Risk Management has taken on a new impetus since the 2007 financial crisis. The global financial collapse proved that the old risk management and credit rating systems were faulty. They were based on assumptions about event probabilities that were inaccurate.
Rather than crying over spilled milk, banks and credit rating agencies quickly began to make changes to their risk models. Regulators across the world demanded that the probability of long-tailed events be taken into account in a more realistic way.
This new world of risk management is not like the old. It is fast paced with decisions having to be made in real time. Gone are the days when you would make a month-end analysis of your portfolio and send it up the chain of command. Now, there is real time tracking of each risk metric.
To succeed in this new risk environment, you need skills that match what the banks and other institutions are demanding. This is a list of courses and certifications that will help you do just that.
Why take this course?
- This is a practical course meaning you spend less time on theory and more time with case studies and building skills that you need to hit the ground running. The course is taught by Wall Street professionals so you can be sure that the focus is more on on-the-job skills and less on the academic minutia.
- All the major financial asset classes and risks are covered. Risk reporting, tools and risk management is also covered well. All of that makes this a good starting point for most risk professionals.
(If you are focused solely on credit risk, then this article lists the best credit risk courses.)
- A good portion is dedicated to stress testing and regulations. As someone with a fair bit of credit risk experience, I can say that this is indeed something that you a lot of your time on as a risk professional.
- Time to Complete: Around 40 hours
- Available online and on-demand or a in virtual classroom if you prefer that.
- Recommended for analysts and associates in risk management or related fields.
Why take the FRM?
- FRM has really grown in popularity over the last decade. The 2007 crisis boosted the demand for risk managers like nothing before it. The FRM is the gold-standard when it comes to Risk.
- FRM is a very comprehensive certification. Its more quanty than the CFA and will take you several years to earn (especially since there is a minimum work-ex requirement).
- That last point is my biggest issue with certifications like the CFA and FRM. You can’t get certified without the work-ex, and that sort of defeats the purpose of why you would want to be certified in the first place! You need the CV boost the most at the beginning of your career. This is why the FRM is not #1 on my list.
- Time to Complete: Several years (requires relevant work experience).
- NOT available online or on-demand.
- The gold standard for Risk Management certifications.
Why take this?
- A comprehensive course that covers risk in financial markets as well as banking rather well. You will learn about all the risk instruments that are used in the debt, equity and forex markets including derivatives and special instruments like CDOs, CDSs, swaps and all that good stuff.
- The course has pretty much everything you need to know about financial risk management at an intermediate level. The breadth of the topics covered itself is staggering.
- IIM Bangalore is a prestigious institution and the course curriculum is relevant for a global audience. For those desirous of an all-encompassing financial risk education at the beginner to intermediate level, this really is top grade stuff.
- Time to Complete: Around 80-90 hours
- Covers the widest variety of financial risk topics.
- Well suited for analysts and associates.
4. MS in Financial Risk Management
Why take this?
- Several universities offer full-time risk management programs. Many of these focus on business risks and enterprise risks but some are focused on financial risk management as well.
- Most of these courses will come bundled with a lot of other subjects and topics like financial accounting, corporate finance etc. which makes such programs a decent option for finance newbies.
- A formal academic program can restrict you to a specific filed so only go for these if you know for a fact that financial risk management is your jam. Maybe you have some years of risk management experience already under your belt and you already know this is what you want.
- Time to Complete: Several years
- These are not online courses but full-fledged graduate programs