How to Become a Risk Analyst

Risk analysts assess the financial risk to companies relating to specific actions and situations. The role is highly analytical, working with data, researching previous losses and processes, reporting findings to stakeholders, and making recommendations.

In this article, you can learn more about what it takes to become a risk analyst—including the skills, education, and experience you might need—and gain a deeper understanding of the role itself and the salary and job outlook you can expect.

What does a risk analyst do?

As a risk analyst, you may find employment in various businesses, organizations, or financial institutions, often working for companies going through a policy change or new course of action. In each of these industries, a risk analyst would analyze data to assess the risk of losses based on strategies and operations, investments, and even natural disasters. With the data available from past events, industry trends, economic conditions, and regulation changes, risk analysts can predict outcomes and consequences to develop company forecasts and make recommendations to mitigate results.

Read more: How to Manage Project Risk: A 5-Step Guide

Risk analyst duties and responsibilities

The duties and responsibilities of a risk analyst can vary according to the type of risk analyst you are and your specialty. However, no matter what your specialty is, your base of duties are as follows:

• Working to reduce the risk in business and financial decisions

• Analyzing markets, financial data, industry trends, and potential threats

• Identifying processes and strategies that contribute to risk

• Building forecasts and predictions based on analyzing data

• Reporting on findings and making recommendations 

• Presenting findings to the executive team and stakeholders 

• Preparing strategies to mitigate risk

• Utilizing data analytics tools and risk information management software (RIMS) 

Types of risk analyst

Four main categories of risk analysts exist, all with a slightly different focus on the types of risk they are investigating. The following offers a closer look at each type of risk analyst:

• Credit risk analysts: If you are a credit risk analyst, you are likely employed by a bank, insurance company, credit card lender, mortgage company, or rating agency. It’s your job to assess the risk of lending money to people who don’t pay their loans or for products and services.

• Operational risk analysts: As an operational risk analyst, you assess the operations and processes within a company to understand risk, produce strategies to mitigate risk, and improve procedures that may cause financial loss. For example, you would be responsible for preparing for operational risks, such as a faulty product or a fraudulent employee.

• Marketing risk analysts: In your role as a marketing risk analyst, you would have specialized industry knowledge that you use to review and advise on investments and company share positions within the stock market. Marketing risk analysts often work within the investment or finance industries, as they deal with risk involving the stock market and company investments.

• Regulatory risk analysts: As a regulatory risk analyst, it’s your responsibility to look at changes in regulations and new legislation affecting the stock market and company investment.

Risk analyst salary and job outlook data

According to Lightcast™, financial risk specialists earn an average of $122,249.33 yearly [1]. Additionally, the US Bureau of Labor Statistics (BLS) reports the median salary for a financial analyst—a similar role to a risk analyst—as $96,220, with an above-average job outlook [2]. BLS projects financial analyst jobs to grow by 8 percent between 2022 and 2032, amounting to approximately 376,100 job opportunities per year [2].

How to start your career as a risk analyst 

A risk analyst position requires a good education, experience, and skills in analytics, finance, and business. Take a look at the five steps below to help you start your career as a risk analyst.

Step 1: Finish your degree

Typically, a risk analyst needs a bachelor’s degree with a relevant major in business, accounting, finance, information technology, statistics, or math. Although you could succeed as a risk analyst with an associate degree, according to Zippia, 71 percent of risk analysts have a bachelor’s degree [3]. In this case, gaining your bachelor’s could give you an advantage and the needed extra knowledge to thrive in the industry. Your education level can also play a role in how much you will earn. For example, risk analysts with a master's degree earn nearly $10,000 annually more on average than those with a bachelor's [3].

Step 2: Get some experience

In a role with such a large responsibility over the stability of a company, risk analysts need a good amount of experience before entering the industry. A great starting point is to get an internship as part of your degree program, or you can apply for an entry-level role, such as an analyst in another field or a position in customer service for a financial firm. 

Step 3: Earn a certification

Earning a certification is another excellent strategy to develop your skill set and provide demonstrable proof to employers. Some employers prefer you to have the Certified Financial Analyst (CFA) certification, and even if an employer doesn’t request it, it can help you advance in your risk analyst career, giving you knowledge for more senior or management roles.

To apply for CFA, you need a minimum of four years of experience in a relevant field and have to pass a three-part exam.

Read more: What Is a Financial Analyst? (+ How to Become One)

Step 4: Get a license

The Financial Industry Regulatory Authority (FINRA) governs the financial industry and stipulates that you need a license to sell financial products if you work in the security industry. If this applies to you, your employer must sponsor you.

Step 5: Study for a master’s degree

To advance in the field of risk analysis, some progress their studies to get their master’s degree. According to Zippia, 16 percent of risk analysts earn a master’s degree to boost their resume and knowledge [3]. This is especially important if you want to advance your career to senior positions like a fund manager or portfolio manager.

Essential risk analyst skills

Working as a risk analyst requires a range of both technical and workplace skills, as you need to analyze complex data and communicate with your team, delivering reports and recommendations. Examples of essential risk analyst skills include:

Career path

With four different types of risk analysts and opportunities to move into management positions or more specialized areas, you can find plenty of options for career progression. Below, you’ll find possible roles to consider with their average annual salaries:

• Credit risk analyst: $83,906

• Regulatory risk analyst: $102,877

• Operational risk analyst: $82,717

• Market risk analyst: $93,369

• Financial analyst: $75,869

• Senior financial analyst: $103,614

• Senior risk analyst: $111,040

• Lead risk analyst: $93,697 

• Portfolio manager: $128,309

• Fund manager: $118,942

*All annual base salary data is sourced from Glassdoor as of March 2024 and does not include additional pay, such as commission and benefits.

Getting started with Coursera

Build the foundation you need to start a career as a risk analyst by sharpening your skills and broadening your knowledge. One excellent option is taking online courses like Modeling Risk and Realities offered by the University of Pennsylvania or the Introduction to Risk Management course delivered by the New York Institute of Finance, both of which are available on Coursera.