess a professional qualification, such as a Diploma in Operational Risk Management, or be an ALARM-registered Risk Practitioner for work in the public sector. Such qualifications are intended to provide a sound understanding of the principles behind operational risk management, as well as developing the professional skills required by an Operational Risk Manager.

Previous operational risk experience, or one or two years experience in an operations environment is preferred, along with strong analytical, negotiation and management skills. A good understanding of financial trading products – foreign exchange, derivatives, etc. – may also be required, as may familiarity with Sarbanes-Oxley (SOX) legislation, and its implications for operational risk management. In addition, winning commitment to the implementation, and optimisation, of risk management policies is an integral part of the job, so an Operational Risk Manager must be comfortable in negotiating with members of staff at both senior and board level.

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